When Littlewoods merged with Shop Direct, PIPC started working on a back-end IT integration that has turned the traditional principles of integration on their head by maintaining 20 top brands, including Kays, Great Universal and LX Direct catalogues.
Traditionally mergers have seen companies lose brands to cut costs, but this has often proved an expensive mistake. PIPC is heading-up the Littlewoods / Shop Direct merger with the intention of retaining the multiple brand channels supported through a converged logistics operation.
Mergers and acquisitions usually mean cutting brands and losing customers. This has consistently proven expensive and unsuccessful but companies continue to follow the trend. Why would you want to get rid of a successful brand that already has a loyal customer base?
Littlewoods now has one back-office system running both businesses, keeping its 20 different brands alive. It also has a merged logistics operation that maintains two regional warehouses running off the same back-end system. By putting business functions such as Human Resources, financial control, order processing and distribution on one back-end you can cut costs while increasing control of the various brands.
Successful or otherwise, the cost of implementing mergers has traditionally been high. In contrast, the Littlewoods / Shop Direct merger created immediate savings, paying for itself from day one.
By centralising brand and product control, Littlewoods can be more efficient in its use of resources. It means they will not be sending three white vans down the same street again.