American Textile Company Sews Up a Competitive Edge with Velocity ®

With Velocity, American Textile has achieved sales increases as high as 116%.

The Uncommon Threads of POS Data

American Textile Company (ATC), the leading manufacturer and distributor of protective bedding products in the U.S., counts the nation’s largest “super” retailers (and thousands of stores) among its many customers. With a broad product line, the company needs fast, accurate point-of-sale (POS) data from its entire customer base.

Timely POS data, in easy-to-use report formats, is needed by sales and manufacturing to:

- track and analyze product movement,
- develop sales trends,
- identify slow-moving items,
- suggest improvements in product mix, inventory levels and turns,
- increase sell rates and
- improve forecasting and planning.

In fact, while dependable POS data is crucial to much of ATC’s sales and manufacturing process, until 2001, several barriers had prevented the company from collecting, managing and using the data efficiently.

First, the company was dependent upon its retail customers to supply POS information. Second, the company had no way of combining store-level data into customer-level data. Third, huge volumes of information coming in from a variety of sources had to be “cleansed”, normalized and woven into an organization-wide data base. Finally, the whole process had to be fast, easy and affordable.

The Best POSsible Solution

Where could a solution be found that would address all of ATC’s concerns? The company began by looking into a number of solutions, such as the following:

• Custom BI software solution required a higher, broader level of EDI, data warehousing and retailer experience and expertise than was readily available.

• Off-the-shelf, spreadsheet-based EDI POS applications, while affordable, were cumbersome and deemed too difficult to implement across the company.

• Web-based service bureaus seemed to offer a few common features but were cost-prohibitive, both during implementation and in ongoing operations, and did not comply with retailer’s confidentiality requirements.

After thorough analysis, ATC selected Velocity, an out-of-the-box software suite from Vendor Managed Technologies (VMT). Designed specifically to collect, normalize, manage, and report on retailer-supplied POS data, Velocity offered all the capabilities ATC was looking for and more, at a price they could afford. As ATC would quickly discover, choosing Velocity paid off in ways they hadn’t even imagined.

Smarter Selling

With Velocity, ATC has been able to shift its focus from reactive to proactive selling. Timely, accurate forecasting and tracking tools have opened new windows of opportunity for selling. More importantly, they have given the company valid, actionable reasons to stay in touch with their customers’ buyers and planners. There are no more calls to buyers for information; instead, ATC is the information resource on which buyers and planners depend. Universally, ATC’s customers have been impressed with the richness of their POS information, the quality of their analyses and the accuracy of their sales forecasting plans.

Before meeting with any buyer, ATC’s sales department generates

a set of Velocity reports which detail their products’ POS activity and in-stock/out-of-stock conditions and sell-through results. This has enabled ATC to help its customers better manage their rate of sell, inventory levels and turns.

Stronger Customer Relationships

The ability to manage, analyze and improve retail customers’ sell-through has given American Textile greater insight into consumer trends. Coupled with full access to store-level or territory-level information, this has enabled the sales team to be the ‘go-to’ source for sales reporting. By identifying each store’s high turn items, as well as its slow moving products, and as a result, recommending needed changes in the product mix or inventory levels, ATC helps themselves and their customers.

Many buyers consider ATC’s Velocity information to be “better than their own”; and, in at least one buyer’s opinion, ATC’s POS reporting, monitoring and forecasting capabilities are “light years ahead of the competition”.

While these capabilities help build sales and profitability both for the retailer and for ATC, they are also helping to build stronger, more loyal customer relationships. In a highly competitive market, ATC sees that as an invaluable strategic advantage.

Improved Forecasting and Planning

For years, ATC had based its forecasts solely on shipments with adjustments here and there for gut instinct and guesstimates. No one was surprised that the results lacked accuracy.

Velocity has changed all that. Today, ATC is able to see exactly what is occurring at retail. A store-level perspective on every product, in every part of the country gives ATC real insight into where products are sitting, what products are selling, and how that impacts order patterns. This has led to overnight improvements in the accuracy of sales forecasting.

With more dependable forecasts, actual shipment data and Velocity POS information in one universal database, ATC has been able to develop a continuous, overall picture of product movement, from

start to cart. This has been a real eye opener for the company, particularly in the way it has impacted the efficiency of manufacturing planning. ATC is also enjoying greater control over what product actually gets shipped to each retailer. Using Velocity data to increase or decrease the flow of goods to each store, the company has been able to drastically reduce end-of-season markdowns and returns while maintaining or even improving their rate of sale.

Masterful Merchandising

Velocity has given ATC the ability to track the performance of promotional items, new products, and merchandising changes where it matters most: at the store level. They can now slice and dice POS data at any level (store, distribution center, chain or across all customers) which has already proven helpful in new product rollouts and tests.

For analysis and reporting, they can look at actual sales data based on attributes such as region, state, household type, race, horticultural zone, market, etc. In addition, attributes can be grouped based on any defined criteria, such as brand, category, style, color, size and more.

Best Practices Cuts to a Better Bottom Line

Velocity has been more than a software solution for ATC. They are quick to credit Velocity with increased sales to existing accounts. Beyond this very tangible return on investment, ATC now has the information power and leverage it needs to:

• build stronger customer relationships,
• identify and capitalize on actionable opportunities,
• improve retailers’ sell through,
• efficiently manage inventories,
• understand consumer buying patterns; and
• produce more accurate forecasts.

With experience, knowledge and “best practices” methodology built right into the software, Velocity has given ATC a new, forward-thinking perspective on the way they approach their customers and their business. They have found more than the information they need to run their business; they have found the information their customers need to run theirs. And at the end of the day, that means a better bottom line for both.

What American Textile Likes Most about Velocity

• Data can be collected and tracked by UPC, store, fiscal year, geography or product categories.
• Customer classifications allow ATC to group stores into categories based on such retailer attributes as DC, store type, district, etc.
• Easy-to-use interface means that no additional business intelligence tools are needed so all levels of users are not intimidated by the tool.
• “Canned” and ad hoc reports can be created easily by all users, reducing dependence on the company’s IT department while providing virtually limitless reporting capability.
• Security levels, determined on a user basis, protect data and help ensure data integrity.
• VMT maintains and provides all current EDI mappings.
• All 852 EDI transaction files are accepted into the system as is, without any preliminary translation or manipulation.
• Velocity is streamlined for retail analysis which showed in the short time to value.

“We’ve been using Velocity for less than a year, and our retailer relationships have never been better. Orders are up, returns are down and forecasting accuracy is right on track.”

 - Vice President, Information Technology, American Textile