Moving at the Speed of ecommerce:

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An Amazon Webstore Case Study

“Since launching our site with Amazon Webstore, we have increased the company’s gross margin in the retail channel. That’s great news for the business.”

- Kevin Miles

Moving at the Speed of eCommerce:

How Alternative Apparel Found Agility and Increased

Sales with Amazon Webstore

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About Alternative Apparel

Headquartered in Atlanta, Georgia,

Alternative Apparel has a mission to be the clothing company that really gets it—offering clothes and accessories that aren’t just about looking good, but also feeling good.

The company takes pride in its vintage-soft fabrics, one-of-a-kind washes, and hand- detailed designs, but sees its role as going far beyond premium merchandise and service. Alternative Apparel is also serious about its social responsibility and commitment to the community, and promoting the idea that people can live passionately, purposefully, safely, and without compromise.

EXECUTIVE SUMMARY

As specialty clothing retailer Alternative Apparel enjoyed growing popularity of its casual fashions, its existing eCommerce system couldn’t meet the demands of a dynamic marketplace. Creating sales and other promotions was time-consuming and required IT intervention. To streamline

website changes and improve site stability and functionality, Alternative Apparel moved its site to the Amazon Webstore platform. The platform allows the marketing team to change site content and promotions, without IT help, in hours instead of days. The retailer can now offer customers more

clothing choices, with better service—all with lower internal costs. After making the switch to Amazon Webstore, month-over-month sales increased by double digits and gross margins have risen by several percentage points.

We take comfort in our belief that if a technology emerges that’s important

for online retailing, Amazon will add it to Amazon Webstore…and we’ll be ready and eager to take full advantage of it.

- Kevin Miles Marketing Operations Manager

Alternative Apparel

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CASE STUDY: ALTERNATIVE APPAREL

To that end, Alternative Apparel requires its manufacturing partners and vendors to agree to operate under working conditions that support quality of life for their employees.

This includes treating workers with respect and dignity, paying a fair wage, and offering a safe workplace that is free of harassment, abuse, and discrimination. Vendors must also agree to comply with applicable

environmental regulations. The company proactively selects vendors that use recycled and organic fabric materials, low-impact dyes, and manufacturing methods that conserve energy in their facilities.

Alternative Apparel’s motto is that comfort, inside and out, will always be in style.

®

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THE CHALLENGE

Replacing Slow, Cumbersome IT Procedures for Website Changes

Alternative Apparel sells its product through traditional physical stores, but also generates sales through its retail website. In early 2012, the company’s clothing and accessories were becoming increasingly popular, but its third- party eCommerce system wasn’t keeping pace with the retailer’s need for flexibility.

Although the system offered enterprise retail features, it still posed several problems.

One issue was overall site stability. Alternative Apparel had high standards for website operational performance, but the online store suffered from unacceptable slowdowns and outages. Another issue was the relatively high fees for scaling up the website on its hosted platform to support the retailer’s growing line of clothing styles and expanding customer base. Still another issue was usability;

even technically savvy employees found the software cumbersome. But the biggest issue was the resource needs—the time and effort required for site maintenance and for employees to make even a simple change to the site.

Too Much Work

Kevin Miles, Marketing Operations Manager for Alternative Apparel, confronted these problems nearly every day. “If we wanted to launch any kind of promotion to highlight an item or one of our clothing lines, or just update the product catalog or change

descriptive content, we had to file a ticket with our IT department,” he says. “It could take up to two weeks. It was way too slow for a competitive retail fashion environment where we have to be able to respond to market changes.”

That meant, for example, that promotions could get out of sync with inventory—items that ran low in stock would be promoted, and replacement promotions for in-stock items weren’t deployed quickly enough. Potential sales were lost, inventory management was inefficient, and some items that could have been sold right away ended up in clearance sales with low (or negative) margins.

Marketing can come up with an idea, have the creative team design the images, and get it on the

site within hours…

Before, it would have taken weeks.

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The slow processes not only interfered with the marketing team’s ability to upload creative content, but also distracted IT from working on value-added projects to improve site functionality. “We have pretty high-level developers, so they should be focusing their energies on our ERP [enterprise resource planning] system, not on low-level HTML changes,” Miles says.

Too Little Flexibility

The eCommerce system also lacked flexibility to support sales opportunities based on special circumstances. For example, in

August, the State of Georgia offered residents a weekend sales tax holiday for eligible back-to-school items, including clothing but not accessories. Miles describes as

“cumbersome” the process of altering the eCommerce system’s simple billing rules to account for sales taxes based not only on geographic location but also on a range of dates and different types of items.

Alternative Apparel wanted to replace its eCommerce system with a website platform that would support faster promotion

launches, offer flexibility and ease of use, and work with its existing ERP software. The company also wanted to avoid any expensive capital investments or large up-front fees.

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THE SOLUTION

Give Marketing Direct Control of the Web Site

To address these issues, Alternative Apparel first decided that any new web platform would have to be easy enough for the marketing team to use without IT help, at least for the public-facing retail site. This would include, for instance, the ability to run dozens of simultaneous, continually-changing promotions, to launch targeted email

campaigns based on flexible criteria, and even to control the look and feel of pages within site guidelines.

Why Amazon Webstore?

The company looked at several platforms, including the major eCommerce players and companies that specialize in building

enterprise-class capabilities in a low-cost platform-as-a-service model,” says Miles.

“And because of Amazon’s reputation, we figured its platform would be among the best, from a stability point of view.”

Miles notes that ease of use and site customizability were the other primary considerations, which meant that the IT team would handle back-office maintenance and the marketing team would handle the rest. “Once we realized how much control the marketing team would have over the site, and how quickly site changes could be made on the platform, we knew we had definitely made the right choice with Amazon Webstore,” he says.

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IT was responsible for the initial integration of Amazon Webstore with Alternative Apparel’s ERP system, and that process went smoothly. “The engineers looked at how Amazon Webstore works and how the data feeds go back and forth between it and the ERP system,” says Miles. “They decided that building a simple tool to manage communication between the two would be straightforward.” The tool uploads the store’s apparel catalog, and it queries the ERP database to pull out records when they’re needed and puts them in a usable format for Amazon Webstore.

The company launched its upgraded retail apparel site to the public on September 12, 2012, and business benefits began to appear right away.

Site Promotions Can “Turn on a Dime”

Promotions that are out-of-sync with inventory are no longer a problem. If the staff notices that the inventory of a particular item is building up, they can have a one- week sale, a one-day sale, or a flash sale.

“Marketing can come up with an idea, have the creative team design the images, and get it on the site within hours,” says Miles. “We can launch site promotions that can turn on a dime—updating the site so fast wasn’t even an option before. It would have taken weeks.”

Miles emphasizes that the marketing department can now support the site with

minimal IT assistance. “The quick turnaround gives us a much better process to support the business,” he says.

Now, Alternative Apparel can easily vary the number and types of promotions. Miles adds,

“With Amazon Webstore, we can run, say, 30 different types of sales, launched quickly, and applied to a particular style, group of styles, or the entire catalog.”

The retailer is also prepared for unexpected spikes in site traffic because Amazon Webstore supports the site with flexible bandwidth. “If promotions turn out to be more popular than we expected, we can accommodate however many customers visit the site.” Miles notes that there have been no peak load issues on the new site.

Amazon does all the credit card processing…

chargebacks from fraudulent use of credit

cards are almost nonexistent.

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Rich, Built-In Functionality Saves Time and Money

Miles says that his team continues to be impressed by Amazon Webstore’s large selection of out-of-the-box features that would have otherwise been expensive to buy separately or too time-consuming for IT to develop. “We were previously paying a fee to a third-party for customer review and ratings capability, so right there, Amazon Webstore gave us an immediate cost savings of $30,000 a year.” He also noted that

Alternative Apparel now benefits from the upgrades and innovation that Amazon adds to the platform, without having to dedicate their own IT resources to developing those improvements.

In addition to those cost savings, the Alternative Apparel team also noted other

benefits that impact the company’s bottom line;

among them, improved tools for driving traffic with search engine optimization and lower credit card fees compared to their prior platform.

As Miles and his team become more familiar with Amazon Webstore, they continue to find more ways to enrich the website with functionality that’s built-in, easy to customize, and valuable for the website’s fit and finish. He cites Amazon Webstore’s search refinement functionality and automatic customer communications (order and shipping confirmations) as typical examples. “These key features are standard; we don’t have to build them or debug them—they just work.”

ALTERNATIVE APPAREL SPEAKS OUT

“ Now is the time for an alternative solution. A clothing company that really gets it. We know our

customers want clothes that aren’t just about looking good, but feeling good. Clothes that are

perfectly worn in and perfect for any occasion—clothes for a casual, truly comfortable lifestyle.”

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Customer Service Tools Promote Satisfaction, Loyalty

Perhaps the most unexpected benefit to Alternative Apparel from Amazon Webstore’s out-of-the-box capabilities has been an expanded suite of customer service tools. Miles notes that such tools are usually part of an expensive dedicated customer service system, but Amazon Webstore includes them in its feature set. This benefit is especially important to Alternative Apparel since it takes such pride in promoting customer satisfaction.

“Now, when customers call with a question and we look up their order, we also see their entire history of orders and correspondence,” Miles says. “We know at a glance what types of clothing they’re interested in, and we can pull up every refund we’ve ever given them—it’s much easier for our customer service reps to be more responsive now than it ever was before.”

He adds that Amazon Webstore’s

automatically preselected and customizable form letters also help reps respond to email questions faster. “Using these tools adds to our customers’ impression that our company takes their questions seriously, and that has a big effect on customer loyalty.”

Strong Security Safeguards Against Chargebacks

Like any retailer, Alternative Apparel worries about chargebacks on fraudulent

processing system offers a big advantage over other billing methods. “Amazon does all the credit card processing, approves the transaction, and helps mitigate risk, so the chargeback headache is effectively gone,”

Miles says. “Chargebacks from fraudulent use of credit cards are almost nonexistent.”

Built-In Tax Engine, and Other Benefits

The State of Georgia had another sales tax holiday for the weekend of October 5th. This time, Alternative Apparel was able to put Amazon Webstore’s built-in tax engine to work—the same engine used by Amazon.

com that supports flexible, changeable tax situations. Miles says, “Complicated sales tax rules are handled directly by Amazon Webstore itself, so we don’t have to do anything. What was a nightmare for us to implement before will be now be a great sales

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Bottom Line: Sales Are Up, Costs Are Down

The company’s direct-to-consumer sales are up double digits for the year, since adopting Amazon Webstore in September.

Alternative Apparel has also experienced lower operating costs due to sharply-reduced site maintenance requirements, fewer third-party services, almost no chargebacks, and freed-up IT labor. That means the clothing retailer’s profits are up. “Since launching our site with Amazon Webstore, we have increased the company’s gross margin in the retail channel,” says Miles.

“That’s great news for the business.”

NEXT STEPS

Miles credits Amazon for continuing to develop new retail functionality, at no additional cost to Alternative Apparel, which will make the store’s operations more efficient and offer an ever- improving customer experience. “We take comfort in our belief that if a technology emerges that’s important for online retailing, Amazon will add it to Amazon Webstore in a way that’s easy for us to implement. And we’ll be ready and eager to take full advantage of it.”

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Amazon Webstore is a complete commerce platform that enables companies to leverage Amazon technology and expertise in building and managing their direct- to-consumer business.

Commerce sites built on the Amazon Webstore platform utilize Amazon’s powerful cloud infrastructure and payment processing technology to deliver a scalable, secure online shopping experience to customers. Amazon Webstore also integrates seamlessly with selling on the Amazon Marketplace and using Fulfillment by Amazon, Amazon Prime, and other Amazon Services.

To get started with Amazon Webstore, visit the website at webstore.amazon.com or contact the Amazon Webstore team directly.