Kathmandu climbs to new heights With Pronto

Published on the 24/03/2009 | Written by Velocity Global Ltd

velocity_kathmandu
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AT A GLANCE

  • Kathmandu

INDUSTRY

  • Retail

BUSINESS OBJECTIVE

  • Upgrade company’s systems to cope with fast growth of its retail network in three countries; system also had to be scalable enough to handle further growth.

SOLUTION

  • Pronto Software’s integrated Enterprise Management System – point-of-sale, promotion management and inventory management, plus some financial features, such as accounts receivable.

THE BENEFITS

  • Greater pricing flexibility, better-targeted marketing and improved return on investment; more streamlined reporting, providing greater visibility of individual store performance and the business overall. Major operational efficiencies have been achieved through process automation, such as refining pricing management, which releases staff to focus on other parts of the business. There have also been significant cost savings as a result of shifting over to Pronto’s hosted services.

FOR MORE INFORMATION

Velocity Global Ltd
W: www.velocityglobal.co.nz

New Zealand
E: chris.morris@velocityglobal.co.nz
T: +64 9 358 4445

Pronto-Xi has helped the rugged outdoor equipment and clothing company in its retail expansion into three countries...

Kathmandu’s story began over 20 years ago with a sewing machine in the back room of a medical student’s flat. The hard-worked machine was used to run up outdoor clothing and equipment for family and friends –and led to a dream of outdoor adventure escape.

The medical studies were left behind as the passion for climbing took over. Mountaineering expeditions revealed that the equipment and clothing available at the time badly needed an upgrade. Kathmandu was born from this realisation. The quality, functional design and rugged performance of the company’s products have seen it grow exponentially since those early days. It now has stores in Australia, New Zealand and the United Kingdom. It even has two headquarters, one in Christchurch and one in Melbourne, which also has a distribution centre.

Strong growth
The adventure clothing company has been growing strongly since 2006, expanding its retail network in the three countries. In the process, it expanded to the point where it badly needed a new ERP system.

“Basically, we had outgrown our current system,” explains Bryan Moore, general manager of information technology. “It lacked the functionality to help us further grow the business. There were shortfalls in our point-of-sale system and promotion management, and, combined with an overall lack of integration, it was time to consider a more scalable, robust solution.”

“It was absolutely mandatory that we have scalability and stability in terms of product and the company. We needed to be confident the product could scale up to our growth plans and continue to support us.”

A customer recommended Pronto Software and, in March 2007, after looking at a number of options, Kathmandu chose Pronto to overhaul its point of sale systems as well as some of its back-office operations. It installed Pronto-Xi’s point of sale, promotion management and inventory management modules, and some financial features too, such as accounts receivable.

“We chose Pronto because of its scalability and because of Pronto’s market position,” says Moore.

“Linked to this was company culture. There were a lot of synergies in the way we both operated in that we both tend to roll up our sleeves and get on with it.”

The first store went live with Pronto-Xi in August, then, just four months later the new system had been rolled out across Kathmandu’s entire retail network. Upfront planning ensured smooth implementation at each store, says Moore.

On-demand delivery
Kathmandu also deployed Pronto Hosted Services, the software company’s on-demand SaaS service. Moore believes Kathmandu has saved more than $250,000 by not having to ‘up spec’ and house the server internally. And this doesn’t include the extra costs that would have been incurred attracting and training suitably qualified support staff.

“It made sense to leave it to the experts,” says Moore. “It meant we could keep our costs down, ensure our environment was stable, with less risk, and not worry about downtime or maintenance issues.”

Visibility
The benefits to Kathmandu of deploying Pronto-Xi include greater pricing flexibility, better-targeted marketing and improved return on investment.

“The underlying foundation provided by Pronto will give us greater visibility to analyse trading patterns and tailor promotions based on seasonal changes, store locations and customer demographics,” explains Moore.

For example, we’ll be able to quickly ramp-up for a sale of heavy jackets in cooler-climate stores, such as Hobart, at the end of winter, and do a specific promotion for hiking boots during summer in Queenstown.” Reporting has been streamlined and the company now has greater visibility of individual store performances as well as the business overall.

“It now takes a fraction of the time to put together a performance snapshot of each store, so it has significantly improved the way we provide performance feedback to the business,” says Moore.

The retailer has also achieved major operational efficiencies through process automation, such as refining Kathmandu’s pricing management. This has released staff to focus on other parts of the business.

“We’re no longer distributing pricing schedules across 52 separate environments. Now we’re doing it once and doing it right. From an ROI point of view we’re getting a good bang for our buck. We’re doing things smarter and better,” says Moore.

He adds that Pronto’s implementation was highly professional and completed on schedule. “The overall value that Pronto brings is the ability to support Kathmandu by ensuring a high level of application.”

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