Urban Outfitters Pilots In-Store Mobile Point-of-Sale Technology

By Adam Blair
Urban Outfitters CEO Glen Senk has confirmed that the retailer is testing mobile point-of-sale technology in its stores, and he foresees starring roles for consumers' own mobile devices in the near future.

"We believe it will be just a few short years before customers walk in the store, scan a product to learn about it or locate a size or color, perhaps share the product with a friend or read a review, then walk out of the store with a product in hand, automatically charged to the account that links with their mobile device," said Senk during a recent conference call.

While Senk did not provide details on the mobile POS tests, Urban Outfitters has been working with Starmount to develop a mobile POS solution since mid-2010, and the in-store pilots began late last year. According to a Starmount statement released in June 2010, the mobile POS solution includes the full functionality of a fixed-base POS system as well as integration with in-store databases. Urban Outfitters' store POS, Oracle Retail Point-of-Service, features open interfaces that simplify additions such as mobile technology.

New Database Already Includes 7.5M Customers

In addition to mobile commerce, Urban Outfitters is making significant investments across its direct-to-consumer channels in assortment, site functionality, marketing, social media, mobile and fulfillment capabilities. Insights from its recently completed consumer database are guiding Urban Outfitters' investment strategies and execution.

"Since the mid-year completion of our consumer insight database, we've collected information on nearly 7.5 million customers across the direct-to-consumer and brick-and-mortar channels, with the number growing every day," said Senk. "Our priority is to add capability around analytics, segmentation, and ultimately personalization, which is where we believe we'll see truly meaningful benefits."

Urban Outfitters is not ignoring its brick-and-mortar channel. The retailer plans to open 50 to 55 new stores in fiscal 2012, which began February 1, 2011. This is a slight increase over fiscal 2011, when the company opened a total of 46 new stores.

Much of the new store growth will be in Europe, a region that will also be important for the retailer's online growth. Urban Outfitters plans to add a second U.S. fulfillment center to support its direct-to-consumer business, and will also add fulfillment and distribution centers in the U.K.

Focus on Localizing Product

Mobile POS is just one of several IT investment areas for the retailer. Senk noted that last year Urban Outfitters "implemented a variety of key enterprise systems, including a supply chain management tool, a new order management system that will ultimately enable us to have a single inventory across all channels, a consumer insight database and a robust assortment management tool."

Many of Urban Outfitters' initiatives support what Senk identifies as its first priority: product. "Compelling, differentiated product is what drives our business," he said. "The product needs to stop the customer in her tracks. It needs to elicit an emotional reaction. She needs to love it. Whether it's online or in-store, localization is an increasingly important component to success, so we'll be implementing a new allocation systems that will enhance our ability to micro-allocate to each of our locations."

Senk also provided insights into how the company's corporate culture plays off the strengths of direct-to-consumer retailing. In addition to Urban Outfitters, the company's brands include Anthropologie, Free People and Leifsdottir, each of which operates its own online sites.

"The great thing about our company is we do not drive strategy from the corporation. We allow the strategy to bubble up from each of the brands," said Senk. "Each of the brands celebrates the fact that they're part of a portfolio company, so they share successes and failures with each other. All of our brands are making improvements to their sites. They are all playing with video, they are all using social media, they learn from each other. Every manager of direct business for each of our brands is always off testing something, including free shipping or subsidized shipping. It's something that we constantly look at."

A key advantage of direct-to-consumer businesses is "you can manage the ROI—or measure the ROI literally to the penny," Senk added. "And the great thing about our database, with 7.5 million customers now, is we have real clarity on cause, effect, return on investment, lifetime value and so on. So I think you'll just see us continue to get better and better at it."

For related content see: Urban Outfitters to Equip Associates with Mobile POS App