Guess Got an Unexpected

 
 
By Evan Schuman  |  Posted 2006-06-22 Email Print this article Print
 
 
 
 
 
 
 


Bonus: 60% Server Load Reduction"> The e-commerce search engine space is especially complex today, as Google and Yahoo try to become the default e-commerce engine for many companies. In Guess case, the outsourced Mercado approach also delivered an unexpected bonus: a 60 percent server load reduction, because the database now longer needs to crunch search lookup requests. "We now dont have to go to the database until we have a purchase," Relich said.
As it happened, the IT department isnt seeing much immediate noticeable benefit from that 60 percent load reduction, Relich said, because, "We had enough capacity to begin with. The database was never constrained."
Forresters Mendelsohn dubbed the server load reduction "an extra silver lining to the whole thing, which is not typically factored into the ROI [return on investment] benefits." Relich said he was more pleased with the scripts in the Mercado package, which make the search engine easier to update, as the Web analytics function identifies more common typos or synonyms that customers are typing. "Before, I had to give it to a programmer to write code. Now all I need is a new rule and I can have a merchandising coordinator do it," he said. Guess situation is somewhat different from that of a typical E-Commerce site because it has such a high percentage of multichannel shoppers. CIO Relich said he estimated that "85 percent of my site visitors also shop in the store" and "almost 50 percent of our Web visitors come [into a physical store] once a week or more."
One factor is that Guess the company is experiencing a radical change in its 25-year history, from being an apparel manufacturer that distributed wholesale to being a company that today is primarily a retailer, which sees 75 percent of its revenue coming from 325 Guess stores in North America (100 in Canada and 225 in the United States). The shift for IT is substantial. "We had a data warehouse for wholesale, but weve never had one for retail," Relich said, adding that the company is now using a package from MicroStrategy to create a retail data warehouse. Guess is now looking at its Web site as a true sales tool, but one that might work best by helping store sales instead of performing direct sales. The company recently changed its inventory process to try and become more seamlessly multichannel. Traditionally, Guess.com was given its share of inventory and was treated as just another store. The problem happened when a particular product was especially popular. The sites real-time inventory application would remove the item from all pages the instant it detected no remaining inventory allocated to the Web site. Learn the keys to successful management in Jeff Angus Management by Baseball, "the book Tom Peters wished hed written." Click here. At that moment, the site would stop being a way to investigate all products the company offered. The system removed those items from display even if the warehouse had plenty of that product that was not assigned to any store or for the Web site. "We dont want to offer anything that we cant ship," Relich said, adding that when someone then assigned some of that merchandise back to the Web site, "It would suddenly reappear back on the Web. It became a big customer satisfaction issue. We had the item, but it was just on the other side of the distribution center." Relichs team worked with Manhattan Associates to modify the software so that anything sitting in the general warehouse inventory would be available for e-commerce sales. Guess is also now allowing store customers to order any merchandise that the store doesnt have in stock by using a Web interface from within that store, with all shipping charges waived. This delivers two benefits to Guess: making the customer happier ("The store orders it for you and, three days later, its on your porch," Relich said) and collecting customer e-mail addresses for future CRM (customer relationship management) options. Guess has also recently started moving its stores closer to real-time inventory, courtesy of new DSL connections. Before, it was using store stand-alone POS (point of sale) systems to dial in once a day with updates. The only close-to-real-time option would have been Frame Relay. "It was a very expensive proposition" to get real-time inventory and sales data, Relich said. "Is it worth a quarter of a million dollars a month to know that?" But with DSL becoming available in much of the continent, the situation changed. "As it has become more ubiquitious—and for $74 a month—we now have the bandwidth and the store has access to all kinds of information it never had before," Relich said. Retail Center Editor Evan Schuman can be reached at Evan_Schuman@ziffdavis.com. Check out eWEEK.coms for the latest news, views and analysis on technologys impact on retail.


 
 
 
 
Evan Schuman is the editor of CIOInsight.com's Retail industry center. He has covered retail technology issues since 1988 for Ziff-Davis, CMP Media, IDG, Penton, Lebhar-Friedman, VNU, BusinessWeek, Business 2.0 and United Press International, among others. He can be reached by e-mail at Evan.Schuman@ziffdavisenterprise.com.
 
 
 
 
 
 
 

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