A Goodwill Industries Thrift Chain Attracts Customers ...



Overview

Country or Region: United States

Industry: Retail

Customer Profile

Goodwill Industries of Middle Tennessee (GMT) manages 28 thrift stores to fund training classes and job placement. In 2005, GMT placed 1,018 people.

Business Situation

Tracking an ever-changing inventory of clothes and other goods, the aging QuickSell retail system lost data and was a challenge for new staff to learn.

Solution

The IT manager reviewed several systems but felt that Microsoft® Retail Management System gave GMT its best choice for data portability, more flexible reports, and intuitive point-of-sale screens.

Benefits

■ Dependence on government funding reduced by 90 percent

■ 33 percent faster marketing decisions

■ Merchandise moved to match store demographics

■ Tighter procedures and reports reduce theft

| | |“Increased profitability of our retail stores has helped drastically reduce our dependence on government support while serving more people, more efficiently.”

David Lifsey, President, Goodwill Industries of Middle Tennessee | |

| | | |Nonprofit Goodwill chains are part of the retail landscape in 24 countries. Goodwill Industries of |

| | | |Middle Tennessee solicits used clothing and other items, which it resells economically to support |

| | | |training, job placement, and post-employment support for people who are disadvantaged or have |

| | | |disabilities. Five years ago, those efforts were supported primarily by tax money. But the previous |

| | | |QuickSell retail system wasn’t helping. It lost data, slowed sales, opened doors to theft, and was |

| | | |hard to learn. Microsoft® Retail Management System was installed in January 2003. Today, managers |

| | | |write data once—not into five spreadsheets. Associates learn quickly, nightly closings are faster, |

| | | |and daily data transmissions to corporate are accurate. Reports show managers and executives the data|

| | | |they want, as they wish to see it. And dependence on government funds has been slashed to five |

| | | |percent. |

| | | | |

|[pic] | | |[pic] |

| | | | |

Situation

The 28 stores of Goodwill Industries of Middle Tennessee (GMT) throughout middle and western Tennessee fund training, job-finding, and an employment clearinghouse for people who are disadvantaged or have disabilities.

In 2005, GMT trained 3,554 people and placed 1,018 in jobs, its highest yet. Classes taught skills in fork-lift operation, security, retail, and the Microsoft® Office System.

Reducing Dependence on Taxes

To support classes and employment efforts, GMT solicits donations of used clothing and other goods, which it must price for quick sale, yet viable revenue levels. GMT must also promote its training and employment services to those it can help, and to nearby employers.

Five years ago, GMT’s employment and training budget came primarily from government support. Today, through retail efficiencies and energetic marketing, GMT President David Lifsey and his team of 900 employees have raised revenues to U.S.$26,000,000 and have cut government support of employment programs to five percent of that budget.

Active Marketing

GMT stores range from 10,000 to 27,000 square feet and have three or more registers selling all types and sizes of clothing, furniture, housewares, glass, jewelry, electronics, toys, and books. Most items are previously used, but GMT also buys especially economical new merchandise or product overruns and discontinued items.

GMT’s outlet store receives goods that did not sell in other stores, which are then sold by weight. To ensure all possible revenue, even the slowest-moving, unsold goods are sold in bulk to salvage dealers.

The thrift chain’s active Web site enables shoppers to purchase GMT gift cards through a partnership with Givex. A link connects to , where auction-style bidding for hundreds of items might buy a used laptop for $26 or a mink coat “in mint condition” for $1,650.

Information Hurdles in the Thrift Industry

Most retailers control a finite number of SKUs (stock-keeping units) that they purchase, price, track, and describe. But using a separate SKU for each distinct item GMT receives would raise the SKU count sky-high. “Since everything is donated, we might have 10 types of men’s leather coats,” explains David Lifsey, President of GMT. “After they sell, the next 10 will be different. It’s always changing. We address this problem by grouping items into broad categories, but we can’t realistically track items in detail.”

That tremendous variety of merchandise was vexing to Jeff Gregory, IT Manager for GMT. The old QuickSell Commerce software exacerbated the situation,” he explains, “but it lacked adequate security, connectivity, reliability, and reporting flexibilities. It was dial-up and had no networking capability, which added more unpredictability. Nightly sales reporting was virtually nonexistent.

“Point-of-sale screens weren’t always intuitive, so it was hard for new cashiers to learn and use efficiently. Another key reason to change was internal theft. We saw procedures we needed to implement to discourage and detect internal loss, but we couldn’t make them happen.”

Impacts on efficiency were enormous. Gregory and Lifsey needed to know which types of goods sold best in which stores, to offer merchandise to the right customers. “But with vague or late reports,” says Lifsey, “how do you optimize distribution of goods? Our West Nashville (Charlotte) store is more of a working-class public than our store in Franklin, so it sells more blue jeans and T-shirts. The Franklin store sells more long-sleeve items and sweaters suitable for office work, so we can send higher-cost brands there. But that was all we knew! Inventory was always an extreme challenge.”

“Since we didn’t have clear knowledge of what sold best where,” asks Lifsey, “how could we price items for fast movement, yet charge enough to pay staff and further our mission? We face competition from other thrift stores and large-chain discounters. When we priced something too high, we’d have to move it from one store to another, then to the outlet store, and then maybe sell it to a rag dealer. A wrong judgment meant more than ‘no sale.’ It generated extra tasks and trips.”

Solution

Even though Gregory knew that Microsoft Retail Management System was QuickSell’s successor, and would therefore require minimal staff retraining, he inspected several other systems to optimize this important choice for his cash-conscious organization.

“Choosing Microsoft Retail Management System was our best avenue, with or without having QuickSell previously,” says Gregory. “Managers tell me this is one of the easiest retail systems they’ve used. Its network capabilities gave us complete nightly information, without data loss. And its store-level report engine offers managers very usable reports that they can customize. This software also added important security features.”

Installation took place in January 2003. Gregory reports, “Now, with our sales and inventory data stored in Microsoft Retail Management System, we can easily export data to Crystal Reports for even greater flexibility. From there, we move data into Microsoft Business Solutions–Great Plains® software for financials and analysis.” Microsoft has recently introduced new product offerings that transfer data directly from Microsoft Retail Management System into Microsoft Great Plains.

Approximately 400 GMT employees use Microsoft Retail Management System. When Gregory needs intricate data manipulation, he extracts it from Microsoft SQL Server™, the database engine that comes with his new product.

Each store uses Microsoft Retail Management System Store Operations software, the store-level solution for even very large stores. At user-defined intervals, Store Operations sends data to the enterprise-level retail solution, Microsoft Retail Management System Headquarters software for centralized data warehousing.

Built-in process worksheets in Headquarters allow GMT to automatically transmit updates—such as price changes, discount periods, and new item descriptions— from corporate offices to its stores. Updates can be specific to single stores, store groups, regions, or the entire chain, and they can address categories, items, departments, and other specifics.

The Givex customer loyalty program allows GMT customers to buy, check balances, and spend gift card money chainwide. The GMT Web site enables customers to buy cards and increase or check balances online. Givex accounting is instant, chainwide, so a customer can’t spend all of his or her Givex card money in one store, then quickly spend it again in another store.

Founded in 1999, Givex processes gift card and loyalty transactions and provides payment processor gateway services for a wide range of industries, including hospitality, retail, grocery, and petroleum. Givex is among the fastest growing transaction processors in North America.

Benefits

Lifsey, his store managers, and corporate managers can now quickly get the fast and complete information they need to better track sales and inventory flows. Comments Lifsey, “I’d estimate that our ability to respond to sales trends is about 33 percent faster than with our earlier system.”

Additionally, Lifsey reports, “Increased profitability of our retail stores has helped drastically reduce our dependence on government support while serving more people, more efficiently.”

Better Reports Generate More Income

“We maximize our income now,” Lifsey says, “by sending jeans to the store that today demands jeans, and moving radios to where radios will sell. We don’t send what we think will sell, but what has sold. Our decision making is fact-based. We have better data for pricing, and we assign and move merchandise more intelligently than before. When we do move merchandise among stores, reports tell us what went where.”

Gregory built several highly detailed reports to fit GMT’s specific reporting needs. Managers now access these reports to provide real-time sales and inventory data on demand.

“We can more tightly track inventory on-hand,” explains Lifsey, “and we’re getting better and better at that, considering the impossible number of items that we track. We run smarter sales and specials, or we know when to sell off the really slow items in bulk.

“Because we know our customers’ needs better, they see more of what they want on our shelves. They come back more often because each shopping experience is a success.”

Now, the ease of accessing data makes it easier for Goodwill Industries of Middle Tennessee to pinpoint loss. “Having hard and current numbers helps us reduce theft loss. Being able to query problems earlier adds an air of security that we owe directly to our new reporting power. Using customized loss-prevention reports, we can now identify theft almost on a real-time basis. There’s a new sheriff in town! No one can dispute the report. And that goes for every report we run,” says Gregory.

Building Loyalty and Return Visits

Gregory emphasizes the importance of transaction speed. “Checking out customers is faster now than with QuickSell,” he reports. “Screens and keystrokes are fewer and more intuitive. We cut credit card processing from 45 and 60 seconds to less than five seconds after Microsoft Certified Partner POSitive Technology helped convert us to Internet-based processing. When customers don’t wait as long, they come back more often. If they expect five minutes in line or longer, they might not stop by.”

In the outlet store, clothes are sold by weight, so scales in the counters and floor interface with Microsoft Retail Management System to speed checkout and ensure accurate sales records and customer receipts.

Cutting Down Task Times

Using the previous spreadsheet methods to track and transmit sales and inventory data, store managers might have duplicated the same information five times. Gregory adds, “Now, once the data is in Microsoft Retail Management System, we can move information where it’s needed and present it the way we need to see it. Managers used to use the same slow processes for their shipping data, and now that’s streamlined many times over.”

From a system-maintenance point of view, Gregory likes being able to do backups more easily and faster. Even though IT staff were able to perform nearly all the credit-card setup and system enhancements, Gregory reports responsive support from Microsoft support teams, when they were needed.

Advice to Retailers

Gregory suggests that other retailers who are considering a system upgrade should contact colleagues and even competitors to learn from others’ system victories and missteps. “You can’t know too much,” he notes.

Once a new system is installed, Gregory counsels other retailers to set up a test environment, separate from daily operations, where they can inspect and see the pluses and minuses of proposed system changes before putting them into practice.

Finally, he emphasizes the value of using a Microsoft Certified Partner with a proven background in Microsoft Retail Management System for conversion and advice.

Microsoft Retail Management System

Microsoft Retail Management System offers a complete store automation solution for small and medium-sized retailers, streamlining point-of-sale, customer service, and store inventory management, and providing real-time access to key business metrics. Microsoft Retail Management System is a comprehensive solution for single-store and multi-store retailers that empowers independent proprietors, store managers, and cashiers through affordable and easy-to-use automation. Microsoft Retail Management System has the flexibility and scalability to grow with a retailer’s business. It works with the Microsoft Office System, the Microsoft Windows® Small Business Server operating system, and leading financial applications to provide end-to-end support from the cash register to the back office.

For more information about Microsoft Retail Management System, go to:

pos

-----------------------

| |Software and Services

■ Microsoft Retail Management System

■ Microsoft Windows 2000 Advanced Server

■ Windows XP Professional SP2

■ Microsoft Business Solutions–Great Plains version 7.0

|Hardware

■ Compaq ProLinea servers

■ Hewlett-Packard and Compaq desktop PCs

■ Cherry keyboards

■ Metrologic scanners

■ Epson receipt printers

■ Indiana cash drawers

Partner

■ POSitive Technology | |

“Because we know our customers’ needs better, they see more of what they want on our shelves. They come back more often because each shopping experience is a success.”

David Lifsey, President, Goodwill Industries of Middle Tennessee

| |

“Having hard and current numbers helps us reduce theft loss. Being able to query problems earlier adds an air of security that we owe directly to our new reporting power. ... There’s a new sheriff in town!”

Jeff Gregory, IT Manager, Goodwill Industries of Middle Tennessee

| |

© 2006 Microsoft Corporation. All rights reserved. This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY. Microsoft, Great Plains, Windows, and Windows Server are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. All other trademarks are property of their respective owners.

Document published January 2006 | | |

For More Information

For more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234 in the United States or (905) 568-9641 in Canada. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:

For more information about POSitive products and services, call (301) 519-1088 or visit the Web site at:

For more information about

Goodwill Industries of Middle Tennessee products and services, call (615) 742-4151 or visit the Web site at:



“Waiting on customers is faster than with QuickSell. Screens and keystrokes are fewer and more intuitive. We cut credit card processing from 45 and 60 seconds to less than five seconds.”

David Lifsey, President, Goodwill Industries of Middle Tennessee

| |

“I’d esti *3±¾@ W × Ø #%°º

"

$

Ä

ƒ

?

ã

ê

d

e

Â

Ç

Š‹Œ??‘’”•–ùîùîùêùêùßùêùêùêùÔùÃÔùÔ»Ô»Ô¬Ô»Ô»Ô?ÔŽÔz?ÔmÔh¨]hEF¤CJ

mH sH &j÷Ch¨]hEF¤B* |U[pic]mH phÿ™sH je[?]h¨]hEF¤U[pic]mH sH h¨]hEF¤B* |mH phÿ™sH h¨]hEF¤CJ

aJ

mH sH

hEF¤mmate that our ability to respond to sales trends is about 33 percent faster than with our earlier system.”

David Lifsey, President, Goodwill Industries of Middle Tennessee

| |

Among the classes are hands-on computer labs that teach skills in using the Microsoft Office System.

Goodwill operates a network of 205 independent, community-based organizations in the United States, Canada, and 22 other countries.

The Goodwill store in Franklin, Tennessee, shows the smart, new face of modern Goodwill stores.

................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download