Its opening punch in the bruising battle with big-name retailers was the launch of its snazzy George Foreman clothing line. Now plus-size men's apparel chain Casual Male is betting its future on a high-stakes distribution guarantee.
John Johnson joined the DC Velocity team in March 2004. A veteran business journalist, John has over a dozen years of experience covering the supply chain field, including time as chief editor of Warehousing Management. In addition, he has covered the venture capital community and previously was a sports reporter covering professional and collegiate sports in the Boston area. John served as senior editor and chief editor of DC Velocity until April 2008.
Casual Male Big & Tall has been down once before, and the company has vowed not to let it happen again. After filing for bankruptcy protection back in May 2001, the retailer—newly reorganized as Casual Male Retail Group (CMRG)—picked itself up, brushed itself off and came roaring back to defend its corner of the apparel market—plus-sized clothing for men who stand taller than 6'2" and have waistlines of 44 inches or greater.
Last spring, the company signed two-time former heavyweight boxing champ George Foreman, a big and tall guy himself, as pitchman. Since the George Foreman Signature Collection was introduced, the line's linen camp shirts, tuxedo jackets and satin boxing trunks have been flying off the racks.
But just as it was getting back on its feet (CMRG recently announced its first quarterly profit in three years), the company found itself fending off another body blow—this time in the form of encroachment on its niche in the apparel market. With America's population aging and its citizens losing their collective battle with the bulge, CMRG's niche—plus-size clothing—has begun to look like a gold mine. That hasn't gone unnoticed by other clothiers. Heavy hitters like Old Navy, Sears, Lands' End and Eddie Bauer are all reportedly adding more big and tall sizes to their clothing lines. And the battle's shaping up to be the retail equivalent of 12 rounds in the ring with Joe Frazier.
But for CMRG, losing is not an option. It's already planning its next attack—one that will come from an unexpected corner: distribution management. In a bid to strengthen brand loyalty among its core clients, CMRG is rolling out an unprecedented in-stock guarantee. Beginning this month, the retailer is promising customers that they'll find their size in stock in stores. If they don't, the company will arrange to have its distribution center ship it out straight away. To distinguish its program from the usual bland marketing assurances, CMRG has put some teeth into that promise. "If we don't have it on our shelves and we can't deliver within five days," says Dennis Hernreich, CMRG's executive vice president, COO and CFO, "then it's free."
Tall order for the DC
As innocuous as it may seem, that marketing promise carries enormous risk. With pants starting at about $45 per pair and sports coats costing upwards of $200, CMRG stands to lose a lot of money if its supply chain group fails to deliver. And that's not the half of it. Unlike most men's clothing stores, which carry 15 or so sizes, Casual Male Big & Tall carries 49 different pants sizes alone. Throw in shirts, jackets and all the accessories required by a sharp-dressed man and you have the makings of an inventory management nightmare.
What makes the guarantee all the more remarkable is that CMRG doesn't exactly boast a long track record of world-class inventory management. Back in 2002 when retail store operator Designs Inc. bought Casual Male and formed CMRG, Hernreich made the disturbing discovery that Casual Male was running its business not on state-of-the-art retail systems, but on a mainframe computer and legacy information systems. It quickly became obvious that the company would have to dismantle these systems—which lacked the scope and capacity to incorporate distribution best practices—and replace them with up-to-date warehouse management (WMS) and enterprise resource planning (ERP) systems.
Right from the start, CMRG made re-engineering its business processes and updating its technology infrastructure a top priority. It installed a new warehouse management system from Manhattan Associates, which has been up and running since last July. It also invested in JDA Portfolio Replenishment Optimization software by E3, which helps the retailer keep products in stock at the store level. The JDA system, which replaced a homegrown replenishment application, analyzes how trends, seasonality, promotions and projected inventory positions affect CMRG's daily demand flow.
The new technology infrastructure has improved CMRG's ability to communicate with its core base of 50 vendors, which include Nautica and Polo Ralph Lauren. "Building enough confidence in our vendors is another key component of the program," says Hernreich. "We can't ship to the stores what we don't already have in the warehouse. If the vendors don't deliver what we need and when we need it, then the program is going to fail. We are constantly working with our vendors to improve the forecasting for individual SKUs."
Back in fighting shape
So far, at least, it appears that CMRG's confidence in its new distribution capabilities may be justified. Though it's been in place less than a year, the new WMS has made a world of difference. Take the receiving process, for example. In the past, it took workers two to three days to unload trucks and sort the merchandise into piles of shirts, pants and jackets before repackaging and shipping the items out to the stores. Now with the automated system in place, it takes only two hours. Not only does that save time and labor, but it also reduces the amount of inventory in transit, which ultimately reduces inventory investment.
There are other benefits as well. "Our costs per unit have dropped by about 20 percent," Hernreich reports. "Our ability to move products through the warehouse has improved tremendously. We've achieved some great productivity gains and the resulting capacity gains and labor savings have been substantial." That added capacity meant the company's 700,000-square-foot DC in Canton, Mass., had no difficulty absorbing the extra inventory when CMRG acquired the 22-store Rochester Big & Tall chain in November.
And now that the retailer has better supply chain visibility, the next step will be to harvest the information it collects to improve customer service. Hernreich explains that wireless networks will feed vital customer information into handheld PDAs issued to sales clerks. When a return customer enters a store and supplies an ID number or phone number, the customer's information— including size, favorite colors and past buying history—will appear on the PDA.
A hefty commitment
At press time, the new systems were still not quite ready for prime time. With the in-stock guarantee's rollout just weeks away, Hernreich admitted that the clothier still needed to tweak its supply chain (the out-of-stock rate remained stuck in the double-digits). But he's confident that the company will be able to cut that out-of-stock rate in half soon, eventually settling at less than 5 percent.
Once its new programs are in place, Hernreich believes that CMRG will easily dominate its corner of the market. "What we are after is growing market share for the niche that we cater to, and there is no other player that can get even close to the level of execution we're targeting," says Hernreich. "That's where we differentiate ourselves from all the other retailers—by executing at a very high level."
and the beat went on
On the face of it, fashion retailer Maurices' announcement that it had finished installing a warehouse management system at its Johnson, Iowa, distribution center didn't seem so very remarkable. After all, companies install warehousing systems every day.
But in fact, Maurices did face some out-of-the-ordinary challenges. For one thing, the Johnson facility, which supplies all of the retailer's 450 stores, flies solo. There's no backup site that can take over in the case of a malfunction. For another, the clothier, which caters to 20-somethings, carries a whopping 40,000 stock-keeping units. In the world of fashion, where trends flare up and flame out as quickly as a 4th of July sparkler, those 40,000 SKUs qualify as highly perishable merchandise.
The challenges notwithstanding, Maurices was anxious go ahead with the installation. Not only was the company eager to boost flow-through in its DC, but it also needed a way to manage seasonal peaks and valleys in demand and get a handle on its constantly changing item mix. And as any supply chain manager knows, those are jobs for a powerful warehouse management system.
The system Maurices chose was a warehouse management system from HighJump software. And today, Maurices is using the system's warehouse management, wave planning and management visibility capabilities to increase flow-through in its high-volume fulfillment and distribution facility. Part of the system's appeal is its flexibility. The advanced wave planning capabilities allow Maurices to group pick orders by common item size, shipping destination or other characteristics. Another plus has been the advance warning it provides. Maurices can use the system's reporting functionality to anticipate bottlenecks at various points in the facility, allowing management to reallocate staff in order to keep operations on schedule.
Though more than a few hearts likely skipped a beat when the system went live, both vendor and customer now say they're happy with the way things have played out. "We're pleased with how quickly Maurices embraced the system and began to see improvements in its daily operations," says J.D. Harris, vice president of operations at HighJump. And the transition itself? There were no problems, reports Tim McGrath, Maurices' distribution center manager. In fact, he says, it went surprisingly well: "We didn't miss a beat when the system was turned on."
States across the Southeast woke up today to find that the immediate weather impacts from Hurricane Helene are done, but the impacts to people, businesses, and the supply chain continue to be a major headache, according to Everstream Analytics.
The primary problem is the collection of massive power outages caused by the storm’s punishing winds and rainfall, now affecting some 2 million customers across the Southeast region of the U.S.
One organization working to rush help to affected regions since the storm hit Florida’s western coast on Thursday night is the American Logistics Aid Network (ALAN). As it does after most serious storms, the group continues to marshal donated resources from supply chain service providers in order to store, stage, and deliver help where it’s needed.
Support for recovery efforts is coming from a massive injection of federal aid, since the White House declared states of emergency last week for Alabama, Florida, Georgia, North Carolina, and South Carolina. Affected states are also supporting the rush of materials to needed zones by suspending transportation requirement such as certain licensing agreements, fuel taxes, weight restrictions, and hours of service caps, ALAN said.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Two European companies are among the most recent firms to put autonomous last-mile delivery to the test with a project in Bern, Switzerland, that debuted this month.
Swiss transportation and logistics company Planzer has teamed up with fellow Swiss firm Loxo, which develops autonomous driving software solutions, for a two-year pilot project in which a Loxo-equipped, Planzer parcel delivery van will handle last-mile logistics in Bern’s city center.
The project coincides with Swiss regulations on autonomous driving that are expected to take effect next spring.
Referred to as “Planzer–Dynamic Micro-Hub w LOXO,” the project aims to address both sustainability issues and traffic congestion in urban areas.
The delivery vehicle, a Volkswagen ID. Buzz battery-electric minivan, will feature Loxo’s Level 4 Digital Driver navigation software, a highly automated solution that allows driverless operation. The van was retrofitted to include space for two swap boxes for parcel storage.
During the two-year pilot phase, Loxo’s Digital Driver will navigate a commercial vehicle several times a day from Planzer’s railway center to various logistics points in Bern's city center. There, the parcels will be reloaded onto small electric vehicles and delivered to end customers by Planzer’s parcel delivery staff.
Following the completion of the pilot phase, Planzer and Loxo will build on the program for rollout in other Swiss cities, the companies said.
The partners said the project addresses the increasing requirements of urban supply chains and aims to ensure the “scalability of their disruptive solution.” With largely emission-free delivery, it contributes to greater levels of sustainability for the city as a living space, they also said.
“The uniqueness of this project lies in the fact that it will have a direct impact on society,” Planzer’s CEO and Chairman Nils Planzer said in a statement announcing the project. “We didn't just want to integrate automated technology into existing systems, we wanted to develop a completely new concept and a new business model.”
As the hours tick down toward a “seemingly imminent” strike by East Coast and Gulf Coast dockworkers, experts are warning that the impacts of that move would mushroom well-beyond the actual strike locations, causing prevalent shipping delays, container ship congestion, port congestion on West coast ports, and stranded freight.
However, a strike now seems “nearly unavoidable,” as no bargaining sessions are scheduled prior to the September 30 contract expiration between the International Longshoremen’s Association (ILA) and the U.S. Maritime Alliance (USMX) in their negotiations over wages and automation, according to the transportation law firm Scopelitis, Garvin, Light, Hanson & Feary.
The facilities affected would include some 45,000 port workers at 36 locations, including high-volume U.S. ports from Boston, New York / New Jersey, and Norfolk, to Savannah and Charleston, and down to New Orleans and Houston. With such widespread geography, a strike would likely lead to congestion from diverted traffic, as well as knock-on effects include the potential risk of increased freight rates and costly charges such as demurrage, detention, per diem, and dwell time fees on containers that may be slowed due to the congestion, according to an analysis by another transportation and logistics sector law firm, Benesch.
The weight of those combined blows means that many companies are already planning ways to minimize damage and recover quickly from the event. According to Scopelitis’ advice, mitigation measures could include: preparing for congestion on West coast ports, taking advantage of intermodal ground transportation where possible, looking for alternatives including air transport when necessary for urgent delivery, delaying shipping from East and Gulf coast ports until after the strike, and budgeting for increased freight and container fees.
Additional advice on softening the blow of a potential coastwide strike came from John Donigian, senior director of supply chain strategy at Moody’s. In a statement, he named six supply chain strategies for companies to consider: expedite certain shipments, reallocate existing inventory strategically, lock in alternative capacity with trucking and rail providers , communicate transparently with stakeholders to set realistic expectations for delivery timelines, shift sourcing to regional suppliers if possible, and utilize drop shipping to maintain sales.