Case Study: Famous Footwear

Get New Life Out Of Old IT Investments

Famous Footwear retrofitted 2,000 registers across a network of more than 800 stores with software that gives it a real-time look at sales data.

Like many retail chains its size, billion-dollar discount shoe retailer Famous Footwear (Madison, WI) approached the new millennium running DOS registers on an AS/400 platform, and as a matter of fact, it still does. But the company made some important modifications to its POS (point-of-sale) software prior to the turn of the century.

The integration of C-Co Technologies (Newtown, CT) Genasys software platform has allowed it to maximize the efficiency of store operations without making a complete systems overhaul. “We were looking for a retail connection that would give us real-time access to our stores’ POS, sales audit, and credit settlement activities,” says Bonnie Tiedt, manager of systems support and enhancements at Famous Footwear.

On a larger scale, the upgrade is part of the company’s plan to tighten operations in an effort to achieve a $75 million reduction in base inventory by 2004. Tiedt adds that her company was in search of the most economical approach it could find and one that would work with its AS/400 server. With these criteria in place, Famous Footwear narrowed the search to three solution providers, choosing C-Co Technologies in July of 1998.

C-Co’s solution at Famous Footwear relies on a frame relay, which gives the retailer a continuous, real-time connection to its stores without the expense of a dedicated leased line. What it means for Famous Footwear is access to up-to-the-minute data that, among other things, allows three-second electronic payment authorization and helps the company make merchandising decisions throughout the day.

Take Advantage Of That Data!

There are many retail and POS software products that offer real-time information access, but many retailers who have real-time access to data don’t use it to their advantage. At Famous Footwear, reads are taken of sales data at noon and 5:00 PM. “Our merchandising department can make decisions quickly based on the information we can now look up,” says Tiedt. “When we are having a sale, our merchandising department will watch our margins closely. If the margins are too low, they may go in and adjust pricing on some of the non-advertised items in the store.”

Tiedt cites instances where the decision was made to change a price at noon, and by 3:00 PM the same day, all 800 stores had made the change. “The new system makes it easy for us to go in and make these kinds of changes to the software.”

Validate Transactions As They Happen

Prior to having a real-time connection, by the time the home office identified problems with incorrectly handled transactions it was too late to do anything about them. This contributed significantly to shrinkage. Now, says Tiedt, the home office can verify that a shoe being sold or returned has a valid SKU (stock keeping unit), for example.

“We’re able to act more quickly from a loss prevention standpoint,” she says. “By validating transactions, the software flags suspicious entries as they happen, prompting the sales associate to enter more information on the transaction.” In most cases, Tiedt says the chain’s customer service policy mandates the return take place anyway, but the data is valuable in determining when individual stores or associates are chronically conducting flagged transactions.

The real-time connection has also proven beneficial in the implementation of Famous Footwear gift cards, another joint effort with C-Co. When a customer chooses to pay with a gift card, the data (such as remaining balance) on the card is sent to the server at the home office and verified there at the time of the sale.

Trickle-Down Training

Tiedt calls the massive training effort required the most challenging part of the installation. “This was a huge change for the stores. The software interface was completely different. And of course, there’s a high employee turnover rate in retail, which compounds the challenge,” she says.

Famous Footwear completed the rollout of the new software to the 800 stores it was operating at the time in about five months. In order to train all levels of store personnel efficiently on the new system, the company took a trickle-down approach.

“C-Co trained key staff at the Famous Footwear home office,” says Tiedt. “For a period of ten weeks, we had key managers from each district coming to the home office, where we trained them.” Each district was then set up with a “field training store,” where the key district managers returned to conduct training for store managers and sales associates in that district. Sales associates were trained on back office PCs in each store, which were also upgraded to facilitate the training at the time of the C-Co rollout. The training effort continues as the chain adds new stores, which totaled more than 80 last year.

Attaining Goals With Upgrades

Famous Footwear plans to partner with C-Co on an upgrade to a browser-based POS interface within a few years, and will be upgrading much of its hardware at that time, as well. Tiedt says that among other things, the company would like to train new employees at the actual POS as opposed to in the back office.

In keeping with its inventory reduction plans, Famous Footwear reported a $30 million reduction in inventory at last year’s end. Beyond this figure, Tiedt admits her company hasn’t taken a close look at the specific return on its C-Co investment.

“We don’t have any numbers that talk specifically to this software upgrade,” she says. “However, we do know that we increased the speed of our network and improved our efficiency.” To that end, cutting electronic payment transaction times from 35 seconds to three and giving the merchandising department access to sales figures in real time has gone a long way.