Overview

Cheap Joe’s Art Stuff, a multi-channel retailer selling fine art supplies, wanted “good reliable data that would enable us to make a better profit”. With over 15,000 product offerings knowing where to focus efforts to improve inventory positions and product profitability was an increasingly complicated task. Lots of data was locked in production databases but breaking out that information into something meaningful that pointed out where to achieve the best financial impact was a struggle.

Manage Metrix helped them achieve this by identifying inventory issues, marketing campaigns effectiveness, and ensuring the products they were offering were what the customers wanted.

Background

Cheap Joe’s Art Stuff is a success story about a business that started as a hobby. Joe Miller started his career as a pharmacist in Boone, NC. For years, he thought he could be an artist. So, in the mid-eighties, he bought a cheap set of paints and paper, and to his surprise, he wasn’t an instant artist. He took up art lessons with a professor who told him to get good paints and supplies. Not having fine art supplies in his town, he drove almost 100 miles and spent over $600 to get what he needed. He discovered that having the good stuff was worthwhile; it encouraged him to pursue his craft. A few years later, he lined up some fine art suppliers and put their products on the shelf in the pharmacy with a sign that said “Cheap Joe’s Art Stuff.” He included the Water Color society of North Carolina on a mailer for art supplies and his products began to sell out. Soon, the art supplies outgrew the pharmacy space and they moved into a location of their own. Four years later, they needed to move to an even larger space and before they knew it, they were adding on an additional 20,000 s.f. Today, with 2 retail locations and a booming online and catalog business, Cheap Joe’s Art Stuff has customers from all over the United States and Canada.

Of course, this kind of growth requires a lot more than the old days when Joe was ordering products for the drug store shelf. With a commitment to customer service and a dedicated clientele and the 15,000 fine art products, Cheap Joe’s requires smooth and reliable inventory management, a solid way to track its marketing campaigns, and the ability to truly analyze the merchandise it offers.

Luckily, they had a relationship with an order taking software and warehouse distribution center who was working with a consultant for their own business. As chance would have it, that consultant was F. Curtis Barry & Company, the partner with Taurus Software who had designed and developed Manage Metrix. Knowing their business contact had a good rapport with F. Curtis Barry & Co., Cheap Joe’s trusted their recommendation to give Manage Metrix a test drive to see if they could get what their company needed.

Situation

With over 15,000 product offerings, many of them specialized, it can be easy to get bogged down in day-to-day operations and production. Tracking inventory positions, calculating turns, analyzing carrying costs compared to inventory values, keeping on top of fill rates and running effective marketing campaigns all while ensuring the merchandise offered is making a profit means numbers everywhere.

Breaking down these numbers into something meaningful and being able to focus on the real issues was an increasingly complicated task. “We were floundering at getting current information,” said Mike Roberts, CFO, “I’m not a programmer, I’m a numbers guy. I didn’t have the time or inclination to figure out how to get the information we needed that would truly reflect our positions. I wanted good reliable data that would enable us to better focus and make a better profit.”

Solutions

Cheap Joe’s implemented the Inventory, and Merchandising analytics and is soon to go live with Marketing in a three phase approach. This enabled them to take the time to understand concepts for specific business areas and to focus on how improved business intelligence in each area would work best for them. Building on one functional area at a time, they recognized how each integrated with the other to provide them with the data and knowledge they had been looking for.

Inventory

With the visual presentations and supporting details available for Inventory, they were immediately impressed with the power and intuitiveness of the program. “Before Manage Metrix,” said Roberts, “we were basically using a report writer program. It had its purpose and place. But now, that big broad scope can be driven down to the very specifics. We couldn’t believe how easy it was to use and find the information you needed when you needed it.”

The ability to use the key performance indicators to receive summary information and then narrow down each element of that information to closely analyze product categories, age, excess, backorders, costs and turn rates fit the bill for what they wanted. And, their new-found knowledge helped them optimize, understand and act upon their inventory positions and decisions.

Roberts recalls a situation where they recognized that the fill rate for equipment was very low. They started digging deep using Manage Metrix, and discovered that they were having a challenge with drop ships. “Finding this out allowed us to immediately refocus how we were handling drop ships and working with our vendors.” The ability to track and improve fill rates allows the company to further improve internal efficiency and customer satisfaction.

Merchandising

Having a huge product offering and a desire to stay on top of industry trends does not always speak best for the bottom line. It was difficult to completely evaluate what were the product winners, what to do about the losers and discover the attributes of a profitable product mix.

Using Manage Metrix analytics and consulting guidance for Merchandising, Cheap Joe’s was able to base many of their product offerings on results and facts – not just what they liked or what they thought their customers wanted. With clear and easily obtainable facts, they could analyze the performance of their vendors by extracting information on returns, demand and delivery. The ability to see net profitability for each individual product with all costs considered (such as marketing expense, general and administrative costs and fulfillment costs), helped them better understand their profitability and product mix.

Best of all, by understanding their merchandising and synchronizing that information with the impact of marketing and inventory, they are better able to streamline their processes and plans. This 360 view of how their business operates allows them to focus on the issues, make adjustments at the moment they need to be made, and plan for the future right now.

Conclusion

The ability to identify an issue and chip away at it using current and readily available data “helps us order better, get more control of the inventory, reduce back orders, be more responsive to trends and provide overall better customer service,” says Roberts. All that combined should also make Cheap Joe’s more profitable.

As with any kind of change, initially, Roberts wasn’t excited about trying yet one more “solution.” Yet, once he saw the potential, he was extremely pleased. “You never know until you try it,” he said. “If you have more than one focus for revenue, it can be extremely hard to break those out— Manage Metrix allows you to do it.”

Just as Joe Miller learned that quality art products improved his artistic efforts, Cheap Joe’s is using Manage Metrix to improve business efforts.

About Taurus Software

At Taurus Software, making data liquid means helping turn data into business intelligence, smart decisions, and competitive advantages – the lifeblood of your company. Taurus products include a variety of applications developed to help clients get more from their data by allowing them to Move, Map, Measure, and Manage data regardless of where it resides within business systems. To learn more about Taurus Software or products designed for other data platforms and applications, call 650-482-2022 ext. 150, or visit www.taurus.com.

About F. Curtis Barry & Co.

F. Curtis Barry & Company is a consultancy specializing in multichannel operations and fulfillment for catalog, e-commerce, and retail businesses. F. Curtis Barry & Company offer clients expertise in direct commerce systems (order management, warehouse management, and inventory management systems); warehousing and distribution; call center; inventory management and forecasting; and strategic, financial, and operational planning for all business channels. To learn more about F. Curtis Barry & Company, visit our web site at www.fcbco.com.