COMMON WISDOM HAS IT that the 55-plus age group and the Internet are like apples and oranges — they don’t mix well. But it’s not necessarily so. Appleseed’s, a women’s apparel retailer based in Beverly, MA, is one of a handful of businesses to recognize the potential of the online marketplace for this group. The company’s bill of fare, consisting of practical sportswear, casual wear, special occasion and holiday fashions, and shoes and accessories, is available to shoppers via a paper catalog and an extensive and simple-to-use, although not highly interactive, Web site. This is consistent with the company’s operational philosophy, which is more service- than technology-oriented. Appleseed’s does business based on the assumption that while customers may enjoy the ease and convenience of Web shopping, they also want attentive service during and after the sale.
“Our customers tend to be very loyal, but to earn that loyalty you have to give them superior service,” says Kent A. Freshour, Appleseed’s vice president of inventory control. “Customer service, and by that I mean the real thing, seems to be an old-fashioned concept these days, but in our case we still work at it.”
A typical Appleseed’s customer is a woman aged 55 or above who needs clothing items designed for comfort as well as classic style. Appleseed’s offers product through three channels: two brick-and-mortar stores (and another two outlet stores), a mail-out catalog (two big catalogs are mailed twice each year in anticipation of peak seasons, followed by biweekly supplements), and the Web site (www.appleseeds.com). All are very shopper-friendly. As Freshour puts it, “service is Appleseed’s forte.”
Founded in 1946 as “Johnny Appleseed’s,” the privately held company has gone through several generations of ownership. In the 1990s, Appleseed’s expanded its chain of retail stores to 20 and changed its focus to attract a much younger customer. But instead of drawing new customers, the company alienated its core clientele and lost business. The stores, all of which were located within Appleseed’s traditional New England operating radius, were closed.
This hard lesson would have a happy outcome, however. Remembering its original niche strength, the company went back to basics. Today it exclusively serves the 55-plus customer, and is opening retail stores again.
ADDING VALUE Appleseed’s customer-centric strategy starts with the product itself. “First and foremost, we offer very good-quality merchandise at a reasonable price,” says Freshour. “All of our clothing items are designed to delight our customer and to fit her comfortably, and we absolutely guarantee satisfaction.”
Fit and quality are priorities one and two, Freshour says, and availability ranks a close third, which accounts for Appleseed’s focus on the hard-to-find. The company has a “no argument” return policy. If for any reason a piece of merchandise proves unsatisfactory, the customer can send it back weeks, or even months, post-purchase. Appleseed’s also offers in-house monogramming for around $5. The firm has recently launched a private-label credit card program, which is quickly gaining currency with clients, especially those who may be disinclined to part with their credit card numbers over the phone or by mail. Shoppers who already hold credit cards are encouraged to take advantage of first-purchase and birthday discounts and can accumulate points that earn them discounts on future purchases.
Every aspect of the Appleseed’s operation is tailored to its client base. For instance, the reps in the Appleseed’s call center answer within two or three rings. The customer service desk is always open. The firm’s CSRs are conversant with all aspects of the product line, and they are willing to spend a great deal of time helping customers find just the right thing.
SKIPPING FOR JOY Appleseed’s has been able to save significantly on outbound shipments using zone-skipping. This practice also allows the firm to ship to any U.S. destination within five days.
To manage its business, Appleseed’s uses the CW Direct program from CommercialWare in Natick, MA. While the application’s warehouse management module is not as robust as a canned WMS, it works well for Appleseed’s. The software can be customized: Appleseed’s owns the code for its system, and can change it or build peripherals around it. The company has just interfaced the system with a new reverse logistics function, so customers who wish to return merchandise can leave it on their doorstep for pick-up, instead of trekking to the nearest post office or shipping service.
MERGING CHANNELS According to Freshour, the majority of Appleseed’s orders are placed through the call center. “If the inventory is in stock, we ship the same day,” he says. “If not, the order goes out as soon as the stock becomes available. The whole process from order placement to shipping is managed by the CW Direct system.”
Appleseed’s does not employ sophisticated picking technologies such as pick-to-light or radio frequency. Instead, the CW Direct system prints a pick list and the picker is dispatched to collect the merchandise. Every SKU is stored in its unique bin, each of which is separated to avoid transposition. SKUs number 40,000, and each is designated with a unique number. A blue, size-12 sweater, for example, would be assigned a different SKU from that of a red one of the same size. This simple arrangement does away with confusion, Freshour says. The orders are also double-checked at the packing station for accuracy.
TWIN PEAKS Freshour notes that Christmas is not Appleseed’s biggest season, because gift items represent only a small portion of the company’s inventory. “We have two peaks in terms of inventory receipts, the beginning of the calendar year, then June and July,” he says. “We get many of our receipts at that time, and bottlenecks can sometimes be a problem.”
A cross-functional DC staff helps to clear the clogs, and the inventory control department takes advantage of split deliveries whenever possible. Forecasting tools such as the AS 400-based Galvin System from Galvin Associates in Marstons Mill, MA, also ease the inventory glut by anticipating when products will be needed during their lifecycles.
D. Douglas Graham is a freelance writer based in St. Louis, MO. He can be reached at firstname.lastname@example.org.
Appleseed’s new retail stores have become a vital part of the firm’s operation, says Kent Freshour, vice president of inventory control. “While most of our customers are willing to buy products via the Web or catalog, many also enjoy a traditional shopping experience. We want to keep their options open.” Research shows that the retail apparel marketplace for mature women is underrated. According to the U.S. Census Bureau and the National Center for Health Statistics, the number of Americans aged 65 or over topped 35 million in the year 2000, a figure then representing more than 12% of the population — and also the nation’s fastest-growing online audience. Nielsen/Net Ratings estimates that nearly 10 million members of this group were Web-surfing in 2002, and that many were purchasing as well. What were they buying? Books, plane tickets, travel packages, and car rentals most of the time, followed, less frequently, by apparel.
Annual store sales of clothing and accessories: $343 billion
Mail order: $83.5 billion
Online: $25.7 billion
Online as percentage of total sales: 23.5% (2001)
Imports: $61.2 billion (est. 2003)
Exports: $5.2 billion (est. 2003)
Sources: U.S. Department of Commerce, Apparel magazine