VF Outdoor Inc. is taking a step-by-step approach to upgrading the way it sells online to retailers.
The manufacturer of outdoor apparel and shoes is relaunching its e-commerce technology so its eight Outdoor and Action Sports brands will operate on the same platform, says Julie Dixon, business-to-business e-commerce manager of the VF Outdoor and Action Sports coalition.
Rather than operate eight brands on many e-commerce platforms, a standardized system will make it easier for VF to retrieve customer information and product data, integrate with other business systems and provide retail buyers new merchandising and assortment planning capabilities, Dixon says. VF’s goals for its new B2B e-commerce sites include: increasing customer adoption of the online system, growing revenue and increasing the profitability of each of brand, Dixon says.
The company’s Sports and Outdoor Apparel coalition is composed of The North Face, a supplier of sports apparel; JanSport, a backpack and luggage manufacturer; Vans, a supplier of outdoor shoes; Eagle Creek, a supplier of luggage, backpacks and travel gear; Reef, a supplier of surf shoes and clothing; Timberland, a supplier of outdoor footwear; Smartwool, a supplier of outdoor socks; and Lucy Activewear, a supplier of women’s activewear.
These eight brands operate on different software platforms. Vans, Reef, The North Face and Smartwool currently use e-commerce technology from CenterStone Technologies Inc. Lucy relies on technologies from Elastic Suite Inc., which was recently acquired by PlumRiver Technologies, for online assortment planning and merchandising, and CenterStone for order entry and status updates.
JanSport doesn’t have a B2B e-commerce site, and Eagle Creek runs on a homegrown e-commerce system that only one VF employee knows how to operate. “It’s very well run, but it’s only managed by one person,” Dixon says. “To have only one person who knows how that site works is really scary.”
The number of SKUs available on each VF site ranges from 10,000 to 200,000, depending on brand and season, Dixon says. An average of 30% of VF’s business orders are processed online across its North American business units, Dixon says. This includes transactions processed via electronic data interchange, or EDI, the electronic exchange of purchase orders, invoices and other documents. Dixon declines to provide website sales information.
But all of VF’s websites, except for Eagle Creek’s, are contracted out to third-party providers for I.T. support. Having multiple agencies in charge of running websites for one organization can make retrieving data on product sales and customer information difficult, Dixon says. “I.T. support can get really confusing as a result of this fragmentation, and through no fault of our own personnel,” she says. “They’re not able to provide the support each team needs to keep the site running the best it could. Any time we have an issue it requires a significant amount of research, talking and questions. We get answers like, ‘So-and-so doesn’t do that anymore, ask the old person and get their story.’ It takes a lot of work to get problems resolved.”
None of the e-commerce sites are integrated with the brands’ SAP SE enterprise resource planning, or ERP systems, which they use to manage things like inventory levels, financial records and customer activity. This means that none of the sites can display product information and pricing that is immediately updated as VF changes information in its inventory and financial management systems. The lack of up-to-date information reduces the profitability of VF’s brands, Dixon says. “We’re missing sales because products stick around in our warehouse too long, and we end up discounting them,” she says.
Each brand operated on separate ERP systems until May 2014. Having one standard system to organize information on inventory, financial records and customer activity inspired VF to standardize each brands’ e-commerce technology platform.
In May 2014, the company chose e-commerce technology from PlumRiver LLC to unite its brands’ e-commerce systems. VF chose PlumRiver for its ability to personalize online information to individual buyers, merchandising capabilities and ERP integration, Dixon says.
The new B2B sites will allow buyers from retailers the ability to search for products by a select style or season, and view details of what they’ve placed in a shopping cart, such as the percentage of tops versus bottoms. This helps retailers avoid buying either too much or too little in a certain product area. Buyers will also have “the ability to create an assortment of merchandise and use that assortment to create a custom catalog that looks exactly like what is produced from our marketing department,” Dixon says.
Buyers will also be able to choose what kinds of products they want to see displayed online. A buyer located in the United States, for example, may only want to buy products available at VF warehouses in North America, Dixon says. They can choose this attribute when creating their buyer profile, and the website will automatically adjust to only show products available in this region.
The PlumRiver platform also integrates with VF’s ERP system, which will allow updated information on inventory availability, pricing and shipping options to be displayed on each brand’s site. The ERP connection also allows customers to view updated information on their order status and invoices received. “Giving people real-time visibility into a product assures them they can get what they need, when they need it,” Dixon says. “We’ll sell more products at full price and at full sale as a result.”
In-house developers are relaunching the sites on a brand-by-brand basis. Vans is scheduled to go live Aug. 1, and The North Face site sometime in the fourth quarter. All the brands are scheduled to be implemented by the end of 2018. “We’re taking a modular approach to implementation,” Dixon says. “We want to start small, with the crawl-walk-run approach. We can start with a limited number of modules and limit functionality to make sure it works perfectly before we add to it.”
The cost of deploying PlumRiver across VF’s eight outdoor brands is about $1 million, Dixon says. The company plans to make back its investment within anywhere from six months to about two years after deployment, depending on the marketing resources VF devotes to promoting the new sites as well as the economic climate, Dixon says.
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