American Apparel's E-Commerce Upgrade Benefits Bricks-and-mortar, Too

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American Apparel's E-Commerce Upgrade Benefits Bricks-and-mortar, Too

By Jessica Binns, Contributing Editor - 02/19/2013
Known as much for the antics of its controversial founder and CEO Dov Charney, cheeky brand image, and suggestive advertising as it is for its made-in-Los-Angeles basics, American Apparel always manages to be a newsmaker. Now, with a major e-commerce upgrade yielding big results and enabling innovative functionalities, it's making headlines yet again.

The company's website, AmericanApparel.net, had outgrown its previous e-commerce platform as its young hipster and urbanite customers embraced online shopping. Stacey Shulman, the CIO for American Apparel, says, "We want the in-store experience to mimic the online shopping experience, and vice versa." In searching for a suitable new platform, Shulman says her team prioritized stability and scalability.

"We should be able to quadruple the web business without the site crashing," explains Shulman. "We believe our website will be a $150-million business, and we should be there quickly."

American Apparel's other main focus, according to Shulman, was creating a personalized online shopping experience. "We aim to become more customer-centric," she says. "We didn't set up our system in way to maximize on serving customers. The customer shouldn't care what channel they're shopping in — channel is our issue, not theirs. We need to enable seamless shopping across channels, and hand off shopping between channels, from store to web, phone to web."

The basics retailer found its solution in Oracle's ATG Web Commerce platform, which Shulman describes as consistently reliable in terms of scalability and stability. What's more, "Oracle is innovating around personalization," adds Shulman.

American Apparel operates 15 country-specific e-commerce sites that weren't united on a single platform. "We're still perfecting integration — we couldn't migrate all systems immediately," Shulman explains. To ensure a smooth transition, the company is migrating one country at a time to Oracle in a controlled rollout.

"The secret sauce is integration," Shulman says of the e-commerce implementation. "There's a myth that disparate systems don't play well together." The ATG platform is fully integrated with American Apparel's ERP and POS systems.

In the first phase of implementation, which took three months, the company launched its U.S. web store. But as the busy holiday shopping season was approaching, the retailer held off on making further changes until January 2013, with the full technology rollout expected to be completed two months later in March. But once the platform is securely in place, Shulman's team will focus on the more innovative end of the project: redesigning the shopping experience. "We will be tying it into mobile with our iPhone app," she adds.

"In store, people gather things they want to try on and they sort it out in the fitting room socially with friends — what things you want and don't want — and then you make the decision," explains Shulman. "Sometimes you decide, ‘I want that item' but you want to wait to purchase it. You may want to decide later. When you do that online, you build a wishlist, but the web store doesn't support that very well. The redesign will support that better: gather, support, decide."

American Apparel plans to take the best features of web shopping — such as rich data, comments, ratings and reviews — and bring that into the physical store experience by pushing that kind of content to a shopper's mobile device. The brand currently develops for the iPhone but plans to support other mobile operating systems soon.

Shulman says that with the ATG platform in place, American Apparel's operations team has an easier time with merchandising and creating advanced promotions. The biggest change, however, will come when it implements the platform's enhanced search functionality, which can change the look and feel of the website based on a user's search and interests.

Happy holidays
With the new platform in place for the critical Black Friday and Cyber Monday shopping days, Shulman says sales on the site were up 125 percent over the previous year. "We ran the same promos as last year," she adds. "We did no additional promotions or marketing — nothing different, except the technology."

Cyber Monday brought 20 times greater traffic than AmericanApparel.net had ever previously managed or been able to track. Shulman says that after shoppers complained on Facebook about the slow site speed, her team was able to scale out the infrastructure in just four hours by adding 16 servers, which resolved all performance issues. The company uses virtualized servers; it had virtualized its environment just prior to the Oracle implementation after its old system had crashed.

"We built our systems to handle four times the highest traffic we'd ever had," explains Shulman. "We had servers on stand-by to give us an additional 50 percent capacity. We put three servers aside, in case we missed the mark on anticipating demand, but those three were inundated in traffic in under five minutes. We had to scramble, but it's a good problem to have."

Because Cyber Monday business was so good, the company extended the sale, and the next day itself outperformed Cyber Monday 2011 by about 25 percent, which Shulman chalks up to "pure technology — and some luck."

American Apparel took down some of those additional 16 servers after the holiday shopping rush but Shulman expects to see higher web traffic over the long term. "This set the new high bar," she says. "That's what we want to start operating at regularly."

Since going live, the online business has been trending up 40 percent overall. "We think it comes down to performance and site speed," explains Shulman. "Our conversions are up. We're trying to put our finger on it. No one in our finance team quite believes us, either."

Innovation up its sleeve
American Apparel plans to unveil a new customer loyalty program when it fully launches the new site, offering exclusive access to its most loyal customers. The company also is improving its B2B process for wholesalers and distributors to better support its business customers. Shulman says her team is working on a two-year roadmap but leaving room in the timeline for "quick turn innovation."

One of its most important innovations is its partnership with Qualcomm, which enables image recognition when a mobile-equipped customer scans in-store signage. Once the image is recognized, information about that product is pushed to the shopper, a functionality that essentially "turns each in-store sign into a shoppable web page," explains Shulman. Her team is building on that capability by adding bar code scanning and enabling "silent sales," which allow a specific user to see special in-store product prices via her mobile device. In addition to offering promotional hunts and prizes, American Apparel is creating a way for consumers to use any payment method, such as credit cards and gift cards, stored in their online account for bricks-and-mortar purchases, thus conducting and completing transactions "without taking out their wallets," Shulman adds.

"With the iPhone app, a shopper can ask for assistance or different sizes in the fitting room," she says. "She can complete the whole transaction with just her phone. That's the long view, what we're moving toward."

Jessica Binns is a Washington, D.C.-based freelance contributing editor and former associate editor for Apparel magazine.