Abc Clothes Case Study

TABLE OF CONTENTS

1. Introduction 3

2. Statement of Opportunity 3

3. Goals of the New System 4

4. Alternatives Considered and Solution Selected 6

5. Details Concerning the Solution 6

6. Implementation 7

7. Cost Benefits 8

8. Conclusion 11

1. Introduction

ABC Clothes was established in 2004 as a simple storefront in Syracuse, NY. For the first two years the business was successful, however ABC Clothes felt the effects of the crisis with the U.S economy by 2006. With the failing economy, the downtown area became less and less populated during the day. This put the company in a tough financial situation that essentially forced them to close their doors in 2007.

In early 2011, the owners of ABC Clothes decided reopen operations with new management and under a different premise. The brick and mortar storefront would be replaced as strictly an e-commerce company, with a rented a warehouse for clothing inventory. The e-commerce approach will allow ABC Clothes to drastically cut overhead costs such as utilities and rent on a storefront in the high priced downtown. The new warehouse will be located outside of town and while ABC Clothes will still have the expenses of rent and utilities, they will be drastically reduced. The warehouse space, in addition to housing inventory, will also office the support staff to maintain the e-commerce site, the physical servers, and the staff to send and receive clothing shipments.

2. Statement of Opportunity

With the new approach and business plan, ABC Clothes feels that it can expand past the local community to reach customers from all over the country and eventually internationally. While the limited customer base and external pressures lead to the eventual shut down of ABC Clothes in 2007, the potential of reaching more customers has added the possibility for sustainable long term business. The objectives of this business are to reduce costs by cutting unnecessary employment, and overhead costs. Online advertisement, mass emails and an aggressive effort to rank high in search results will enable ABC Clothes to reach many more people with a potential of 1 million customers by the end of year 5. By keeping the costs low, ABC Clothes will have a competitive advantage by reducing not only the advertising costs but also charging less for the products. In addition ABC Clothes plans on implementing an integrated supply chain management system that will give direct access to the vendor systems, and vice versa.

3. Goals of the New System

The goals for the new system are complicated, but ABC Clothes feels confident in accomplishing them successfully. First, they will have a fully-interactive website that will allow our customers to browse the products. In addition, after the customer becomes a member and logs in, they will be able to enter their measurements within their account, and as clothing is selected, the application will automatically suggest the size that best fits, on a model of a human that has the proper measurements. ABC Clothes has named this new technology the "virtual changing room". This will give the customer a better feel for what the clothing will look like when it is worn, which resolves a major concern people have when shopping for clothing online. In addition, the site will have reviews for each product, not only from the customers, but from ABC Clothes. The reviews will provide a real, honest review, not simply an attempt at selling the customer something. ABC Clothes' site will also contain an interactive page where the customer instant message with a customer service rep if they should have any questions. If ABC Clothes can assist the customer better by calling, there will be a button on each product page that will be similar to a button on a plane for a stewardess. When it is clicked, a pop-up will appear asking if the customer if they need assistance. Should the customer click yes, then the script will read the product that the question was about, the phone number associated with the account, and a customer service representative will immediately call to resolve the issue.

In order to accomplish this level of interactive experience, a large server farm will be required with multiple databases to house the information. ABC Clothes will create a secure database that houses all of the customer's personal information such as name, address, log-in info with military grade 256 bit encryption. The databases will also allow for organization based on each department, for example sports, women's, men's, and children's. The payment information will be set up within its own database in order to provide a greater amount of security. ABC Clothes will not link it to the other databases strictly by using a primary key, but they will use an encrypted daily feed to take the orders from the previous day and store them in an offline server. They will then use the primary key, being the customer number a person is given when they sign, to link up the credit card data to the purchases so they can identify who it belong to. This is a slower approach but will be a much more secure way of doing business, and will allow the customers to have great confidence in the ability to provide a safe online shopping experience. The phone system will also be integrated the online shopping system as it will allow the customer service reps to make calls to the appropriate customers as they click the assistance button.

4. Alternatives Considered and Solution Selected

The alternatives to the physical store were relocation of the business to a new physical location in a more populated area, a fully-interactive website or both. To have both, the costs would be considerable and we don't want to have another business fail because of not enough funding. The solution was to open a fully-interactive website only. To do this a website will have to be created, vendors will have to be located and contacted to order products from and start stocking the warehouse, and employees will need to be hired for shipment of orders, stocking the warehouse shelves, and customer service. Items that will