When you have LeBron James on your team, you’re in great shape on and off the court.

The 23-year-old Cleveland Cavaliers superstar was leading the National Basketball Association in scoring through mid-February and, just last season, led his team to the NBA Finals. From a marketing perspective, James occupies that same rare universe as Tiger Woods and Peyton Manning: with multiple lucrative endorsement deals and an adoring fan base, he has been dubbed a “billion dollar athlete.”

All of this is sweet music to the ears of Michael Thom, director of merchandising for Cavaliers Operating Co., the corporate entity that operates the team. One of Thom’s jobs at Quicken Loans Arena, where the Cavaliers play, is to leverage the James mystique and the franchise’s popularity through the sales of licensed team merchandise. And demand for authentic Cavalier jerseys, sweats, caps, bobbleheads and collectibles is at its zenith.

“It’s just great to have someone like LeBron, obviously,” Thom says. “He’s such an upstanding citizen in the NBA, and he’s so young still. For us, it’s extremely exciting. We try to have a team approach around everything, but certainly it is centered around LeBron.”

Increasingly, professional sports franchises appreciate that the sales of retail merchandise have the potential to generate key incremental revenue streams to support their primary receivables — ticket sales, corporate sponsorships and concessions. In the past, many franchises tended to have third-party organizations handle the sales of licensed sports merchandise, but more are bringing the function in house as a separate business unit.

The Cavaliers did so about two years ago, hiring Thom from the Cleveland Indians, where he had been a merchandising and ticket manager. (In addition to merchandising for the basketball team, Cavaliers Operating directs retail sales for the Lake Erie Monsters of the American Hockey League, concerts and special events.)

The Cavaliers operate a 2,500-sq.-ft. flagship store and eight retail kiosks within the arena. The club also sells through CavaliersTeamShop.com.

As part of the transition away from the third-party vendor that had handled retail sales in the past, Thom was insistent that he have “visibility” into merchandising operations. That required a major upgrade in technological firepower, encompassing real-time point-of-sale transactions, inventory management and analytics.

SaaS makes sense
With fewer than 15 people in the company’s IT, accounting and finance departments combined, Thom concluded that a hosted, software-as-a-service (SaaS) operating model would make the most sense.

Under the same model, vendors host and operate web-native software applications for their clients; as a result, the clients do not incur the cost of hardware infrastructure needed to deploy complex business applications. Payment is based on use.

Thom contracted with NSB Group (since acquired by Epicor) for its SaaS-based Connected Retailer suite. Implementation took about four months, Thom says, and now the club is able “to control our product, customer service level and fan experience.”

Clifford Perlman, NSB Group director of business development for SaaS, says small, specialty retailers like the Cavaliers are able to realize the same advantages larger retailers gain with modern IT processes.

“Software-as-a-service brings retailers back to their core competencies,” Perlman says. “When we are in discussions with retailers, they really find that they don’t want to have to continue to invest in IT infrastructure and IT resources. They don’t want to invest their time and effort into maintaining systems and keeping systems current.”

Through the SaaS model, NSB is charged with ensuring that technologies and industry regulations and standards associated with the application are current. Additionally, the SaaS system allows retailers’ merchandising efforts to achieve greater transparency and reduces the confusion that occurs with piecemeal, disparate computing systems.

Retailers “can never really trust the data,” Perlman says. “If they’re looking at one report versus another report, they really don’t know what to believe. They think they know what their margins are, but when they drill down they really don’t understand it.”

Connected Retailer is adding to the team’s ability to analyze sales data and make subsequent business decisions quickly.

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