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8/2/2011
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Retail 2.0: Cloud Supports Pop-Up Store

Fashion designer Yigal Azrouel heads to the cloud to provide the services needed for brick-and-mortar "pop-up" stores.

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If retail is all about location, then a high-end fashion designer could do worse than New York's tony Hamptons area. Problem is, business booms there during the summer season and falls flat for the other nine months of the calendar, making it difficult for businesses--especially smaller ones--to justify paying overhead year-round.

So the 45-person fashion firm Yigal Azrouel did as thousands of other New Yorkers do: They leased a summer home. The company opened a "pop-up store"--a temporary brick-and-mortar location, which has become a growing retail trend--to capitalize on the droves of well-heeled shoppers that pack the eastern end of Long Island each summer. Yet CEO Donata Minelli said that while the pop-up shop presented a clear-cut business opportunity, the company struggled with extending its server-based point-of-sale (POS) system to its summertime digs.

"It was always quite problematic and hectic," Minelli said in an interview. "We felt operationally it was exhausting on the company."

So much so that Azrouel skipped the 2010 summer season. They're back this summer, having shed server-based IT for a cloud approach. Minelli and company signed on with ERPLY, a Web-based point-of-sale (POS) and inventory management provider. Now, the necessary infrastructure at Azrouel's Hamptons pop-up--which brings in around $500,000 during three months of business--boils down to two iPads, a laptop, and a printer. What once involved three to four days of hardware set-up alone was accomplished largely over the phone with the ERPLY team, plus a couple of brief face-to-face meetings to solidify plans.

ERPLY's iPad support was a key attraction; now, the Hamptons store also spawns dozens of on-demand mini-pop-ups in customer homes and other places. Likewise, Minelli said the company is developing much broader plans for mobile commerce in a variety of locations, such as music and art festivals and charity events.

"It gives us the flexibility that's something between e-commerce and actual brick-and-mortar store," Minelli said. "We do bring some physical components but [shoppers] are also excited to work with you off of photographs and fashion lookbooks, and actually make purchases just based off of imagery."

The cloud-backed pop-up concept has worked so well so far, Minelli said, that Azrouel is considering a retail "caravan"--essentially a mobile store that roams the country for six months or so. Not only could that boost sales, but it would give the company a low-risk way to test a ton of new markets in the process. Equally important from an IT operations standpoint: Minelli said they've gone from daily technology issues with the server-based approach to virtually none whatsoever.

"When your POS system breaks down, there's nothing to do," Minelli said. "You're writing down credit card numbers and just trying to figure out ways to make transactions, and we haven't had any of those issues out there."

While Azrouel's flagship Manhattan location will stick with its servers, Minelli said the company will take the cloud approach for all new stores. That's in part because it has eased the company's IT burden considerably, and employees have found the new system easy to use. "Fashion is one of the least technologically advanced industries," Minelli said. "We have a lot of people in here who aren't so savvy."

Bigger picture: Flexing its cloud muscles didn't just help Azrouel tap into the lucrative Hamptons scene with fewer hardware headaches. Rather, Minelli said it's revamping the way Azrouel thinks about its brick-and-mortar retail strategy. It's likely that other smaller designers will follow suit, though Minelli notes that large fashion concerns operating hundreds of retail locations will be slower to adapt and adopt.

"This offers us the ability to bring a store anywhere," Minelli said. "It's actually not small--we don't look at it as little, three-month opportunities. We're using it as: How creative can we be in regards to putting a store anywhere we want to?"

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