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Sometimes small changes can have big — and unexpected— consequences. Retailer Peter Harris Clothes discoveredthis when it set out to buy a few new cash registers and

ended up with an all-new IT infrastructure. The company, headquartered in Latham,

N.Y., was an early off-price retailer, startingout with a single store in 1970. (The off-pricemodel capitalizes on imperfections in theregular-price model; Peter Harris and sim-ilar retailers buy up brand closeouts aswell as the excess stock that manufactur-ers produce to ensure they can meet theirorders even if some items are rejected.) Today,it operates 81 stores in the Northeast andMidwest, all selling famous label apparel,footwear and home décor brands at deeplydiscounted prices.

The nine original Peter Harris stores,which are larger and sell more high-endmerchandise, operate in mid-tier markets such as Albany andSyracuse; the 72 Label Shopper stores are located in smaller mar-kets and offer a more limited range of merchandise. The com-pany is expanding its geographic footprint, preparing to open fiveor more new Label Shopper stores this fall in Virginia andNorth Carolina.

In addition to pioneering the off-price retail model, Peter Har-ris was an early adopter of ERP, installing a system as early as 1979.Rather than invest in customizing its ERP software — whichwas the general approach at that time — the company decidedto save money by purchasing and using a system off the shelf. Theresults were so good that the software developer began market-ing its solution that way for the first time.

In fact, Peter Harris continued to use that system for 35years, with a few upgrades in the 1990s. It might still be usingthe legacy system today if compatible cash registers were still avail-

able. But by 2013, the cashregisters were nowhereto be found — not evenin the secondary market.“We went back to thecompany and asked themto integrate new registers

into the system,” explains Peter Elitzer, president and CEO of PeterHarris. “They said they would do it, but they wanted to chargemore than it would cost us to buy a whole new system. So it wastime to make a move.”

Choosing a new systemWith help from a consultant, Peter Harris conducted a year-

long search for a new ERP system. In addition to supporting up-to-date equipment, the new system had to meet a few other essentialrequirements. First, as Peter Harris has no IT department and noin-store technical expertise, it needed a system that was easy touse and didn’t require constant attention to operate with a highdegree of integrity. A second, related requirement was simplicity.Because of its business model, Peter Harris doesn’t need (or wantto pay for) many features that most apparel retailers demand, suchas tracking by size and color.

Off-price retailer PeterHarris operates 81 storesin the Northeast andMidwest, all sellingfamous label apparel,footwear and home décorbrands at deeplydiscounted prices.

Peter Harris and the100 Words for ClothesInstalling a new comprehensive retail solutionwas like learning to speak a new language,reports the CEO of off-price retailer Peter HarrisClothes. Suddenly, managers can ask — andanswer — questions they couldn’t even thinkabout before.

retailintelligence CASE STUDY

Apparel: How have POS systems evolved to help apparel firmskeep pace with today’s rapid changes in retail, whereomnichannel is the name of the game, and so much power is inthe hands of the consumer?

HENNEKE: Today’s systems open doors to newways of conducting business and increaseopportunities for customer satisfaction. Ship fromstore, in-store pick-up of web orders and returnanywhere have become the new standard. Thus,beyond tracking inventory, new POS solutionsprovide enterprise-wide inventory visibility andcomplete customer information in real time.

Modern systems should also be able to handle advanced promotions suchas BOGOs, offer integrated gift cards and give flexible price managementcapabilities across stores. Additionally, business intelligence andclienteling tools have become more accessible and comprehensive,providing retailers with insight into their customers’ buying histories andpurchasing habits. This way, store associates are better equipped to meetshoppers’ sophisticated needs. What does this all mean? Adoptingmodern omnichannel platforms helps retailers streamline mission-criticalprocesses and deliver personalized customer service, thus givingshoppers the experience they expect on their own terms.

Apparel: The store is undergoing a revolution. What do youidentify as the key areas of the brick-and-mortar transformationand what are the biggest business challenges retailers are tryingto overcome?

CHEMTOV: Stores are definitely in a state ofunrest right now. The rise of the connectedshopper and the convergence of the physical andvirtual worlds have called for a new definition of thestore. With the proliferation of consumer technologyand the convenience of buying online, retailersmust provide a good reason for shoppers to comeinto their brick-and-mortar locations. And make no

mistake about it — once they walk in, the experience must go far beyondconducting a simple transaction. In this new definition, the store playsmany roles — it’s a place of social interaction, entertainment andinspiration; it’s also a fulfillment center and a returns location for weborders. Obviously, these new mandates require a complete new set ofintegrated tools. Your technology must enable you to better understandthe shopper’s behavior in an omnichannel path to purchase, thus leadingto a personalized shopping experience, as well exchanging offers andservices in return for their loyalty. To achieve this, however, retailers mustovercome challenges in the following areas: lack of consistency of storeoperations, limited integration of in-store processes and absence ofsoftware capabilities for omnichannel execution. Without the appropriatesoftware, retailers cannot keep up. So, yes, the store is dramaticallychanging and those who embrace this transformation will thrive.4

VENDOR VIEWPOINTMoris Chemtov, President Jesta I.S. and Rob Henneke, Executive Vice President, RPEThe search yielded three finalists, and the com-

pany paid site visits to reference clients of these ven-dors. Wowed by their visit to a client of Jesta IS, whichwas using that company’s Vision Suite, they ulti-mately selected three Jesta IS modules: Vision Mer-chandising, Vision Store and Vision Financials.Vision Merchandising is a retail management sys-tem that provides visibility into and control of inven-tory. Vision Store is point-of-sale software thatstreamlines in-store operations and delivers real-time information on trends. And Vision Financialsincludes accounts payable, accounts receivable andgeneral ledger software. All the modules use a com-mon database.

From a technical standpoint, migration to the newsystem was smooth and trouble-free, with six storestransitioning ahead of the others and the rest migrat-ing shortly afterward, in October 2014. The new hard-ware was purchased separately from the softwaresolution, which caused Elitzer some anxiety, “but inthe end,” he says, “it became irrelevant because Jestanever said, ‘It’s not our problem.’”

Getting the staff on board was a little more chal-lenging. “I can’t say we flipped the switch and every-body was happy,” says Elitzer, who admits thattransitioning to a new system after 30-plus yearswas “intimidating.” There wasn’t enough redun-dancy for staffers to learn the new system thoroughlybefore it went live, so people had to learn quicklyafter the fact.

Though all the basic functions, including the point-of-sale system, were straightforward, some finer points— such as correcting data entry errors in the ware-house or accounting for overseas purchase deposits— were difficult to handle. Elitzer says that Jesta againrose to the occasion, providing support to get theprocesses running smoothly.

More than new cash registersOnce Vision Suite was fully implemented, Peter

Harris found that the system had far more to offerthan new cash registers. The old system — developedat a time when storage capacity was expensive —didn’t retain transaction details and only saved sum-mary reports as PDFs. “If you wanted to know whatthe business was two years ago in a certain store, youcouldn’t do it,” Elitzer explains. Vision Suite, by con-trast, retains all the raw data and can easily export itto Excel format for analysis.

The new system is also far more resilient. Previ-ously, if a store was unable to transmit data to thecentral database for a day, the database could never

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VENDOR VIEWPOINT cont.

Apparel: As companies, both big and small, move beyondoutdated legacy systems, they enter a world of endlesspossibilities. What are the top business priorities being pursued,and how will they continue to shift the world of retail in thecoming years?CHEMTOV: As a result of the paradigm shift in consumer behavior,legacy systems are now incapable of allowing companies to providecustomer satisfaction and future business growth. To meet ever-increasing consumer expectations, companies are rethinking the waytheir organizations work. They seek new and improved methods byinvesting in more functionally rich, configurable and integrated platforms.In fact, a recent EKN study found that 60 percent of retailers plan toreplace their POS system by 2017. That’s a staggering number, whichdemonstrates retailers’ haste to move from legacy systems to modernomnichannel platforms. At the store level, retailers are translating thesebusiness needs into technology investments in areas such as unifiedorder management, security and compliance, as well as loyalty andpromotions. Other priorities include improved inventory management, in-store mobility for employees and store productivity. Overall, we’re seeinga consolidation of in-store technologies into one platform, eliminating theinefficiencies and inaccuracies of disjointed applications. As the industrymoves from a supply-driven mode to a demand-driven one, storesequipped with tools built with the customer in mind will definitely have acompetitive advantage.

Apparel: With in-store mobile POS, online checkout, call centerand more, POS is no longer just a traditional cash register —although sometimes it can be. What would you say are the topthree elements to consider when evaluating new POS software?HENNEKE: The first thing to do when evaluating new POS software isto define your specific business needs and requirements, so that you’resure to find a good fit, for today and the future. My recommendation is tocreate a checklist of the functionalities currently available on the marketand the benefits they bring. Determining your approach to customerinteractions is extremely important when choosing a store system. Forinstance, centralized customer management, loyalty programs andclienteling can transform the customer shopping experience and are,therefore, paramount. Secondly, set a roadmap. Consider the software,the platforms the applications would run on, the implementation costs, aswell as the support charges from each vendor. What may seem relevanttoday must also accommodate future requirements and sustain growth.Look for scalability and expansion capabilities. Store systems may requirea number of interfaces, so be sure to outline them in the roadmap toavoid disruptive and costly upgrades. Finally, assess the tender andpayment authorization methodology. Any POS system change shouldinclude a full review of the payment process to meet PCI compliance andEMV requirements, while protecting the brand and preventing anypotential data breach. Consider new options such as upgrading to anend-to-end encryption (E2EE) process, tokenization and multi-currencyrequirements. In brief, always have a plan.

Vendor Viewpoint is a regular Apparel advertorial feature.

be fixed. Now, it can. (“That’s a liberating thing,”Elitzer comments.) Similarly, if a report wasn’t runon time, there was no way to go back and re-createit. Now, reports can be run for any historical period.

Flexibility is also greatly improved. Assessing thetotal merchandise in a store used to require physi-cally counting items because the inventory reportswere too detailed to be useful for that purpose.The new system, by contrast, can produce reportsthat “slice and dice” information any way managerswant to see it. Counting hangers has become a thingof the past. The accounting system is more flexible,too. Previously, when multiple stores shared a bankaccount or a single store had multiple bank accounts,check reconciliation had to be done manually — butno more.

But the benefits aren’t limited to performing thesame functions in a more precise and streamlinedmanner. It also enables a type of business intelligencethat was never possible before. Elitzer says, “As weget more and more comfortable with it, we start wak-ing up to the things we can get.” He compares learn-ing the system to learning a new language that hasmany nuanced terms, such as the Eskimos’ famoushundred words for snow.

“[The system] can tell you when you bought toomuch of this or that. Are there enough flyaway cardi-gans? You have to decide how to aggregate, and whichquestions are relevant. … It helps you identify trends,and what’s moving well. Then you can ask why — isit because it was priced cheap, or because it’s highlydesirable? The capability to answer these questions isthere, but we’ve only just begun to make use of it.”n

Masha Zager is a New-York based Apparel contributingwriter specializing in business and retail technology.

retailintelligence

The new ERP system for its Peter Harris and LabelShopper stores (pictured here) enables a more nuancedbusiness intelligence than was possible previously.

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