The Skate Industry5 Stores
The Skate Industry has shown a remarkable resilience during recent tough economic times in Retail. The industry is largely driven by young, passionate consumers who see skating as a lifestyle rather than a hobby. There has been a steady growth in the popularity of skating which has seen it move from the fringes of society to be a far more main stream activity, with a universal appeal to all ages.
Over 1.3 million children in Australia have reported to be engaged in a skating activity of some kind, making this a lucrative and competitive market for Retailers. Consumers within the industry are heavily influenced by trends within the sport, a factor reinforced by manufacturers and suppliers who use sponsorships and endorsements to build a loyal and engaged audience. Retailers then tap into this brand culture to develop their own loyal customer base, by providing products and service at a local store level.
Products within the industry tend to be graphically based, with logos and brands often influencing purchasing decisions. International trends are watched closely by local retailers in an effort to stay at the forefront of the ‘next big thing’ to happen in the industry. The product range is not limited to equipment, as clothing, footwear and accessories all add to the appeal for key brands. Having stock available on store shelves is critical for Retailers, as many of the products on offer are easily substituted or available online from local or overseas suppliers.
The online channel is a popular purchase point for skate consumers, as the products are bright, colourful and graphically based, making them a perfect fit for this visual merchandise medium. These figures are reflected in the online retailing age group figures, with 61% of Australians under 24 years old having purchased products online in the last 12 months.
About Skater HQ
Skater HQ has been one of Australia’s favourite sources of Skateboards, Rollerblades, Roller Skates, Scooters and other fun toys since 1991. Bill Vertucci opened the doors of Manly Blades, the first in-line skate specialty store in New South Wales, situated on the Manly beach front. Bill recognised the growing appeal of other skate products and soon rebranded as Skater HQ, offering a complete range of skate industry related products and services. The business now operates from two physical locations as well as operating a high traffic webstore, which contributes over 50% of the revenue of the business.
The family run business is committed to offering the very best service on their carefully selected range of products. During many years of operation, the business has built a reputation for staying ahead of trends in the skate industry and providing customers with the latest products from local and overseas suppliers.
Bill and his team have invested heavily in local skaters, offering sponsorships and product support to a new generation of up-and-coming skating competitors. Reaching out and connecting with consumers at this grass roots level has earned Skater HQ a reputation as a trusted and credible brand in the industry, something which has helped to grow their loyal customer base.
Challenges faced by Skater HQ
How To Take Advantage Of The Online Revolution
Skater HQ recognised that the future success of their business relied on their ability to take advantage of the growing popularity of consumers purchasing products online. To capture this market, the business created a basic webstore, which saw both physical and online sales increase at a rapid rate. Success in the skate industry is based on having the latest products available for sale at all times in either a physical or online environment. “Our products are very graphically based, so we needed to have all of our stock online,” said Bill.
Spiralling Cost Of Managing A Busy Webstore
The rapid growth of the Skater HQ physical stores and Webstore created an enormous increase in the resources required to keep both sides of the business operating efficiently. As Skater HQ was not using a Point of Sale system in the early days of their business, the Webstore was not connected in any way to the inventory within the physical stores. This lead to a myriad of inventory management issues and placed an extra burden on store staff to manage incoming web-based orders.
The additional revenue created by selling online was being eroded by simply adding the cost of managing the extra sales activity. Having a Webstore which was not linked to a Point of Sale system meant paperwork needed to be produced manually, such as invoices and shipping documentation. Bill was therefore seeking a more automated solution which could be easily integrated with a physical Point of Sale system, in an effort to control the ever increasing costs associated with his existing store setup.
Maintaining and updating the stock items on the Skater HQ Webstore was also taking an ever increasing amount of time from Bill and his staff. The existing Webstore was difficult to update, did not display images in their truest form and was not providing Bill’s customers with the best possible user experience. Bill felt this was having a negative impact on his ability to successfully grow the business and take advantage of this sales channel.
Controlling Inventory Across Multiple Channels
As the business expanded, Bill was also having trouble determining exactly which stock to order at any given time. The stock in each store is subject to seasonal change and is greatly influenced by changes in consumer trends. In addition, Bill was carrying a large amount of spare parts and equipment components to service his loyal customer base. Without an effective Point of Sale system, Bill was often guessing what he needed to order and these decisions were not always as accurate as he would have hoped.
Tracking stock across two stores and a Webstore was proving difficult and was leading to a negative customer experience. Stock would often be oversold as a result of a Webstore order being placed by a customer for stock which was not actually available in the physical store. As stock levels were not available in real-time, sales staff were having to manually check if a particular item was available, not knowing if it had already been allocated to an online order, or an order at the second store. Bill’s aim was to have the right stock on his shelves at all times to support his reputation as a reliable source of the latest Skate products and this reputation was at risk using his existing stock management process.
Why Skater HQ chose Retail Express
Integrated Webstore and POS
Skater HQ went live with Retail Express point of sale software and a fully integrated Webstore in March 2008. Bill identified that he needed a Point of Sale system which could function seamlessly with his Webstore, particularly as the Webstore was delivering an ever increasing amount of sales revenue.
With the Retail Express Point of Sale platform integrated with a state of the art Magento Webstore, Bill now has his entire inventory online, integrated in real-time with his in-store inventory. When sales are made online, the orders are centralised into the main sales order reporting system, meaning there is no need to re-enter customer orders into the Point of Sale system. When stock is sold in-store, the online stock counts down in real-time, and vice versa. When new stock is received into store, the stock appears online instantly and automatically. “We now have an incredibly rich Webstore that truly represents what is on the shelf in our physical stores,” said Bill. The automated updating of stock levels in the online store also prevents any over-selling of products.
Significantly Reduced Webstore Operating Costs
Using Retail Express, Bill has reduced the time needed to manage his dynamic and busy Webstore. “My operating costs on my Webstore have actually decreased using Retail Express,” said Bill. The products and pricing on the Webstore can be controlled dynamically by in-house staff, eliminating the need to hire a Webmaster. “I’m thrilled with the fact that the costs of running my Webstore are much more sensible,” said Bill. Skater HQ has a constantly evolving range of inventory, meaning that there is a heavy reliance on Retail Express to reduce the time it takes to upload and manage the range of stock available in the Webstore.
Controlling Inventory And Maximising Financial Returns
As Bill’s store expanded, he took advantage of the detailed reporting available through the Retail Express back-office. “The reporting functions have been terrific. It has allowed us to order much more accurately and be more tuned in to seasonal changes,” said Bill. The inventory management functions are intuitive and are based on intelligent algorithms designed to help Retailers have the optimum level of stock on the shelf at any given time. Retail Express can help Retailers optimise their stock by as much as 8%, delivering a significantly higher financial return on the investment in their inventory. Bill’s approach to serving the needs of his loyal customers is simple. According to Bill, “It just allows us to make sure we have the right gear on the shelf.”
Retail Express allows Skater HQ to make the most of every sales opportunity. Sales staff can quickly and easily check if a product is available in either of the two Skater HQ stores. This means that a sale is not lost to a local or overseas competitor and an important relationship is maintained between Skater HQ and their customer. Sales staff can also easily see if an out of stock product will be available soon and can provide an accurate estimated time of arrival to the customer while they are still at the sales counter. This product can then be sold to the customer and delivered to their home when it arrives in store.
The future for Skater HQ
Skater HQ shows no signs of slowing down, even after 21 years of successful operation. In fact, the opposite is probably true with online sales now representing over 50% of sales revenue for the business. Bill’s focus is to maintain Skater HQ’s position as one of Australia’s favourite sources of Skateboards, Rollerblades, Roller Skates, Scooters and other fun toys in his family run business, while continuing to be a leader in the Skate industry.