Case Study

Old-Time Values Blend With New Technology

Retail Technology

Competing with big-box retailers has become par for the course for SMBs. One sports retailer is using a retail management system to remain true to its customers and increase sales.

Retail trails behind only cable as the industry with the largest proportion of customers who will stop doing business with a company that has poor customer service. In fact, in 2017, 54 percent of consumers stopped doing business with a company due to bad service, significantly up from 49 percent in 2016.1

For Omega Sports, a family-run retailer with 14 stores across North Carolina, commitment to community and customers has been at the heart of the company since opening in 1978. Craig Carlock, CEO of Omega Sports, says that retailers must maintain good customer service and find ways to participate in the evolution taking place in the retail sector. Maintaining this balance requires retailers like Omega to remain fluid and find new ways to successfully compete.

Employing 240 full- and part-time associates, Omega’s purpose is to fit customers with the right gear, from running shoes to baseball bats. Essential to operating the stores, which range in size from 5,000 to 8,000 square feet, is good inventory control. But the legacy retail management system (RMS) Omega relied upon did not offer insight to help store managers know which items were selling well, which should be reduced for sale, and which should not be brought into the store at all. “So from a planning perspective, Omega could not effectively compete in today’s marketplace,” says Carlock.

The Power of Data

Like any SMB, Omega competes against the area’s big-box retailers. Omega does this effectively by retaining its traditional customer service values and using technology to seek new avenues of opportunity and growth.

“When you have competition, it makes you ask what you can do to compete as effectively as possible,” says Carlock. “One way is to use all the potential tools available, and data is one of those tools. We want to put that data to work.”

Many SMBs invest in people and product, but as technology improves it is becoming apparent there is tremendous opportunity to build the business through better systems and better access to data. Carlock understands this, so, in September 2016, Omega implemented the Celerant retail management system, which includes both a point of sale (POS) and purchase order system, as well as the ability to monitor inventory and maintain and retrieve data. “It was very appealing to us to have one system rather than taking a best-of-breed approach, purchasing different systems from different vendors and then hoping those systems would communicate with each other,” says Carlock. “That sounded laborious, tedious, expensive, and potentially ineffective, so we went with one company and one solution.”

All 14 stores, Omega’s main headquarters, and warehouse went live with the Celerant RMS within a few months. Using the solution has put data at the center of everything Omega does, according to Carlock. “The Celerant retail system is basically Omega Sports’ central nervous system,” he says. “We don’t do anything without a set of data — we don’t change a price, we don’t issue a purchase order, we don’t take a refund, we don’t bring in a new item, we don’t set up a new vendor without working with Celerant.”

He adds that data related to purchasing behavior, fast- and slow-selling items, and even which items are selling in certain parts of the state or on certain days of the week all resides in the RMS. “This is a rich set of data that can help a business if it's thoughtful about using it,” he says.

Benefits to the Brick-and-Mortar Business

That data has had a significant impact on Omega’s physical stores. Carlock says he now tracks sales at the store level down to the hour, which enables him to optimize store hours and increase sales. “That is definitely an advantage that has gone straight to our bottom line relatively quickly.”

In addition, Omega has set up email promotions that appeal to different consumers on different days of the week. The RMS maintains a database of 140,000 customers who voluntarily signed up to receive email communications from Omega. The retailer emails them periodically to alert them about new items in the stores, seasonal promotions, and even safety tips. Carlock says this has yielded substantial sales.

“Understanding which items are selling, reducing our exposure to items that aren’t selling, optimizing our hours, and knowing which emails generate sales are combining to help us effectively compete against those larger-box retailers,” says Carlock.

The Three Es: Email, EDI, E-Commerce

Taking its competitive nature to the next level, Omega plans to take full advantage of Celerant’s digital marketing system. As customers join Omega’s loyalty program, they are added to the database. Then, the sports retailer will send them email offers related to their past purchasing habits. “We can tailor the content so customers only get ads and information from us that is relevant to their interests,” he says. “Hopefully, as a result, they will engage more with our brand and appreciate the fact that we’ve taken the time to care about what they buy and to offer them helpful information.”

While Celerant can offer a full email service from promotion creation to providing reports, Omega handles the entire process on its own. Omega is also in the process of opening its first online store this summer. “Having an e-commerce site is a way to convenience customers in a way they want to be served,” Carlock says. “And that can only help us stay competitive in the evolving retail industry.”

Omega will link its online selling to its loyalty program so customers can accumulate rewards and discounts by buying either online or in-store. As part of its e-commerce program, Omega opted for Celerant’s search engine optimization (SEO) services. With this ongoing service, a team of digital marketing experts will be analyzing both Omega’s website and that of its competitors, making frequent changes to the site and ensuring that Omega Sports stays competitive on the web and listed on the first page of Google’s search results.

“Being an SMB retailer, a big factor for us has been to determine how we can handle all of this while staying within our budget, which is of course much more conservative in comparison to our big-box competitors,” says Carlock. “Our decision to partner with one technology vendor to provide all aspects -- our stores, the new website, email marketing, as well as search engine optimization services -- enables us to overcome that challenge. Having one software partner also minimizes my team’s back-and-forth and support interactions, resulting in more efficiency across the board.”

Additionally, Omega will rely on electronic data interchange (EDI) connectivity to access products online through other vendors, which will ship from these vendors’ warehouses. Carlock says, “Online, we will offer customers items we don’t carry in our stores, which means customers will have more products and wider product lines to choose from, allowing us to compete with the larger retailers.”

Maximize Investments to Create a Brand Experience

While the big-box stores may have more resources to invest in technology, a smaller company like Omega can still make those investments and have similar capabilities to those of the big-box retailers. But Carlock says to be shrewd about the investments.

“There’s a risk of not keeping up with the larger retailers, so we weigh that against our goal, which is to keep up but to do so in a measured way to maximize our return on investment,” he says.

Omega is making the most of its investment, whether serving customers in stores or online. Carlock says the goal is to create a brand experience and engage with the customer at a level that distinguishes Omega from big-box retailers. Combining that customer service with technology enables him to understand purchasing patterns and could reasonably increase business by upwards of 10 percent in the next few years, he says.

“We will never stop thinking about technology and how we will use it,” he says. “Using technology to its greatest possible extent is one of the smartest things a leader can do. For us, technology and data will be important parts of our effort to put distance between ourselves and big-box retailers.”

Reference

1. Van Dyke, Dan. Here’s how customer service can drive retail churn. Business Insider, Jan. 23, 2018, www.businessinsider.com/heres-how-customer-service-can-drive-retail-churn-2018-1, accessed May 24, 2018.