New technology will boost Pumpkin Patch’s already strong presence on the web, writes Paul Smith
If there was ever any doubt that little people equal big bucks to retailers, the global expansion of New Zealand success story Pumpkin Patch should kick them into touch with cute fluffy booties. The kids’ clothes company, which boasts revenue of $400 million from its wholesale and retail operations across 20 international markets, has just completed work on its ‘second generation’ strategy to extend its growth into the online marketplace.
A number of local retailers are now taking tentative steps back into the ecommerce game, after ditching plans amid disappointing returns and disillusion in the dotcom crash a decade ago. However, Pumpkin Patch has maintained a sales website since 2000, and general manager of information technology Zarina Thesing says this has given the chain a decade of lessons learned that are unavailable to its competitors.
She has just completed a technology revamp, which in part was aimed at bringing the same sales capabilities to its online store as those that exist in its real world stores. The technology foundations are now in place for growth online and future investment in new areas such as social media and online ‘upselling’.
Creating an online retail experience that matches a store visit delivers complexities that retailers often only discover once they have committed to expensive technology projects.
“Our underlying challenge was to provide one version of the truth to many mediums to deliver a true multi-channel retail strategy, and one that would work across borders,” Thesing says.
“Prior to the changes, our websites didn’t have the same promotional abilities as our point of sale (POS) systems, so we had to change the systems to enable BOGOs (Buy one get one free), 50 percent off offers and everything that our POS system could already handle.”
Pumpkin Patch had identified a potentially lucrative target market of time-poor mothers, who are often unable to visit a retail outlet because of family or other commitments, as well as those who research purchases online to save time before visiting a store in the high street or mall.
While it has an apparently functional website, internally the company recognised it was ill-equipped to properly execute a multi-channel strategy, and its ongoing technology overhaul provided the answer. Thesing engaged the assistance of one of its existing suppliers, Triquestra, to expand the retail management system it already used in order to link Pumpkin Patch’s core offline pricing and promotions database with its webstore databases.
The e-commerce databases span five countries and currencies and Thesing says the company is now looking to launch offers to customers in different geographical markets.
“We constantly challenge ourselves to ask what is different in the online game,” Thesing says. “There are differences, but actually delivering the technology, having a centralised approach with pricing, for example, really helps. It doesn’t matter where the price is going to be fed to, whether it is a POS or an online solution. If we have a hub that is managed centrally and it looks the same, that is wonderful for us.”
The arguments that retailers struggle with to implement ambitious online retailing strategies seem, to the outside world, like no-brainers.
Access to a potential global market of new customers, a reduced need for expensive city centre retail space and a smaller sales team are all compelling factors.
However, it hasn’t always turned out well. Local players like David Jones and Gowings pumped millions of dollars into internet retail efforts, but the hopes of an end to long Saturday queues in crowded stores disappeared as retailers shut their online ventures. David Jones closed its initial online shopping experiment in 2003 after writing off debts that were in the range of $11 million to $15 million. Thesing says the secret of a successful marriage of online and offline retail is in a centralised management model and a company strategy that views online and offline as linked but ultimately separate channels.
The online or ‘direct’ channel at Pumpkin Patch reports its financial results as part of the firm’s wholesale division. But Thesing says it is essential that the retail and online teams, together with the marketing department, work very closely to understand what is happening in the different channels.
“We do see online as an alternative channel and the business as a multi-channel brand, and find that the online business has different rules”, Thesing says.
“But we work very closely as a team at the back end and we have learned this over time.”
Thesing says many other retailers are just launching their brands online and are years behind in learning about the necessary cultural changes. She says Pumpkin Patch plans to continue incremental change to its strategy. While other retail brands like women’s fashion chain Sportsgirl have launched headlong into a social media strategy, Thesing says she prefers to wait. The next step in its web plan is for a less flashy replacement of its order management systems.
“Our dream is that our warehouse can be online with all of the orders that are flowing off the site,” she says. “They can manage their workflows, what staffing they have and they can order all of their work. There is a lot of hot air that comes out of people who think they can just click their fingers and simply solve things with new technology. It is not so easy – the direct fulfilment game is a lot harder than a lot of retailers have had to deal with”, she says.
