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Lucky Brand Leverages Operations Data To Improve Inventory Visibility Across 200+ Stores Featured

  • Written by  Glenn Taylor
Lucky Brand Leverages Operations Data To Improve Inventory Visibility Across 200+ Stores

With a network of 200+ stores that fulfills almost half of the denim company’s online orders, Lucky Brand sought new technology to improve its cross-channel delivery operations, starting with inventory visibility. Mike Relich, COO of Lucky Brand, described the previous backend retail operations at the company as “opaque,” prior to working with operations data platform SoundCommerce.

Now, Lucky Brand has greater transparency into processes such as:

  • Length of time taken for a specific product to be picked, delivered to the UPS hub and delivered to the customer’s doorstep;
  • Potential profitability of transactions and individual shoppers, and customer lifetime value (CLV); and
  • Specific failures or roadblocks in the delivery process, and where they can be improved.

{loadposiion GIAA}“We didn’t have a whole lot of visibility into the number of orders that we captured,” Relich said in an interview with Retail TouchPoints. “We didn’t know for sure whether all those orders made it into our OMS [order management system]. There are two components related to the OMS — ship-from-store and ship-from-distribution center — and approximately 45% of our e-Commerce shipments are actually ship-from-store. It’s very easy to manage one DC, but to manage 200 stores shipping e-Commerce is a little bit more of a challenge.”

Relich noted that visibility problems within the order delivery process persisted, starting with Lucky Brand’s interactions with its delivery carriers. Despite having labels printed, both the retailer and consumers were sometimes in the dark about precisely where products were during the delivery process and when they would arrive at the shopper’s home — sometimes even having different expectations of when a product would ship.

“The problem the stores had — and even the DC for that matter — was that the store might go into UPS CampusShip, create a label, and then employees would assume that the item is actually shipped out,” Relich said. “But they wouldn’t know how long it will take for the UPS driver to pick up the item and take it to a UPS hub and scan it in. From that scan-in, how long does it take to get to the customer’s doorstep? We never had the visibility.”

Cross-Platform Shopper Data Bolsters Delivery Visibility

Gaining more access to granular customer data has been critical to Lucky Brand’s ability to improve product visibility across the supply chain. The SoundCommerce software pulls operations data from across merchandising, supply, fulfillment, delivery and customer service platforms such as Amazon, Shopify, Magento, Salesforce Commerce Cloud, StitchLabs, Oracle NetSuite and Microsoft Dynamics 365.

SoundCommerce, which launched in April 2018, is largely focused on helping retailers remove the “middleman” within the operations process, by giving its clients the customer data necessary to answer tough questions such as “Which markets, channels, and customers should we prioritize?” and “Are we meeting our delivery promise?”

While the technology helped build the solution provider’s partnership with Lucky Brand, it was Relich’s working relationship with SoundCommerce CEO and Co-Founder Eric Best that got it off the ground. Relich served as CIO at Westfield, and was one of the first clients of another company Best founded, Mercent (since acquired by CommerceHub).

When Relich reconnected with Best at a recent NRF Big Show, Best pointed out that “you rely on all these cloud-based technologies, but you have no way of getting a single view across all of them.” Realizing that operational excellence and limited resources had been an issue at Lucky Brand, Relich elected to be a beta tester for SoundCommerce in May 2019.

Lucky Brand Improves Customer Profitability Assessments To Measure Lifetime Value

Beyond bolstering backend visibility, Lucky Brand can more accurately diagnose how to improve customer lifetime value (CLV) among individual shoppers. Within the SoundCommerce solution, the retailer can factor in transactional data such as shipping costs, cost of goods sold (COGS) or even marketing costs, and then pull data from across its other platforms to assess profitability per transaction and profitability of individual customers.

“Let’s take Black Friday for example, or one of those days where demand exceeds our capacity to pick items on the same day,” Relich said. “We pick those orders first-come, first-serve — but maybe we should be picking these and prioritizing by who our most valuable customers are so that those get out first. Secondly, let’s take the brand-new customers and make sure they got the greatest experience.”

CLV can decline, sometimes precipitously, when shoppers are unhappy with a purchase or their overall shopping experience. With the streamlined operations platform in place, Lucky Brand can focus on how specific events may change CLV in the long run. Relich and his team can use this data to pass more investment ideas through to the retailer’s finance department.

“Sometimes we have to cancel orders because the inventory’s not correct,” Relich said. “Basically, we really didn’t know what an operational failure really meant to that customer. Now that we’re tracking CLV, we can specifically see any CLV changes because of the lapse of the service. If we know that a shopper’s CLV is $250 and it dropped to $200 after that failure, we know that this instance cost us $50 in goodwill from that customer.”

Learning more about these data points has given Lucky Brand a fresh point of view on how to understand the value of its consumers, while also enabling the retailer to better communicate with them at the right time. For example, the company sends emails if an order is delayed, or if it will be shipped from a different store than initially anticipated.

“You want to ship as fast as possible, but customers are a lot more accommodating as long as you communicate with them,” Relich said. “They’re much more forgiving than if they don’t hear anything from you. Then they will think you don’t have your act together.”

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