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Demystifying E-Commerce

By Peter Galuszka

As it appears on Greater Richmond Logistics website.

Amazon.com isn't the only company that knows e-commerce. F. Curtis Barry & Company has built a profitable business in telling clients how to squeeze fatter margins out of Internet and catalog retailing.

“Pick, pack and ship” may be jargon to the average person, but it’s a hot trend in logistics, especially in the e-commerce field. “It’s when the company needs to send only one to three items worth maybe $60 to $100,” explains Curt Barry, president and founder of F. Curtis Barry & Company.

The job sounds simple, but it really isn’t. It can be harder to ship just a few items than full-carton or store orders. Picking the items, packing them, shipping them overnight delivery and processing returns is more demanding for e-commerce than traditional retail. Because Internet customers have a "point, click and deliver mentality," says Barry, some companies find themselves picking and shipping 80 percent of their orders the same day.

"You have to get operations management to re- conceptualize their logistical systems and centers," says Barry, whose nine-person, Richmond-based firm serves such marquee, multi-channel vendors as Tiffany & Company, L.L. Bean, West Marine, Nordstrom, Coldwater Creek, Neiman Marcus and outdoor outfitter Cabela's.

Crisscrossing the nation, Barry’s retail distribution consultants help clients with a wide range of disciplines: site location, center layout and design, workflow improvement, cost reduction, inbound and outbound freight cost, and the set up of order management systems and warehouse management systems, among others.

While F. Curtis Barry & Company serves multiple channels -- retail, e-commerce and catalog -- Barry notes that e-commerce holds the most immediate sales promise. “Growth in e-commerce is still in the double digits compared to single digits for traditional retail,” he says. Now hitting its stride after the bloody tech crash of 2000 that “got rid of the weak players,” e-commerce accounts for more than 50 percent of net sales among traditional catalog companies.

Even large retail chains generate a significant percentage of sales via the Internet. Some allow customers to order online and pick up at the store the same day. That puts a premium on e-commerce systems, inventory management, order management and logistics.

Adaptability is key to survival in the logistics business, says Barry, whose career stretches back more than three decades. He’s seen retail morph from downtown department stores like Miller & Rhoads, to specialty stores like Abercrombie & Fitch, to big-box retailers like Costco, to catalogs with call centers like L.L. Bean, and to purveyors of e-commerce like Amazon.com.

Barry's consulting company is part of a larger mosaic of distribution and logistical companies located in the Richmond region, notes Gene Winter, senior vice president of the Greater Richmond Partnership, a regional economic development organization. From Fortune 500 companies with global supply chains, to nationwide freight carriers to nimble companies developing specialty niches, businesses in the region know how to move things around. Says Winter: "An expertise in supply chain management seems to be embedded in the regional DNA."

Barry says the region is "a great place to live, with great costs of living” -- a major bonus for a consulting company that lives and dies on an ability to recruit and retain logistical talent.

The Richmond location is largely happenstance, though. Barry just happened to be living here when he left Washington, D.C.-based GBM, the holding company for Garfinckels, Brooks Brothers, and Miller & Rhoads Inc.

Growing up in western New York, Barry had started work in 1970 at NCR, the venerable, Ohio-based cash register maker that was going through an electronic revolution. In 1973 he helped install 1,500 new electronic point-of-sale devices at the Hecht Company, which served the Mid-Atlantic area. From there he jumped to GBM as head of research for systems development and implementation.

Turmoil in the department store industry and a hostile takeover of GBM by Allied Stores Corporation in 1983 prompted Barry to move again, first to co-found a direct marketing systems development company, and then in 1985 to form his own business, F. Curtis Barry & Company, in 1985. By this point, he had not only learned the retail and catalog trades but had become expert in information systems and logistics.

Barry and his small team have become recognized authorities in the national logistics consulting scene. Together they have written and published more than 200 articles in trade journals or online about such topics as planning for a Katrina-style disaster and using benchmarks to help clients understand how well their logistics operations are working.

E-commerce got its start in the 1996-97 era when the Internet achieved critical mass, Barry says. His firm jumped on board early.

Executives need to keep a steady stream of data flowing -- the cost to fulfill the orders, turnaround times, indirect labor costs -- so they can make efficient operating decisions. Setting up internal systems to gather such data can be onerous. So far, Barry has advised more than 100 companies.

Drawing upon a wealth of experience, he says, the firm's experts “can help share the best practices implemented internally by companies.” Benchmarking helps catalog and e-commerce companies identify areas of improvement. Large companies like L.L. Bean and Lands End ship more than 100,000 orders per day. Margins can be precarious and good intelligence is critical.

Another service area, representing about 40 percent of the company’s revenues, is in helping clients choose software systems to manage their call and fulfillment centers, their inventory and their marketing. Current call-center systems do a lot more than just take down addresses and handle payments.

“It’s more about integrated systems that hook all these departments and disciplines together," says Jeff Barry, Curt's son and the firm's vice president of marketing. "These systems not only process the orders, they handle the incoming calls, interface to the website, perform the warehousing and order fulfillment, produce marketing information and manage the inventory."

Between 30 to 40 companies make software systems for call centers, website sales and warehouses. Settling on just one can be a daunting challenge.

In another service, Barry experts help clients who are planning new warehouses, advising them on site on how to design the best layouts. Other areas of assistance include assessments of cost structures and local labor pools.

The Barry firm does some work overseas -- in the United Kingdom, Germany, Australia and New Zealand -- but the bulk is in the United States. Although the firm has advised such West Coast companies as Starbucks Coffee and Frederick’s of Hollywood, most of the work is east of the Mississippi.

For a while, traveling out of Richmond had some disadvantages, such as high airfares, but that has changed with the arrival of discount carriers. “It used to cost me $800 to go to Boston but now it’s about $260,” Curt Barry says.

Not all clients are far away, however. Barry has helped Lillian Vernon in Virginia Beach, Colonial Williamsburg in Williamsburg, Crutchfield in Charlottesville, Shades of Light in Richmond, and The Virginia Diner in Wakefield.

“They are very knowledgeable, especially about cataloging,” says Virginia Diner president Chris Epperson, who hired F. Curtis Barry to help set up a mail order fulfillment center and redesign its warehouses. Famous for down-home Southern style cooking, Epperson’s company has a mail order operation that ships special items, such as tins of gourmet Virginia peanuts.

For Barry, it’s no big deal: His consultants can handle anything from goobers to Tiffany diamonds.