Premium Essay

Clothes R Us

In: Business and Management

Submitted By vadbodza
Words 937
Pages 4
Corvinus University of Budapest

Marketing Department

Clothes ‘R’ Us

Point-of-Sale Initiative

[pic]

Duzsek Réka, oso9ef

MSc Marketing

Consumer Relationship Management

Course leader: Agárdi Irma

November 28, 2012

Clothes ‘R’ Us was a leading apparel store in the United States with more than four hundred national stores. They offered hip, but affordable clothing for men, women and children. Between 1990 and 1997 the company had great financial growth, but this revenue growth began to slow down in 1998. By 2000, Clothes ‘R’ Us had over-expanded and had the worst gross margins in the industry. In 2001 to reduce costs and regain its competitiveness they started to analyze the problems within the company. They closed unprofitable shops and opened new, profitable ones. To restructure the whole back-office process they wanted to introduce a new POS and credit system in every retail stores.

1. How does the POS Initiative fit into the strategy of Clothes 'R' Us?

The strategy of Clothes ‘R’ Us was to increase the revenues and to stop the declines and the POS system was an important point of this strategy.

The goal of the POS system was to free up the store manager’s time, to get him work in the store, instead of the back office. This reduces costs and helps the useful allocation of the human resources. The workflow study, mentioned in the case, showed that this could reduce the store manager’s time spent in the office from 6 hours to 1,5-2 hours.

The system had other cost-cutting functions like decreasing operating costs and long-distance phone costs, increasing operating efficiencies and store sales due to improved customer interaction and service. For example, reduction of one store sales associate alone would deliver $20,000 per year in salary and benefits, and the new…...

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