Sport Chalet Inc., a Southern California retailer of specialty sports equipment, has expanded rapidly over the past decade, including branching into Northern California as well as into the states of Arizona and Nevada. To support overall growth and stave off newer competition from bigger sporting goods chains and niche athletic retailers, Sport Chalet a few years ago realized it needed more efficient ways to select and manage inventory.
At the time, Sport Chalet was using numerous "best of breed" software packages to do everything from gauging customer demand to controlling inventory. A major drawback was that was it was difficult to find one version of the truth because different people were using different formulas to calculate results. It was also very time intensive to run reports, and there was no fast accurate way to customize product by store.
"We were using our replenishment system to move fashion product to the stores," says Jason Gautereaux, vice president of merchandise planning and inventory management.
"We set a base inventory level and filled in to sales. As we continued to grow in size, geography and assortments, we realized our current allocation process would not suffice, so we decided to look for an integrated merchandise planning and allocation solution. Both would give us greater capabilities to plan our business and allocate to our stores in a more precise manner."
In particular, the retailer found that as it was entering new markets, customer behavior wasn't going to be the same and variations in climates would drive different assortment decisions. A new solution for merchandise planning and allocation
In 2005, Sport Chalet decided to turn to SAS merchandise planning and allocation suites. Specifically, Sport Chalet utilizes Merchandise Planning, In-season Management, Performance Analysis and Allocation - all of which are part of an integrated data base. The retailer also uses a SAS forecasting tool for merchandise plans and in-season management.
Like many retailers, Sport Chalet in the past tended to send each store the same number of goods in most merchandise categories, and restocked with little view toward per-store sales trends. With SAS, the company looks at which stores sell what types of product in the greatest quantities and allocates to that demand.
As a result, customers not only are more likely to find what they want in the right size or color, the presentations are more appealing. Stores receive a larger number of their best selling products and can create a more visually dynamic display.
"Our goal was to have a positive impact on our stores, and ultimately the customer," says Gautereaux. "In addition to that we became much more efficient in how we handled the product. Our allocation methods allowed us to touch product once vs. the multiple times when we were using replenishment to handle allocations."
Internally, the move to SAS has freed up buyers to focus on finding the best and hottest products for customers, the firm reports. This is particularly crucial for Sport Chalet, as some of their specialty sports gear has long lead times for placing orders. SAS also allowed buyers to make strategic and product lifecycle plans. A key to Sport Chalet's success vs. that of incoming national sporting goods chains will be its ability to better meet the needs of local sports enthusiasts.
From a promotions standpoint, the company says it has been able to make better decisions about what items to put on sale or clearance and when to do it. Gautereaux says it is now also much easier to spot trends in sales, especially as they relate to regional differences.
"With the allocation tool, we have really been able to identify what we consider fashion-forward merchandise: The one-time buys that 'in/get out," notes Gautereaux.
"Now, instead of stocking those items in our distribution center and shipping them to whomever sells them, based on a one-to-one, we've been able to cross-dock that merchandise and flow it through our distribution center a lot more effectively."
The tool has greatly improved handling capabilities at the warehouse, and reduced redundancy, he says.
"On the store side, we've seen greater presentations of our product. It brought to light space and volume inequities in our stores and allowed us to make better merchandising decisions, thus increasing sell-through and maximizing sales per square foot," says Gautereaux.
Streamlining processes, improving visibility
Another critical need for Sport Chalet was software that worked with legacy systems to achieve one version of the truth. Historically, data was available on canned reports or downloaded to spreadsheets.
With SAS, the data is loaded and available on demand to deliver quality plans. This standardization still leaves room for the "artsy" side of the merchandiser's position, too, because he or she can perform different types of analyses and approach problems differently based on individual business experience.
"Today we have greater visibility into our business both from a historical and planning perspective," says Gautereaux. "Our allocation process has increased our speed to market and support to our stores by pushing merchandise based on sales trends and opportunities."
The streamlined processes also have provided Sport Chalet's managers with better and quicker access to sell-through data. For example, a report detailing transactions across all of Sport Chalet's stores typically took a day or more to process. With SAS, Gautereaux built the query and had the answer in eight minutes. Another benefit has been an improved working partnership with suppliers.
"Our planning department has been instrumental in using the system to collaborate with vendors and provide our merchants with data to assist in purchase plans," says Gautereaux. "While we have been happy with the internal improvements we have seen, it's still all about the customer and we feel the SAS solutions have assisted us in enhancing the customer shopping experience."
In looking for a solution, Gautereaux says a lot of technology vendors were able to deliver different aspects of merchandise planning, assortment planning, performance analysis and allocation, but not many could deliver an integrated database such as SAS'. Gautereaux says the implementation process was pretty straightforward.
"We took an approach of being 'vanilla' out of the box," says Gautereaux. "We set a timeline and used that as our guide. By taking a basic approach we were able to achieve our timeline and begin using the technology in six months. From there we have been able to evolve our processes. Along with the implementation we created two new departments, merchandise planning and allocation, to support the technology."
Looking ahead, Gautereaux says that integrating forecasting into the allocation process "should have some great upside." Sport Chalet also just completed installing a new ERP system, which includes interface development to downstream systems. Overall, the retailer plans to continue to evaluate its processes and strategically identify systems that will help it grow and be more efficient. The focus will be on optimization.
"We have a lot of great systems and processes that help us provide value to our stores and customers," says Gautereaux. "We need to work with our technology partners to find ways to automate and optimize to create greater efficiencies."
Thomas J. Ryan is an Apparel contributing author based in New York.
fast facts
Founded: 1959 Headquarters: Los Angeles, CA Publicly Traded Ticker: SPCHA and SPCHB Products: Traditional sporting goods merchandise, including
footwear, apparel and other general athletic products; core specialty
merchandise, including for snowboarding, mountaineering and SCUBA Services: Backpacking, canyoneering and kayaking instruction, custom
golf club fitting and repair, snowboard and ski rental and repair,
SCUBA training and certification, SCUBA boat charters, team sales,
racquet stringing and bicycle tune-up and repair for the sports
enthusiast Number of Stores: 51 locations in California, Nevada, Arizona and Utah Web site: www.sportchalet.com
