Rocky Mountain Chocolate Factory

50-Store Candy Franchise Sweetens Sales, Whips Up Reports, and Clarifies Visibility

Rocky Mountain Chocolate Factory was filling stores with customers, selling new franchises, and constantly renovating stores. But customers might see three systems in one visit thanks to a patchwork of old electronic cash registers (ECRs) in every shop. Collecting information from them was sporadic and required tinkering. Data was inadequate for reports, and prospective franchisees saw ECRs as a weak spot. The RSC Group had tailored the company’s Microsoft Dynamics® GP ERP system, so its recommendation of Microsoft Dynamics Retail Management System opened doors. All sales functions now occur on one register and transactions are four times as fast. Daily polling delivers accurate data from every store, and information slides into Microsoft Dynamics GP. Store owners and executives have data on sales, stock levels, a customer loyalty program, and reports to manage growth.

Situation
At Rocky Mountain Chocolate’s 50 Canadian stores, it’s not just a purchase. It’s a sensory event from the second a customer opens the door and sniffs a heady sequence of candy, chocolate, caramel, and apple fragrances. They watch fudge being made or see a copper pot of caramel ready for apples with extra toppings like s’mores, tiger butter, and Rocky Road. They watch staff pour “brittle” batter over peanuts, cashews, almonds, macadamias, and pecans. They hear Rocky Pop, a caramelized popcorn, snapping in the kettle, ready for mixing with various nuts.

Sales by Weight, Piece, and Package
But making sales and tracking inventory and income is no piece of cake. Stores sell 300 to 350 dynamically changing SKUs including assorted chocolates, clusters, creams, moguls, truffles, barks, and “bombs.” Holidays add and subtract 50 to 70 new items to the standard fudges, candy apples, five frozen yogurts, seven sorbets, and 37 ice creams. The same item may be sold by the piece, by weight, pre-packaged in several sizes, and sometimes with specialty packaging. Some stores add delights of their own making.

To allay caloric concerns, the company Web site points out, “Chocolate has 4 times the antioxidant content of tea.” One line of candies is sugar-free, and cocoa-free treats are available for Fido.

Rocky Mountain Chocolate Factory is the exclusive Canadian Master Development License holder for Rocky Mountain Chocolate. From its first Canadian store, opened in Whistler Village, British Columbia, in 1988, Rocky Mountain’s stores meet highly varied client demands in airports, ferry and train terminals, ski areas, major malls, and street fronts. Including stores and corporate, employees number nearly 500.

Blending Community, Candy, and Commerce
Each store design reflects its environment, from traditional European to modern, yet retains the company look. A year-round program of renovation ensures customers reliably experience a fresh, new look. Rocky Mountain shows much deeper community concern by financially supporting Children’s Hospital Circle of Care throughout Canada and scores of local youth sports teams.

Purposefully, Rocky Mountain doesn’t sell via Web sales as packing and shipping costs for gourmet foodstuffs can be burdensome. But it markets through multiple channels by seasonal brochures and accommodating in-bound telephone and e-mail orders. It implemented one of retail’s earliest loyalty programs in 1996. Today, its Rocky Cards continue that evolution with customer-designable photo loyalty/gift cards.

Bitter Bytes
“We had a network of older electronic cash registers (ECRs) spread all over Canada, and thought we were okay,” says Brian Kerzner, who is president in a company that avoids titles. “Perhaps we were lulled into keeping our ECRs longer than we should have.”

“Signs kept showing us we couldn’t grow with them. Stores whose products are often impulse items can’t have slow transaction processing, and we did. Lines got long. And at worst, a customer might need three separate transactions—one each for our separate cash, credit card, and loyalty systems. We weren’t making it easy on them or us.”

Scattered Data, Recycled Hardware
“We had information we couldn’t find, use, or massage to our needs. Polling occurred only at day’s end and required constant user intervention,” says Kerzner. “The worst part was our polls’ only coming in 60 percent of the time. Then data went into an assortment of Lotus, Microsoft® Excel®, and Microsoft Access® databases, so we had very limited reporting or big-picture business analysis. It’s an axiom that spotty information will inhibit growth.”

“Except with our Rocky Cards, we never wanted to collect information on walk-in customers buying a pound of chocolate or a cone. But franchisees still needed faster, better reporting so they could purchase wisely. We at corporate needed very hard data on sales and cash reporting so we could make projections. That also influences what we should advertise. And prospective franchise buyers wanted tighter financials they could rely upon and use as yardsticks for their future.”

“As we would set up their stores, our new owners looked askance at us when we had to cannibalize, assemble, and polish up their ‘new’ point-of-sale system from our bone-yard of old ECRs! In several ways, we were hand-cuffing growth we worked so hard to achieve.”

Solution
Even though accurate information from stores was often slowed or stopped by stores’ network of ECRS, as early as the mid-1990’s Rocky Mountain had standardized on Great Plains accounting software as its mainstay for enterprise accounting and records. In 2001, Microsoft acquired Great Plains and evolved it into Microsoft Dynamics® GP, software for business integration and management.

Order of Importance
“Our prime concern in selecting a point-of-sale solution,” says Kerzner, “was ensuring it would mesh with our trusted Microsoft Dynamics GP. When we first bought it, it was technical overkill, but we could train a receptionist to send invoices and do many other tasks with it. That’s the people-philosophy on which we’ve built this business. Even as a ‘penny retailer,’ we invest in top-end IT products that empower bright people—and it worked.”

“I had always planned on just expanding our ECR setup using Casio, Panasonic, or Sharp. But the constant uncertainties were scaling up and staff acceptance, so we started investigating PC-based software solutions at the POS. Our head accountant saw a full Microsoft Dynamics Retail Management System (RMS) demo. When she convinced me to see it, all the advantages of computerization hit me. Yes, it would cost more than ECRs, but it would bridge all the information gaps in the company. We would have knowledge! And it would eliminate any need to buy and maintain a third-party database to collect data before it reached Great Plains. We had found the right IT products. Our old ECR system would have risked losing everything we had built.”

Each store has an installation of Microsoft Dynamics RMS, whose data is polled at will by Microsoft Dynamics RMS Headquarters, the centralized solution that gathers and combines enterprise data. Headquarters allows corporate to see the enterprise or any parts of it, and to send changes, such as sales on items or categories, to the network, to groups of stores, or individual stores. Users control reports and changes on familiar spreadsheet-like screens.

A Thorough Retail Solution
“Microsoft Dynamics RMS is a sophisticated retail solution. It wasn’t touted as a high-volume system, yet it easily manages our tens of thousands of transactions every day and the data they generate. It has a fast front end, supports our many ways of selling the same product, has customer loyalty capability, and handles our weighing scales,” says Kerzner. “It’s a full-circle, full-service solution. The software’s been bulletproof. It’s very usable by staff, particularly with a touchscreen. Its IBM hardware works well. Even in our sticky counter environment, we don’t have problems. It’s done well for us.

“Now we use Microsoft Dynamics RMS and Microsoft Dynamics GP to see our data. This combo is affordable and allows us to grab our information and manipulate it, yet control what each store sees. Each store sees only its own numbers, but soon they’ll be able to compare their stats to overall company trends.”

Rocky Mountain began installation on its pilot store in July 2005 and initial rollout finished in December 2006. New stores continue to open and deploy Microsoft Dynamics RMS throughout 2007 and 2008.

The large rollout installation brought challenges, as Rocky Mountain had to combine every store’s separate POS, loyalty, and merchant verification systems into the unified one-register solution of Microsoft Dynamics RMS running on IBM SurePOS registers. “But we pre-programmed and loaded the PCs, so it went pretty well,” says Kerzner. “I was expecting trouble integrating Microsoft Dynamics RMS with our pre-existing loyalty system, yet that was trouble-free.”

Benefits
Kerzner says, “Our most instantaneous change was staff and store-owners’ immediate love for Microsoft Dynamics RMS. And they do sales in just 25 percent of our old transaction time. I had expected a full-blown mutiny from the franchisees because they would bear their own costs for each store’s upgrade. Conversion meant physical and countertop changes, new staff and management procedures, and new training. I expected our managers to fight it, but they embraced it. I was shocked it was so happily received. Store owners were hungry for it. They tell me they absolutely love the trainability and daily use. I haven’t heard one complaint. And if they didn’t like it, I’d sure hear about it.”

“Every store owner or manager now has much more management data than before, and they can manipulate it with the report capabilities inside Microsoft Dynamics RMS,” continues Kerzner. “Our corporate decision-making is more timely because we can poll our stores’ data whenever we want to. Microsoft Dynamics RMS polls come in like clockwork without user intervention. Once the data’s in, almost any analytical software can pull it from the Microsoft SQL Server database.”

More Scoops, Please
“I have zero concern about scaling up this company with Microsoft Dynamics RMS and Microsoft Dynamics GP,” Kerzner says. “It’s very easy. We could add another 50 stores and this system would handle it. We’re upgrading to new hardware so we can install Microsoft Dynamics GP 10.0. Soon we’ll have even more reporting and data viewing flexibility using TARGIT’s Business Intelligence Suite. Microsoft Dynamics RMS data will slide right into it.”

“Training staff goes very quickly! Our old systems were scarier than they needed to be for what they delivered,” states Kerzner. “These are easy and very visual, so training happens very quickly.

“It’s helped increase revenue two ways. We had been under-delivering to customers and franchise owners. Now customers get a quick, seamless, all-inclusive retail experience that matches the appeal of our products. Faster transactions mean shorter lines, which means more people can stop in for that quick impulse purchase. Having a complete, modern POS solution benefits our prospective franchisees. We show them the ease of closing the day, the reporting tools, and our Rocky Card loyalty program. That makes our initial sale easier.”

Rocky Mountain Chocolate will soon expand the system’s use to streamline inventory levels and accurize buying. Its warehouse will be computerized. “All these business necessities would be impossible with ECRs,” points out Kerzner. “We’re a young company and most staff are computer literate, or want to be. So we’re pushing the envelope and getting all we can from automation. We’ve already committed to several locations for 2009 and we expect strong expansion across the country.

“We expected this system to do everything, and it hasn’t disappointed us.”

Sharing Dessert
“I feel that retailers have to take control of conversions from the outset,” says Kerzner. “We saw VARs who weren’t retailers. They wanted to adapt our business to their software. That’s a non-starter. We start out with, ‘This is how we conduct business, but we have some flexibility.’ Microsoft Dynamics RMS has been good for that. It’s amazing that any system could adapt this well to our business.

“And finally, expect to exceed your budget. That will happen because you’ll find new capabilities that you must implement but hadn’t foreseen. They’ll cost extra money, but you’ll go for them because you’ll see their business benefits and how they’ll return you more money than they cost.”