How bebe Fast-Tracked The Omni-Channel Odyssey

By Matt Pillar, editor-in-chief, Integrated Solutions For Retailers


July 2013 Integrated Solutions For Retailers

bebe was building cross-channel inventory prioritization algorithms and CRM data visibility before “cross-channel” was cool. In a recent sit-down with CIO Hamid Mashouf, we got some insight into where bebe is headed next.

Hamid Mashouf has served as head of technology at bebe for more than 10 years. During his tenure there, Hamid and his IT teams have replaced and revamped the entire spectrum of the company’s technology assets, from telecom to infrastructure to security. They’ve also upgraded the enterprise applications at bebe from the supply chain to the stores, enabling the business to grow internationally and expand the borders of digital and mobile. Prior to joining bebe, Hamid spent 16 years with Hewlett-Packard and Agilent Technologies in various engineering, management, and strategic scientist roles. Hamid’s experience blends one part entrepreneurial, smallcompany agility with one part large-company process and practicality, a mix that has helped him develop the cross-functional teams necessary to guide bebe through retail’s omni-channel revolution.

As technology and the retail systems decision making that drives it have become the cornerstones of cross-channel retail success, it’s become incumbent on Mashouf and his team to serve the business needs of a brand that’s been a pioneer of modern fashion forward apparel retailing since the early days of crosschannel commerce. For his part, Mashouf, as CIO of bebe, has proven his mettle. His vision for customer-centric retailing at bebe provides us with a compelling look inside the mind of a man who understands how to navigate the crossroads of business and technology. That know-how is best illustrated by Mashouf ’s leadership of bebe’s mission to provide a truly omni-channel customer experience.

Fast-Track To Omni-Channel: Step One, The Customer
According to Mashouf, “the omni-channel journey” takes retailers down two parallel roads: One leads to the external optimization of the customer experience at all touchpoints along the path to purchase, while the other leads to the internal optimization of systems and core platforms to accurately manage orders, promotions, inventory, style/product, and customer data in a channel-agnostic manner. Both, he says, are dependent on the centralization of data.

Architectural efforts in data centralization are not a new topic at bebe. As far back as 2003, the company recognized the power of data centralization for improving the client experience, building internal efficiencies, and developing business intelligence. That foresight led the company to build centralized data management and data control measures, initially focused on customer data and loyalty initiatives, soon followed by centralized style and product data in the supply chain, which later enabled seamless cross-channel order/inventory management between stores and the Web.

“In anticipation of growth in consumers’ engagement with new brand touchpoints and sales channels, we started to create a 360-degree view of customers and loyalty more than ten years ago,” says Mashouf. “It’s our goal to give customers a great personalized experience as best we can in any channel, and to do that we have to be able to recognize who they are, regardless of the channel in which they engage with the brand.”

Today, many retailers struggle with the proliferation of mobile devices and social media and the resulting ease with which customers can change their behavior as they switch seamlessly among them. Because Mashouf and bebe laid the foundation for customer data centricity early, the company found itself ahead of the curve. “Centralization of data makes it more efficient for retailers when they’re ready to deploy cross-channel or omni-channel enterprise systems that will accommodate that ever-changing behavior,” says Mashouf. For bebe, a big portion of those omni-channel systems come in the form of POS, e-commerce, CRM, and order management solutions from MICROS. The two companies have been working together since bebe went live on MICROS for POS in 2008.

“To provide a customer with the best, most consistent experience you can, regardless of the channel they are engaging with you, you have to know who they are,” says Mashouf. “That’s very difficult without centralized customer data.” To that end, he says seamless recognition of the customer from one channel to the next leads to another aspect of CRM that must be centralized, and one that bebe doesn’t take lightly. “Building customer loyalty is becoming harder all the time. With so much choice at their fingertips, consumers can easily look elsewhere. So, we’ve taken great care to create seamless access to customer loyalty accounts across channels as well,” he says.

Fast Track To Omni-Channel: Step Two, Inventory
The cross-channel customer and loyalty initiatives at bebe have seen rapid success, which has only been bolstered by its active social media presence. The brand boasts nearly 3.5 million Facebook fans and has made great strides in the art of promotion integration with social media via its traditional and mobile commerce sites. With all that seamless customerfacing connectivity as well as back office systems that enable the company to leverage it, it’s imperative that bebe focus not just on the glamour of the experience, but also on the mechanics of fulfillment.

The cool factor established by brands that have rolled out great digital channels — and the CRM and loyalty applications that create incredible customer experiences — set high expectations among consumers. Those expectations must be carried through to the fulfillment experience, which today is predicated on cross-channel inventory optimization. “Our efforts to centralize inventory data to create visibility across channels has not only served our customers well, but it’s also had a positive impact on our gross margin and, thus, our bottom line,” says Mashouf.

Again, the centralization of enterprise-wide inventory data was the first step to enabling the visibility to meet crosschannel consumer demand, visibility that also enabled the company to reduce supply chain inefficiency and minimize excess inventory carrying costs.

In 2009, the groundwork of a centralized inventory repository at bebe was put to good use when the company turned on store-from-other-store order brokerage for sales fulfillment, which it calls “remote-sends.” Store-order-from-Web was implemented the following year, allowing store-level sales associates to even further consummate transactions that would have previously been lost to out-of-stocks. “We’ll soon go live with a pilot of order-online-ship-from-store,” says Mashouf. “If an order can’t be fulfilled from a DC that serves the e-commerce or mobile sites, we’ll be able to ship the merchandise to the consumer from on-hand inventory in one of our 244 stores.” Again, bebe finds itself among the pioneers of a sales fulfillment model that few have dared to contemplate, especially in fashion, where store inventories are lean. None of it would be possible without irrefutably accurate, all-channel inventory visibility.

Of course, these new store-level fulfillment endeavors will require some cultural and business processes to change, in addition to the technology that makes them work. With that in mind, we asked Mashouf how omni-channel retailers effectively handle the traditional “credit for the sale” challenge.

“There really is no silver bullet or one-size-fits-all solution, and the retailer must select what will work best within their environment. Some will credit the sale/commission to where the demand arises and manage the fulfillment side for operational excellence with cross-channel visibility and reporting. Some will credit the sale/commission to where the demand is but also provide an incentive to the fulfillment side to ensure operational excellence. Others will credit the sale/ commission to the fulfilling side with or without an incentive to the demand side,” Mashouf explains. “Progressive retailers will do what is best for the company as opposed to the traditional approach of optimization for a single channel. They will strive to develop new cross-channel metrics and institutionalize their importance across all channels. They will bring down the traditionally established culture of isolated silos and channels and will optimize what is best for the company overall to deliver the best possible customer experience. It is important to keep innovating as a company and collective executive team and not be paralyzed by the unknown or a potentially obsolete company culture.”

Mashouf says retailers looking to enable cross-channel sales fulfillment should take care to consider these historically sticky cross-channel issues with the company hat on and do the right thing for the customer. He says the ability to execute depends somewhat on the “inner workings” and history of how the retail enterprise is structured and its ability to collaborate among channels seamlessly. “Setting up the right analytics is also a key to success. You have to analyze your cross-channel opportunity, monitor your metrics, and report on them daily, weekly, and monthly. Then you can make the changes that will optimize sales and service for the customer and for the company’s gain,” he says.

The Omni-Channel Strategic Plan: A Living Document
Mashouf mentions that the optimization of systems and centralization of data that lead to an omni-channel reality has been compared to major home construction. “You hire a contractor and you build it the way you want it as you go. It may sound easy enough on the surface, but it is definitely an arduous journey. There will be changes and seemingly endless options to consider along the way. It will require smart and timely decision making with solid change/project management. Once you’re cognizant of that and you’ve accepted the fact that you need to be extremely careful — as you will be living in the house while it is undergoing construction — only then will you have established the right environment to modify the blueprints based on evolving consumer expectations.”

As bebe pushes toward the billion-dollar revenue mark, Mashouf will continue to focus on the exciting frontier of making the store experience more fun for shoppers, on new developments in the digital, mobile, and payment space, and on the intersection of supply chain/inventory optimization and cross-channel consumer demand. “The world of retail technology is getting more exciting as retail sales models transform,” he says. “Most — if not all — strategic initiatives in retail companies today have a huge technology component. That makes it a very interesting time to be a CIO in retail.”

A Single Platform For Omnichannel Success

As this story illustrates, deeply integrated systems and pulling together cross-channel order, promotion, inventory, and customer data into one environment lays a solid foundation for an omni-channel enterprise. Once that’s done, creating seamless cross-channel customer experiences and equally fluid movement of inventory at the ground level becomes a much easier challenge.

In 2008, bebe implemented MICROS for store-level POS, soon followed by the solutions provider’s CRM, order management and e-commerce systems, all deeply integrated to form the cornerstone of an omni-channel architecture. Collectively, in addition to processing storelevel POS transactions, the solutions set gives customers and associates real-time and cross-channel visibility into all aspects of customer relationships and loyalty, ordering, and fulfillment.

This visibility has enabled bebe CIO Hamid Mashouf to understand the intricate relationship between inventory standing and customer expectations, a relationship that’s been challenging for legacy systems-based retailers in the new cross-channel consumer environment.

Today, bebe customers and associates have near real-time inventory awareness, whether online or in stores, allowing the company to experiment with a variety of consumer fulfillment models to fulfill consumer demand when and where they expect it. The interface allows customer-specific adjustments such as merchandise changes and additions, delivery window changes, or fulfillment choices (i.e. the shipfrom- store pilot that’s underway, and pick-up-in-store in future phases) to be made immediately after an order has been placed, if necessary.

Equally important to Mashouf is the back office functionality and visibility afforded by the single, cross-channel platform. He says integrated business analytics have helped bebe make positive headway in its inventory optimization effort, resulting in cost reduction and improvements in gross margin and profit for the company.


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