This article was published in the August 2016 issue of STORES Magazine.
Maybe one day a physiological researcher will do a dissertation on Canadian golfers. The country has 7 percent more left-handed golfers than the United States, according to the Professional Golfers Association — perhaps because hockey is the national sport.
“In hockey you’re taught to hit the puck from the left and the right, so for many a left-handed club probably feels more natural,” says Randy Peitsch of PGA Tour Superstore. “Regardless of why, these are facts we have to know to succeed in this industry.”
Peitsch is senior vice president of operations for the 26-unit chain, based in Roswell, Ga., and is well versed in the challenges of being a golf products retailer. The sport has taken a dip in popularity in the past decade, with about 25 million saying they had played a round in 2014 compared with 30 million in 2005, according to the National Golf Foundation.
It’s also a seasonal sport in most areas of the country, which can wreak havoc on inventory.
“It’s fantastic for us that golf is a year-round activity, but it varies,” Peitsch says. “At our stores in Palm Desert [Calif.] and Arizona, the big sales period starts in November and then winds down in April. In Chicago, November through April is relatively quiet except for the holidays, then it really picks up in spring through summer.”
Analytics over instinct
Much of Peitsch’s job is making sure each store has the right inventory: long-sleeved golf shirts and sweaters in stores during colder periods, short sleeves in warmer times — and of course, more left-handed clubs in areas where Canadian “snowbirds” journey during the winter.
Monitoring inventory and managing vendor shipments was a high-priority job for Peitsch’s staff; for several years they did it with a patchwork of enterprise programs and databases.
“We created a kind of homegrown system that worked, but it could get complicated,” he says. “We were working with some metrics and a lot of gut instinct. The result was that many times we were locked in with too much or too little inventory. It was fine for a while, but our needs changed.”
The company was having issues ramping up orders for various products on short notice. “A vendor might not know what we were going to need,” Peitsch says. “We would need 1,000 units shipped to some particular stores and they’d only be able to ship 600. We’d have to scramble to fill the rest before the shopping window for that item closed.”
Last year, the company began working with SPS Commerce to modernize its system and better integrate operations with suppliers.
“PGA Tour Superstore was having a common problem that affects many retailers,” says Peter Zaballos, senior vice president and chief marketing officer of SPS Commerce. “As a retailer grows or if they’re in a very competitive space, it’s not enough nowadays to … draw the analytics you need from a bunch of spreadsheets.”
The changes in consumer preferences during the past decade have created a need for retailers to bolster supply chain logistics.
The changes in consumer preferences during the past decade have created a need for retailers to bolster supply chain logistics. “You used to ask, ‘Do I have enough product in my inventory,’” Zaballos says. “Now it’s, ‘Do I have enough product and can I ship it to an individual’s location and other stores where it’s selling?’ The number of orders coming from individuals is growing exponentially.”
Many retailers have portals that connect to their suppliers; Zaballos says the issue is how suppliers decode the information they are receiving. A team from SPS Commerce spent time at the PGA Tour Superstore headquarters to get a sense of their needs.
“They did a lot of work making our systems compatible with theirs and trying to reach what we were looking for,” says Peitsch. “We told them we wanted clear end-user reports — lots of graphs and charts that show what we’re looking for so we’re not wasting time digging for it.”
The process was relatively quick, about two months from start to finish, and Peitsch says it was embraced by the company. “We were actually thirsting for this kind of information,” he says. “The SPS Commerce program is easy to customize, so whatever you’re looking for you’ve got a report to look at.”
Before, Peitsch says finding age-of-inventory reports could be an ordeal. “We didn’t have a great way to see it without several hours of data mining. Now, we’re able to get a report showing that in a few clicks.”
“There’s a real shift in the retail industry that we’re witnessing,” Zaballos says. “Every year we survey our retail customers about what their biggest priority is for the next 12 months. Until this year, the number one answer has been ‘Improving the in-store experience.’ This year, the top answer was ‘Growing e-commerce.’ I don’t see that answer being pushed out of the top spot anytime soon.”
Demand planning
“It’s critical in retail to see trends, and see those just as they’re developing,” Zaballos says. “If there are any old hands in the operation, they could give you the information about what sells and where and the inventory you need, but you’re going to be much more accurate with analytics and have less of a chance of stocking out.”
The foresight provided by the SPS Commerce program has reduced the need for rain checks. By sharing data with vendors, “we’ve all got the knowledge in May that these stores will need 1,000 Callaway golf balls in November, instead of us and them scrambling in the fall to fill the order,” Peitsch says. “The vendors can better anticipate our needs and be prepared for us.”
“We’ve all got the knowledge in May that stores will need 1,000 Callaway golf balls in November, instead of scrambling in the fall to fill the order.”
“One of the things we regularly talk about is demand planning,” says Zaballos. “Many of the problems you solve in demand planning become areas of opportunity in fulfillment performance. If there’s a sudden demand for a product and your vendor isn’t able to consistently shift and meet that demand, you’ve got to see how you can make their operations more responsive to your needs.”
Making information easily accessible across the organization is also critical; PGA Tour Superstore specified that they needed reports that could be opened anywhere.
“We can visit a store and with any web-enabled device, we can pull up reports,” Peitsch says. “We can walk the floor with store management and discuss how categories might be over- or under-performing and possibly see why since we’re in front of the display. We’re getting information in real time and can make immediate decisions.”
Peitsch believes this kind of enterprise-wide transparency of the product supply chain makes his company stronger. “With the multi-channel industry we’re in now, this can only help us address customer needs. We need to be on top of how our customers experience our stores, whether that’s when they visit or online.”