STORES Magazine - February 2008 - (Page 54) NUTS AND BOLTS / SUPPLY CHAIN Inventory Traffic Control Plan Takes Off Planning and replenishment system helps boost airport retailer’s on-hand rate BY LEN LEWIS now has been falling on Salt Lake City International Airport for several hours, and the long-term forecast is bleak. Icy conditions have closed one runway, several carriers have canceled flights — and stores are running low on embroidered red wool ladies’ jackets and turkey sandwiches. S ATG out-of-stocks It’s just another day for Chan Crismon, vice president of technical operations and store development for Air Terminal Gifts. “We’re in a different situation than mainstream retailers in that we have to react to change very quickly,” he says. “If Delta moves its Atlanta flight to a different concourse, we have to make sure we can meet the needs of the 200 plus people on that aircraft immediately.” In business since 1961, Air Terminal Gifts (ATG) operates six store formats at one of the nation’s busiest airports — a highly challenging retail environment where the number of passengers, layover/delay times and competition for commercial space has spiraled over the years. For Crismon, this means balancing aggressive merchandising with tight controls over inventory and the supply chain. To accomplish this, ATG has established a longterm relationship with Salt Lake City-based Tomax for inventory management, merchandise planning, operations and replenishment systems. “Their ability as a small retailer to adopt advanced solutions is very impressive,” says Joanna Kennedy, senior marketing analyst for Tomax. “By having us manage applications and data, they can focus on their core retail business.” ATG’s stores, including Your Planet, Zeta & Company, West of Brooklyn, Vistas, Crismon’s News & Views and On the Fly, carry as many as 30,000 active SKUs, and the 54 STORES / FEBRUARY 2008 down 15-20% inventory system has enabled the company to reduce out-ofstocks 15 to 20 percent. “Retail is hard enough, but even harder at an airport. Considering the limited shelf space, you really have to get things right,” Kennedy says, noting that the stores are able to forecast 52 weeks out and even account for conventions and other events likely to bring heavier-than-usual traffic. Keeping up with TSA But some things simply can’t be forecast. When the Transportation Security Administration places restrictions on what can be brought on board an aircraft, “the airport and the TSA do a pretty good job of notifying us of items they don’t want us to sell anymore,” Crismon says. “We had to take a lot of things off the shelf because of new regulations.” By working with Tomax, ATG has the ability to do more with less. A new replenishment ordering system allowed the company to reduce purchasing staff, even as sales increased 10 to 15 percent. “The reordering system was tough for us to get through,” Crismon says. “We were never big on trying new things, but WWW.STORES.ORG http://WWW.STORES.ORG
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.