Function Forward

Charlotte Russe targets hip, trend-savvy and value-conscious teen and twenty-something women. That means offering up-to-the-minute fashions, such as nautically striped T-shirts, polka-dotted jackets, short shorts and crocheted tanks.

“Our business model is based on fast fashion,” says Ed Wong, executive vice president and chief supply chain officer for the San Diego-based apparel retailer whose annual inventory turns are in the double digits. “We move a lot of units at moderate prices.”

About 80 percent of products are sourced domestically, Wong says, which enables the company to respond quickly to shifts in the ever-fickle young adult market.

It’s not only the fashions that move quickly: Charlotte Russe now boasts about 440 stores across the country, and has been adding 50 to 60 stores annually for the past several years.

Until early last year, however, the company’s stores had been making do with a “well-serviced, less-updated” POS system, Wong says. While it got the job done, it lacked the capacity, scalability and transaction speed that the rapidly expanding company required.

In addition, the system was unable to provide the level of customer service that management desired. Sales associates were unable to acquire customers’ names and, therefore, were unable to develop any sort of customer database, for example.

Finally, the system was ill-equipped to handle regulatory requirements like PCI compliance. Moreover, the hardware in Charlotte Russe’s stores was aging.

Store-level training
Wong and his colleagues debated whether it made more sense to upgrade the existing system or install a new one before settling on the latter course of action. This allowed Charlotte Russe to move to a Java-based platform, which better supports connectivity between store locations and corporate headquarters, says Wayne Usie, senior vice president of retail with Scottsdale, Ariz.-based JDA Software Group.

Also key was a system that allows for rapid and intuitive training at the store level, Wong says. Like most retailers, Charlotte Russe hires large numbers of store associates for the critical holiday season, and needs them to hit the sales floor running.

The retailer also was looking for a system that incorporated several other applications, such as workforce scheduling and customer relationship management. For stores to be as profitable as possible, managers need to be able to match employees’ schedules with sales traffic, while store associates need to be able to calculate gift card balances, check inventory at other stores, and handle cross-channel returns. “The challenge in retail today is providing more information at the store level,” Usie says.

Wong also wanted to provide sales associates with the ability to work wirelessly. That way, they could provide “line busting” services and check customers out more quickly when the store was busy. Wireless devices also streamline the process of taking a physical inventory.

“The set of requirements ended up being pretty broad,” Wong admits, and the retailer ultimately decided that solutions from JDA best fit its needs.

For starters, its user-interface was intuitive. “A salesperson could spend 20 minutes on the floor and be fairly adept at processing transactions,” Wong says. That minimized the need for employee training. The software also is easy on the IT department, as it can be configured without extensive programming changes.

Moreover, the JDA suite includes a range of applications needed to run each store, such as workforce scheduling and time and attendance solutions. If Charlotte Russe had implemented several stand-alone systems, it would have had to coordinate integration between and among the different vendors, which can be time-consuming and frustrating.

JDA has acquired and integrated a number of solution sets in POS and merchandise planning over the last decade, Usie says. It also has picked up product allocation solutions, which are used with fashion-oriented products to identify which sizes, styles and colors are most likely to sell well in different stores based on historical sales trends.

In April 2006, Wong and his team began implementing the JDA POS and inventory applications, such as those for receiving and transferring merchandise; by the 2006 holiday season, they had 14 stores up and running. “We went through the Christmas season great,” he says.

After that holiday rush was over, the team installed the applications in the rest of the chain, with the final store live by July. At the same time, it implemented new POS hardware in the stores. To make that happen, a crew would travel to a different location just about every night.

Wong’s team “did a phenomenal job of implementing the technology,” Usie says. “They implemented a merchandise system in six months, which is unheard of.”

Customer database
The new solutions have provided Charlotte Russe with numerous benefits. The number of keystrokes needed to process a transaction has declined by 45 percent, and the time required to balance and close out the register at the end of the day has been slashed from more than an hour to about 35 minutes.

Another feature, the customer database, went live in July 2007.

As of late February, Charlotte Russe was in the midst of deploying JDA’s workforce management solution, which combines sales traffic history with an employee scheduling application. While it’s too early to calculate benefits, Wong says that management expects savings in three areas: better matching of sales employees to traffic patterns, more efficient scheduling and improved deployment of employees when they’re needed for operational tasks.

Later this year, Charlotte Russe will roll out JDA’s payroll solution to its two distribution centers, and then follow that with implementation at the stores. It also will deploy a markdown-optimization application.

“By going after a broader solution provider such as JDA, it’s more efficient,” Wong says. “They have skin in the game to make sure all components operate well.”