Finish Line Overhauls its Supply Chain and CRM Systems
Finish Line’s (Nasdaq: FINL) approximately $85 million CapEx investment is wisely being spent by the athletic and apparel retailer this year to capitalize on holiday in-store and e-commerce sales. The retailer plans to invest the money in its core systems to improve Customer Relationship Management (CRM), improve inventory management, accelerate fulfillment, and enhance merchandising capabilities. Finish Line was forced to rethink its CRM strategy to better compete with Amazon as well as its brick-and-mortar rivals. Plus, it suffered an e-commerce and CRM blunder last holiday season that it does not want to repeat. Soon after launching a new e-commerce platform last November, its web site was down for several hours at a time and suffered other problems. Because of the ensuing poor customer experience and lower-than-expected online conversion rates, the company suffered a loss of $3 million in its fiscal third quarter of 2012. However, Finish Line is beginning to turn things around, realizing a 6 percent hike in e-commerce sales for its second quarter of 2013. "Digital traffic continues to be robust, up 33 percent in the second quarter, fueled in part by strong gains in mobile traffic," CEO Glenn Lyon told analysts on a recent analyst call, RIS News reported. Part of Finish Line’s e-commerce turnaround can be attributed to the retailer’s partnership with Macy's. "We're continuing to expand our assortment of footwear on macys.com to attract more of their digital customers and drive our overall digital growth," Lyon said. Within a year or two, Finish Line will also have 450 shops within Macy’s stores, which further fuels the need for upgraded inventory management and fulfillment systems. Finish Line expects the Macy’s partnership to generate $250 million to $350 million in annual sales once the partnership is fully implemented. With part of its $85 million core systems upgrade, Finish Line is testing a new supply chain platform in its running specialty group this fall. The retailer will deploy the systems throughout the company in early 2014, if the pilot is successful. Taking a cue from other retailers, Finish Line also plans to upgrade handheld devices used by its store associates to "further enhance the customer experience and drive higher sales productivities," Lyon said.