The Buckle Takes on Its Largest IT Project Ever
Do you know The Buckle? It’s not a flashy, jump-on-the-shiny-new-bauble of the moment sort of company, either in its consumer-facing branding or corporate culture. It’s a solid, measured, steady company. Practical. It has zero debt and $239 million in cash on hand. A buckle holds up your pants, for goodness’ sake. The Buckle is based in Kearney (pronounced “carney”), Nebraska, land of steer and grain, midwestern heartiness, self-reliance. (Also, as I recently learned, the stopping-over point for the sandhill crane population — that’s about 400,000 to 600,000 cranes, or 80 percent of all the cranes on the planet — as they head to their arctic nesting grounds. First, they fatten up on the waste grain in the area’s empty cornfields.)
Quietly, the specialty retailer has grown over its 50-year history to more than 450 U.S.-based stores in 44 states, selling casual apparel, footwear, and accessories for fashion-conscious young men and women, with its roots and focus on denim. Going back many years, The Buckle has held a steady position at the top of Apparel’s Top 50, which ranks public apparel companies by profitability.
The Buckle has a growing online presence, but approximately 90 percent of its sales are still posted through in-store POS, says Kevan Gray, lead technical project manager. “In store is important to us as a culture and a brand.” Many of its customers value the free alterations that The Buckle provides, as well as its layaway program. Generally speaking, “our associates will do almost anything for anybody,” he says. That’s just the culture. It’s a place that keeps customers coming back and keeps associates from leaving.
“People generally join and stay,” says Brandon Hauff, lead technical business analyst. “Our store managers typically stay at least 15 years.” Although it’s a centrally operated business, it has an entrepreneurial spirit, allowing store managers to use their discretion in making decisions that will provide the highest satisfaction to their guests.
Taking a slight shift away from home-grown solutions
It shouldn’t surprise you, then, that this sort of company would have relied on itself to build out the IT systems it needed. For its size, The Buckle has an extensive IT division — more than 120 people — who have built and maintained its systems from day one. “IT is at the heart of the business,” says Hauff. The company has a strong development and engineering culture, including roughly 60 engineers working in agile development, and its own in-house security consultancy.
But the scope of technology and IT have changed in recent years, as have the requirements to maintain them. Why, just recently, The Buckle spent two years getting all of its payment providers certified for EMV. That’s very time consuming, says Rob Harbols, vice president of IT.
“Our team often builds solutions that are better suited to our business than what is available on the market, but we’ve reached a point where building and upgrading some systems ourselves unnecessarily consumes time we’d like to devote to more innovative and differentiating efforts,” he says. The company decided it was time to shift away from some of its home-grown solutions to embrace an off-the-shelf system for some core functionality, even if that meant sacrificing some of the company-specific customizations it preferred.
With a commercial system to handle areas such as customer relationship management (CRM) and point of sale (POS), The Buckle realized it could shift its team’s focus toward more innovative areas that the market didn’t service but where it differentiated itself among its customers, such as its layaway and loyalty programs.
One of its other objectives? It wanted to improve resilience by reducing single points of failure. “There are places where only one person knows how something is built. It makes it difficult for that person to leave or go on vacation,” said Hauff.
So, two and a half years ago, a search began. The company wanted a tech vendor that offered both a product that met its needs and people who would provide ongoing support. It also sought a culture that jived with its own.
Technology for an improved retail experience
Its search led the company to Aptos. The Buckle began implementation with the tech provider two years ago, launching its CRM and audit & operations management (AOM) solutions in June 2018, followed by its POS solution just prior to the 2018 holiday season. The new POS system is far more intuitive and has an easier learning curve, allowing new teammates (sales associates) to get up to speed quickly in helping guests (customers).
“This is the largest implementation in the company to date,” says Hauff. It included at least 15 people exclusively dedicated to the Aptos project, dozens of shared resources and multiple partners including Aydept, RIBA Retail Data Integration and Capstone Integrated Solutions. The Buckle was in constant contact with Aptos and the two companies had an open and ongoing dialogue about needs and expectations.
“Just about every part of the business was affected by this,” said Gray. “There were 17 companies involved in our implementation of Aptos and about 55,000 man hours involved,” he said. “It’s the largest project we’ve taken on, and it’s been a success,” he said. “We targeted a June 2018 pilot and we came in on time and under budget.”
Six months ago, just before the start of the holiday season, The Buckle began implementation of the Aptos enterprise order management (EOM) solution, as it works to continually improve the technology behind its omnichannel offerings.
Fun facts: What The Buckle is learning from its new CRM
Up until now, The Buckle did not have a lot of expertise with customer-level data. “There were a lot of assumptions, but not a lot of customer facts,” says Chadd Bragg, senior digital retention marketing manager. So, with its new CRM module to work with, Bragg began digging into the data.
He’s uncovered a lot of information in not a lot of time, and he recently shared 25 of those findings, at Aptos’ Engage conference, which he uncovered by sifting through the CRM data. Some of those include:
1. There are 4.75 million active unique The Buckle customers.
2. The top 10 percent of customers (470K) were responsible for 42 percent of net sales over the most recent 24 months.
3. The bottom 50 percent of customers (2.3 million) were responsible for 14.5 percent of net sales over the most recent 24 months.
4. The top 10 percent of customers purchased at a 14x higher rate and had net sales at a 22x higher rate than the average customer in the bottom 50 percent.
5. 91.2 percent of all customers are retail store-only shoppers.
6. 2.3 percent of all customers are e-comm only shoppers.
7. 6.5 percent of all customers are multi-channel shoppers.
8. Multichannel customers are worth 3x-5x more than customers that only purchase in one channel.
9. 61 percent of multichannel customer net sales are executed through the retail channel.
10. Multichannel customers are worth 1.5x more than a 100-percent pure-channel customer.
11. Customers that have purchased denim in the past 12 months purchased 3.5x more than a guest that did not purchase denim.
12. There were still over one million ‘top’ and ‘middle’ guests that have not bought denim, ever.
What is The Buckle doing with these findings? Among other things, says Bragg, The Buckle is studying the incremental impact of email marketing on both the e-commerce and brick-and-mortar business, and has plans to continue to test strategies and evaluate their impact on the business holistically.
“We also plan to continue to develop the loyalty program online,” said Bragg, “and are working to convert customers who have never bought denim to those who have.” Denim is, after all, the core of The Buckle’s business.
Looking out further, the plan is to create more detailed customer segmentation. “At this point, we have not segmented out to the individual yet,” says Bragg. “We’ll be looking at defining attributes such as — what makes a guy who buys denim different from a guy who buys knits?”
The company is really just starting to scratch the surface of what’s possible, and it’s excited about the opportunities, he concludes.
Jordan K. Speer is editor in chief of Apparel. She can be reached at [email protected].