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1. Case Study
Best Foot Forward
Adidas Retail 'connects' with merchandise
Adidas-Saloman has no shortage of star power on its turns, age or special promotions. If an item is doing welt, we
payroll. Tbe global performance footwear and apparel com- can take it off tbe markdown list. The system provides pre-
pany witb $8.3 billion in U.S. sales is endorsed by numerous cise reporting on the performance of an item and how it
accompLisbed athletes. But for Vince Jackson, tbe compa- reacts when we mark it down."
ny's real stars are the products on tbe store shelves. The previous merchandising solution was a Unix-based
Tbat's why Jackson, who is the director of retail informa- legacy system that was steady and reliable, but limited. "The
tion systems of adidas Retail, Portland, Ore., is a fan of his R12 was our legacy application, and you couldn't get to the
company's recentLy installed suite of merchandising soLu- data easily or interface it easily with SAP," Jackson noted.
tions. Simply put, the chain's investment in merchandising "We needed to speed up processes and information flow."
and related solutions makes it easier to track tbe buge num- The allocation and replenishment components of
ber of permutations of style, color and size throughout the Connected Retailer Mercbandising are based on Microsoft's
retail division's chain of 70 stores in North America. .NET technology, which maximizes the ease of inte^ation,
Sales volume has tripled over the last five years, and the according to Jackson. It does so by providing the ability
cbain is looking to continue its momentum. to operate "one of the thinnest systems out there," be
"Retail is a very volatile industry," Jackson said. "Ap- said. With applications centralized in a tbin-client system,
plications that change as tbe demands of business change as opposed to re-
are important for success." With that concept in mind, the siding on multiple
company formed a partnership with NSB Group and tbe so- terminals in stores,
lutions that are part of its Connected Retailer suite. the system promises
Tbe need for speed and accuracy in a competitive field flexibility.
is wbat pushed adidas Retail toward the solution. In early One key benefit
2003, adidas recognized its po-
tential for strong grovrth at about
the same time tbat its parent
company was moving to an SAP
financials system. "To be where
we needed to be, we had to make
some changes," Jackson noted.
Adidas sought integration with
all of its corporate systems. of the new system will take
It came up with a solution place in tbe future, when tbe
from NSB Group, which might company Looks to build on
bave been expected based on the existing applications. "We'll
retailer's long relationship with be able to do tbat seamless-
the Montreal-based vendor. Adi- ly," he said.
das had been a customer of NSB Still, tbe rolLout of Connect-
A new solution at adidas integrates key functions
since 1999. The Connected Re- such as planning, ordering, pricing and sales margins. ed RetaiLer wasn't pain-free.
tailer Merchandising solution "Like anything new, we had a
was chosen for its ability to use consistent data to inform few more issues than we wouLd have liked to have, and some
decisions. It integrates key functions including (among things had to be tweaked," Jackson said. "But it was notbing
others) planning, ordering, pricing, sales and margins. outside of our expectations."
As with any apparel retailer, size and style preferences The company's efforts have paid off in a merchandise
vary widely based on the store's unique demographics. The analytics tool that is well-Liked by those who use it. "Tbe abiL-
system can identify tbe movers from the non-movers and ity to get data out of tbere is great.
mark down accordingly, Jackson said. That end result was Tbe roLlout of the system was governed by strategic
possible witb the old system, but was not as quick or easy. pLanning, too. Representatives from various departments
"Mercbandise Analytics is a great tool," he said. "We can provided their ideas of Ideal functionatity even before tbey
set up predesignated times for product to be marked down, met for a formaL product-review meeting. When the project
depending on elements such as tbe cycle for tbe season. began rolLing out, t h ^ were invoLved in the early training.
24A Retail Technology Quarterly October 2005

2. and were expected to pass on much of that training to end Analytics, the system promotes the kind of intelligent deci-
users. Adidas has a name for these trainers: "super users." sions required of growing companies.
Extracting the right information isn't something that One thing the chain is continuing to develop is an inte-
every end user is expected to do, Jackson said. But in the grated workforce-management application for use at the
right hands—^those of a super user—the tool delivers. POS, he said. "The end users shouldn't know when they go
Of particular benefit is the exception reporting. "That from one application to the next"
helps us key in on what we need to focus on. It telLs where "The one we're testing is a Microsoft .NET-based POS,"
the problems are," he noted. Jackson said. "We liked what we've seen so far. We're
By gaining a central, accurate view of inventory, several expecting it to be more reliable and flexible during trans-
good things are happening at adidas Retail. By knowing the actions."
on-hand inventory, planners save about 20 hours a week, A new POS and NSB's assortment planning are also on
Jackson said. That visibility also makes inventory counts the horizon, as are efforts to improve the retailer's wireless
less costly. These counts used to require a freeze of inven- network. "We have a long road ahead of us," noted
tory twice a year for two weeks per freeze. That led to lost Jackson.
sales, as the stores at times couldn't hold all the inventory Adidas' plans to acquire and merge with rival Reebok
needed to fill the shelves and last through the freeze period. made headlines this summer. But Jackson isn't getting
The new system provides full visibility into inventory in excited yet about synergies or integration issues with the
transit during these counts, leading to "minimal" interrup- company's former rival. "We don't know a Lot at this point,"
tion of product flow, Jackson said. "We expect to lose fewer he said. "The stockholders aren't voting on the deal until
sales during inventory counts." ne)ct year."
Visibility is one thing, but acting on new information is Until then, the company plans to do as its stable of ath-
another. And Jackson believes that with Merchandise letes does: work hard to improve performance. ]SSi
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Retail Technology Quarterty October 2005 25A