Fashion retailer racks up savings with greater efficiency through ICG Commerce procurement services

Situation:

Needing to do some belt-tightening, a $5.7B specialty fashion retailer wanted to trim $25M in expenditures from its budget in just 2 years. The goal was to remove costs from the "back of the store" so that the company could focus their resources on customer-facing initiatives. However, with 140 stores nationwide and no standard procurement process, the leading retailer faced significant challenges in driving out inefficiencies and achieving cost savings. With limited resources, no procurement technology and a lack of visibility into their spend, the company looked to ICG Commerce for comprehensive procurement services.

Solution:

To give the retailer a clearer view of their expenditures, ICG Commerce procurement professionals categorized and analyzed $450M in indirect expenditures. Through this process, immediate savings opportunities were identified and a savings strategy was implemented. With ICG Commerce's help, the retailer began to centralize their sourcing activities while maintaining store-level ownership of purchasing activities.

For office supplies, forms, corrugate and promotional items, existing ICG Commerce online catalogs of pre-sourced, optimally priced items provided rapid savings to all stores. Savings in corporate travel, casework, LTL, small parcel and shopping bags were achieved through a collaborative effort between sourcing experts at ICG Commerce and internal sourcing resources at the retail company. To ensure employees at the retailer were adopting the new solution and supplier agreements, a comprehensive change management program was implemented. Executive communication and ongoing user training played an important role in ensuring the company's success with the initiative.

Results:

The ICG Commerce solution including new supplier agreements and complete purchase-to-pay transaction management technology was rolled out to 700 users across 140 locations within six months. Over 80% of the users were using the new services and technology in the first year of the initiative. An average savings of 14% was achieved, helping the company reach their $25M savings target.