Browns Shoes Inc. is in a middle of a multiyear overhaul of its inventory management system.
The retailer’s online sales have grown by a double-digit percentage year over year for the past few years, and Browns Shoes is hoping its inventory management investments help it continue that growth.
The vast majority of the retailer’s sales occur at its 70 stores in Canada. Nearly 10% of Browns Shoes sales stem from its e-commerce site, and a single-digit percentage of sales stem from “save the sale” orders made in stores by associates, such as a pair of shoes in a different color or size that the story doesn’t have in stock, says Richard Sejean, the retailer’s director of e-commerce.
However, the retailer is increasingly focused on connecting its online and offline operations by improving its inventory accuracy and ensuring it has a unified view of the customer. After several months of vetting vendors for its initiatives, Browns Shoes selected order management system OrderDynamics Corp. in June 2017 and launched with its system in October 2017.
The new OrderDynamics system allows Browns Shoes to ship products faster, determine the most profitable way to ship an online order to a shopper, while also providing more flexibility for which products it displays online and how its warehouse fulfills orders.
The holiday season generates more than 33% of Browns Shoes’ online revenue and is a significant priority for the retailer, Sejean says.
Because the inventory system launched so close to the holiday season, Browns Shoes did not have all of the platform’s capabilities live. Still, with this new system, the time it took on average from when a shopper hit buy to when the distribution center shipped the order decreased by 13% during the holiday season, Sejean says. This percentage has only decreased since the fourth quarter of 2017, decreasing more than 20%. Now, click-to ship is completed in about 24 hours, he says.
How the new order management system works
Browns Shoes has one distribution center in Montreal, Québec. If the distribution center has the item an online shopper ordered in stock, the retailer prefers the warehouse fulfill the order, instead of having a store fulfill orders, Sejean says. Having all orders flow through the distribution center helps Browns Shoes to keep track of its inventory, while also ensuring the shoes are in perfect condition and have consistent shipping costs. Plus, the distribution center fulfills orders faster, and the retailer doesn’t have to burden its store staff to fulfill an order, he says.
But if the distribution center doesn’t have the item in stock, OrderDynamics evaluates multiple factors to determine which store should fulfill the order, such as the proximity to the shopper, the price of the product and the sales velocity of the store—Browns Shoes does not want to take a product off of a shelf from a store that would otherwise sell it.
Browns Shoes also considers how wide Canada is and the margin of its products, from $300 boots to $30 discounted sandals. For example, if a shopper in Vancouver wants to purchase a pair of inexpensive shoes and none of the nearby stores can fulfill the order, the distribution center thousands of miles away on the other side of Canada would have to fulfill it, which would not be profitable for the retailer, Sejean says. With the new system, Browns Shoes won’t display shoes below a certain price as available for shoppers if they are too far away from the distribution center, Sejean says without revealing that price.
In terms of how the warehouse fulfills orders, the previous order management system didn’t allow Browns Shoes to tweak the rules of assigning products to certain orders, Sejean says. Building multiple item orders became“a real math problem” with its previous technology, he says.
For example, if a shopper ordered 10 pairs of shoes, the retailer waited for all the items to come in before shipping the order out. However, if another shopper ordered one pair of shoes that was also in that order, because her order was “complete” those shoes would then get shipped out.
“A customer who ordered 10 items would be penalized,” Sejean says. “We were always chasing around for those multiple item orders.”
All of these inventory management factors helps Browns Shoes ship products faster to its customers and amounts to a 50% reduction in the number of items canceled, Sejean says. While this is great for customer service, it’s also especially beneficial for the holiday season when shoppers need to have delivery guaranteed by Dec. 25. Because the program was new last year, the retailer did not adjust any of its shipping dates. This year, however, the retailer will likely be able to guarantee shipping in time for Christmas closer to Dec. 25 than in years past. The retailer has not yet determined which date, he says.
Plus, with greater insight and flexibility with its inventory, the retailer can select its most popular products to have express shipping, he says.
The holiday season and beyond
In the long term, Sejean wants a set number of stores to serve as fulfillment hubs, while the rest of the orders flow through its distribution center. This will further improve inventory accuracy and improve efficiencies of having to train only certain stores to fulfill orders.
To make this happen, Browns Shoes needs to first launch store-level inventory. These are long-term projects and likely will not be ready in time for the 2018 holiday season, Sejean says.
Before the holiday season, the retailer is looking to gain more visibility into its shoppers and the “lifetime value of them.” For example, Browns Shoes would like to know which online orders end up getting returned to stores. To achieve this, Browns Shoes is looking to tie together its store point-of-sale system, its e-commerce database, its email service provider and its inventory OrderDynamics system.
To help with this process, the retailer has trained its store employees to ask shoppers for their email addresses so they can better tie store and online orders together.