Growing Fashion

Growing Fashion Chain Finds Truth and Beauty in Simple but Effective Point-of-Sale Solution
“The great thing I have found with this system is that if the type of report we need is not there… we can easily create that report.”
— Peter Clark, Co-owner and Director, Groove Accessories
Launching a fashion accessories chain is difficult enough. Peter and Jackie Clark managed to grow a business where the inventory cycle can be as short as three months, with margins that could break lesser shops. The Groove Accessories chain grew to 32 stores in four Australian states within two years. But the company’s buying and selling decisions were getting risky, inspired more by informed guesses than a coherent inventory and intelligence system. There were many retail industry options, but Groove wanted a simple, off-the-shelf, and economical solution that could grow with its business. The company opted for a combination of Microsoft® products, the centerpiece of which is Microsoft Retail Management System Store Operations. Now, Groove has a business intelligence system that has improved its stock control and purchasing, and has allowed its principals to concentrate on what attracts customers.
entrepreneurs Peter and Jackie Clark successfully launched their Groove Accessories retail stores in 2003, targeting the fast-moving niche of affordable fashion accessories, jewellery, handbags, and cosmetics. In 2004, they won the National Retail Association of Australia award as ‘Best New Retail Business/Store’ and Groove grew to 32 stores by 2005.
The Clarks understood that price was an important yet risky way to grow their market. “We do single price points,” says Peter Clark. “No other competitor in the market takes this single price point approach. This was by design.”
In addition, the stock moves in seasonal cycles. In the fashion business, when a product sells out it will never be restocked because the market is fickle and always on the lookout for something new.
“We bought 10,000 scarves this year,” says Jackie Clark. “Next year the scarves will be all different patterns, colors, and styles. For our planning we need to know many we sold last year so we can order the correct number for this year.”
Jackie Clark discovered that one shop in Melbourne sold the largest number of scarves, a strong hint that next season this same store might need more scarves. But this approach was reactive and based on gut feel, the cash registers, and some simple spreadsheet analysis.
“We needed more of a big picture view,” she says.
At the same time, Groove Accessories needed more than a standard point-of-sale system. The company had to be as fast and as smart as the Clarks’ business instincts, because Groove stores make money via fast turnover. But being in the low-cost business generates a constant battle to keep margins profitable. The Clarks needed to know where the money was coming from.
“Basically, Peter and Jackie were running retail stores on a cash register,” says Jason Powell, Managing Director of Technology Advantage. “They had many thousands of different products but no intelligence on what was selling and what wasn’t.”
Groove had no inventory tracking systems. It had grown so quickly, its stock control and purchasing were becoming difficult to manage, often coming down to guesswork and luck rather than good information.
“That’s when we talked about strategy and how and where they wanted their company to grow,” Powell said.
The cash register approach was not the solution. And spreadsheets could only report gross dollar sales. Their best insight was gross income by store or by day.
With stores in four states and plans to open another dozen or so, Groove was crying for a simple but effective makeover.
Solution
With assistance from Technology Advantage, Groove considered a number of vertical applications designed for the fashion retail industry. It opted for Microsoft® Retail Management System Store Operations for each outlet and Microsoft Retail Management System Headquarters for corporate use.
Microsoft Retail Management System is a horizontal point-of-sale solution that works well with a number of vertical markets, including clothing and fashion stores. Its underlying strength is its integration with Microsoft SQL Server™ 2000, Microsoft Windows Server™ 2003, and Microsoft Windows® Small Business Server 2003—all of which are part of Microsoft Windows Server System™ integrated server software. Together, the Microsoft software gave Groove Accessories a solution that would work ‘out of the box’ – just what the company craved. But this system could also expand to offer more business intelligence as the enterprise grew.
Practical considerations were important for Groove to achieve an effective rollout. For example, the company avoided the ubiquitous in-store touch-screen because the oils of cosmetics could smudge the display and cause misreading problems.
Also, many of the casual staff were school students who despised thick instruction booklets. So Powell distilled the 400-page Microsoft Retail Management System Store Operations manual to a punchy six-page ‘essentials’ document that was used to acquaint all staff with the new system.
“We had to make the systems reliable by reducing the array of functions for staff so they didn’t have this tendency to ‘play’ and get themselves into trouble,” Powell says.
The full rollout took about four months. “There was no infrastructure so we had to plan everything,” Powell says. “The planning and testing work took three months, followed by another month of our team visiting stores and rolling out the hardware.”
Each Groove Accessories outlet uses a barcode scanning device, with the keyboard required only to report last-minute price changes. Powell configured the point-of-sale terminals to download systems data on a nightly basis for all new codes and stock. Each store received updates and all sales information was posted to head office.
After a two-month pilot, digesting and tweaking the business rules that Groove’s business required, Powell and his team installed the software in the head office.
“We tested a prototype of the system with the stores, to start basic training and to see if it was working,” he says. “This was important to demonstrate the system and gain familiarity and general acceptance from staff.”
Benefits
With the new system, Groove Accessories can order the correct amount of the right type of stock, which improves stock control and lowers inventory.

Stock Control that is Right for Groove
Microsoft Retail Management System can balance stock between stores to reduce holding and improve profitability.
“If a customer comes in to buy a piece of jewellery, if we don’t have one particular item, they’ll buy another one, says Peter Clark. “It’s not like a spare part for a car, where the item must be the correct one.
“We are in a business where the aim is to sell out the stock. Customers enjoy that because there are new things coming in all the time.”
Simplicity Built In
What stands out most for Peter Clark is the new system’s simplicity. The staff in Groove’s stores find it easy to use and training was a breeze.
“Markdowns and markups and no more muck-ups,” he says. “Its simple beauty is apparent. Having a proven off-the-shelf solution with a consultant available when required also provides strategic comfort.”
Jackie Clark says the same simplicity benefits are available at the head office end of the system. She appreciates the straightforward nature of the reports that can be adapted for Groove management.
“I can take a standard Microsoft Retail Management System report and make it 10 times more useful,” Powell says. “One of the things I’ve tried do with all of my clients is demonstrate the usefulness of a small number of tailored, specific reports, rather than sift through the many reports available each time information is required. This way, managers can find the information they require more quickly and they can get on with the job.”
Support at the Ready
As a business that has no full-time technology officer, Groove appreciates the support from Microsoft and Technology Advantage. Says Peter Clark: “I have my guy [Powell] in Brisbane who supports the system.”
Groove stores have had no issues on the shop front area, Jackie Clark says. If there have been problems at a store level, managers can contact Powell’s company to access help desk assistance.
Additional support in the form of the industry standards included in Microsoft SQL Server 2000 give Groove the freedom to extend the company’s platform in ways that are not possible with other proprietary database platforms.
“This standards-based approach establishes Microsoft on a level of its own as it does not force companies down a proprietary path,” Powell says.
Powerful Customization Tools
Microsoft Retail Management System has been good for Groove’s business – there are few growing cosmetics companies of its ilk in Australia. Having a Microsoft partner to implement and customize its system has been the ‘X factor’ for Groove.
“It is extremely cost effective for us not to have to employ a full-time IT person,” Peter Clark says. “And whenever we need them they are only a phone call away.”
Microsoft Retail Management System comes bundled with powerful software customization tools, adds Powell.
“I use a little bit of report programming to further expand on that,” he says. “The standard reports are very customizable.”
Intelligence that Reveals the Sweet Spot
The immediate and long-term business pay-off for Groove Accessories is its rapid access to business intelligence.
Says Powell: “One of the classic statements Peter made to me within two weeks of installing the new system was: ‘We have two competing cosmetic products and we thought Brand X was outselling Brand Y. In fact it was the other way around!’”
Such insights mean Microsoft Retail Management System helps ensure that Groove makes the right money selling the right products at the right prices.
Moreover, it is business intelligence that keeps pace with the company’s needs.
“The great thing I have found with this system is that if the type of report we need is not there, or is not giving me the right information or I want a little more from it, we can easily create that report,” says Peter Clark.
He says this business intelligence helps the company’s store and area managers analyze different departments with ease, checking the margins and markdowns to a point where they can identify and cultivate the sweet spot for each category.