13 Buho Street supports international expansion with new technology
Spanish street wear retailer, 13 Buho St, which currently has 29 stores mainly in the UK, Spain, France and Russia, says it plans to open around 30 more stores in the next two years, including an additional 10 franchise outlets in the UK. To support such a rapid international expansion, new retail software has been rolled out through VCSTIMELESS.
"When we became more international, with new stores opening abroad and the production of our clothing all coming from Bangladesh, we needed technology more compatible with our global infrastructure, without forcing any big drastic changes," said Samantha Herelle, franchise manager at 13 Buho St.
"The biggest problem was communication between our stores and knowing at any time how much each was selling," she added. "There was no reporting and very little planning done before."
The previous technology was unable to cope with multiple brands and the wide range of activities in different countries. There were also a lot of problems with the reliability of transferring data. Sales were not updated regularly enough, so replenishment was based on inaccurate stock and sales data.
"We needed one central solution for every country, and every store," said Herelle. "We wanted a system able to help with pricing, promotions and customer service in various different languages."
The company chose the integrated retail head-office solution, Colombus Enterprise Suite, from European software vendor VCSTIMELESS.
Implementation began during the summer of 2005 and was completed in one phase by September, after rolling-out new point-of-sale solutions to all 29 stores during July and August. Training of 40 users at head office and for all 29 stores took place at the same time. The production centre in Bangladesh was also connected directly to the system in order to manage deliveries, labelling and invoicing.
The main challenge was the transfer of large amounts of historical sales data from the old system to the new one (SQL Server to Progress), as well as the importance of a seamless and rapid changeover, with minimal 'down-time'.
Owner and Director of 13 Buho St, Dositeo Cela, said that the integration of the retailer's entire infrastructure into the same retail system has had a very positive impact on communication, and, as a direct result, a knock-on effect for the retail business.
"Good up-to-the-minute information on sales and regular updates has meant that store replenishment is now much quicker, and more accurate."
From the head office, the ?12 million company now has visibility of the entire network and so has greater control over making sure that the right clothes are destined for the right store. This reduces the amount of surplus stock left at the end of the season, not to mention the quantity of returns from its company-owned stores back to head office - which leads to markdowns and the erosion of profit margins.
"We work very closely with both our franchise and corporate stores to actively anticipate and adapt to customers' wishes, and they send us detailed reports of what they believe is best suited to their stores and, most importantly, they tell us what the customer wants," said Cela.
The Price is Right
"Pricing is always a challenge; prices just keep falling and we are forced to ask ourselves 'where do we put our prices?' We can't make them too high, we can't make them too low, so where do we place our price points in relation to the competition? It's a tough call."
But with the new technology, there's now less deliberation. According to Carmen Martinez, project manager at VCSTIMELESS, improved information sharing and effectively 'everyone working from the same hymn sheet' leaves less room for human error.
"The staff at 13 Buho St have welcomed a retail solution that allows them to get on with the business of serving customers, and not having to worry so much about whether the right amount of stock has been ordered," said Martinez.
Analysis of sales data and using the VCSTIMELESS Optimum business intelligence reporting module has allowed 13 Buho St to improve the product assortments destined for different stores in different countries, as well as plan ahead more effectively for seasonal fluctuations and making sure that there's fewer stock-outs.
Other benefits include:
- labelling can now be done by producers in Bangladesh (so considerable time savings)
- 25% reduction in reserve stock
- 15% increase in turnover
- in-store staff productivity up by 50%
- 30% increase in supply chain productivity
- reduced out of stocks
- 25% reduction in stocks
- 12% increase in service levels (deliveries to store, customer orders)
- greater visibility
- faster inventories
- franchises can do own invoicing
- technology adapted to future growth strategies
- Internationalisation: multi-lingual, multi-currency etc.
- compatible with accounting system (Sage)
- developed for concessions, franchises etc.
- improved CRM strategy: by tracking clients, recording purchases, offering specialised promotions, targeted direct marketing campaigns.
- compatibility with other stock control systems, allowing 13 Buho St to work with a wider range of retail investors
13 Buho St's sister company, Enigma Trading, produces a lot of merchandise for Mango, as well as supplying numerous multiple retailers, including Eroski. The wholesale business is considering linking to the VCSTIMELESS system in future.