Scoring with Fans
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Some industries claim to be “immune” to the effects of a bad economy. Sports is one, relying on the die-hard love of the fan to keep the game—and revenues—alive. (See “Customers for Life,” July 2004.) According to David Weiss, Internet marketing manager at Chicago-based memorabilia retailer Wrigleyville Sports, fans have yet to disappoint. “The economy doesn’t always drive our business,” he says. “We focus on teams with a deep fan base.” With the Chicago Cubs in the 2008 baseball playoffs and the Pittsburgh Steelers winning Super Bowl XLIII, Wrigleyville Sports enjoyed a few good months. In fact, December 2008 was its busiest month ever.
Open since 1990, right across the street from Chicago’s Wrigley Field, the retailer has since expanded with another store in downtown Chicago, as well as one in Pittsburgh that sells Pirates and Steelers products. An e-commerce channel opened in 1997—WrigleyvilleSports.com and ThePittsburghFan.com—and has grown to comprise half the business.
But even Wrigleyville has seen changes. While the number of online and offline orders increased 16 percent from December 2007 to 2008, overall revenue increased just 5 percent. “We did discount,” Weiss says. “Everybody discounted this past Christmas. If you didn’t, you were probably not competing well.”
The season could have been a lot worse. (See this month’s cover story, “Selling Out,” for more on retail’s bad year.) And yet Wrigleyville Sports managed to not only increase sales, but cut costs and improve customer service—thanks, in part, to the company’s March 2008 implementation of NetSuite’s multichannel Retail Management Suite, which integrates a robust point-of-sale (POS) system with an e-commerce platform.
Perhaps retail’s biggest challenge is finding the balance between supply and demand. “When orders are coming in fast and furious, we need to have a real-time inventory system,” Weiss says. Previous solutions, he recalls, could only deliver reports several times a day, leading to a delay in knowing whether an item was available.
With real-time visibility, Wrigleyville has been able to focus on a “just-in-time” system that matches inventory levels to consumer demand. Rather than run its Pittsburgh brick-and-mortar shop separately from its e-commerce business, Web orders are now filled in Pittsburgh instead of at Wrigleyville’s Chicago warehouse. Therefore, all Pittsburgh-themed items are monitored and maintained in a single location, allowing the company to reduce its level of inventory for those items by approximately 25 percent at any given time. This reduction does not reflect a slowdown in sales, Weiss says, but rather a more-efficient purchasing engine. Increasing overall inventory turnover, he says, means “we’re not tying up capital to overstock our Chicago warehouse.”
In a price-sensitive environment, Wrigleyville Sports is fully aware of a consumer’s inclination to shop around, especially with just the click of a mouse. The efficiencies gained with the NetSuite solution have enabled the retailer to maintain customer relationships with features such as back-in-stock notifications. Typically, Weiss says, when Wrigleyville’s out-of-stock on an item, so is the competition. The competitive edge, then, comes down to the quality of customer service.
Since implementing the solution, five employees once responsible for manually processing orders have become full-time customer service representatives. “They’re bringing in money instead of having to take care of money already coming in,” says Trey Carlstrom, co-owner of Wrigleyville Sports. In turn, the company has not only padded its contact center and Web-site maintenance teams, but now has the bandwidth to actively engage in live chat sessions.
The benefits after moving onto NetSuite were as clear as night and day, Weiss says. “We have complete confidence that we can handle anything that might come our way.” When the Steelers won the Super Bowl, initial concerns about site uptime proved unfounded as the sites handled thousands of visitors without any performance issues. “Instead of feeling like we’re at our peak capacity for processing orders,” Weiss says, “with NetSuite, we have plenty of room to grow.”
It’s been over a century since the Chicago Cubs won the World Series—they haven’t even made it there since 1945. When the historic dry spell ends, shattering the Curse of Billy the Goat, Wrigleyville Sports will be ready, Carlstrom says. “It’s what we’ve been waiting for our whole lives.”
After implementing NetSuite’s multichannel Retail Management Suite, Wrigleyville Sports:
- increased revenue by 5 percent and the number of orders made by 16 percent, from December 2007 to December 2008;
- shifted five employees from order processing to customer service, while also expanding service channels such as live, online chat; and
- created a single view of its inventory, enabling a 25 percent reduction in inventory kept at any given time.
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01 May 2009
Have retailers, desperate for survival, abandoned their commitment to the customer experience?