Van Nuys, CA, August 17, 2009 It was a great idea - to penetrate the retail power tool and home and garden market segments using a direct response (DR) strategy. Nine tumultuous months later, the team at Positec had found themselves in a great position: Tons of new customers, over $40M in new business, and a fair number of learnings about the DR industry.

Started in 1994, Positec began as a private label manufacturer located near Shanghai, China, distributing to many well-known home improvement retailers and national brands. Three years ago, the company decided to diversify its business by launching its own brands: Rockwell for power tools and the Worx brand for lawn and garden equipment.

President Tom Duncan is quite candid: "We were faced with very strong, entrenched players within the retail industry and needed a game-changing strategy to achieve our goals." It was then that Tom made the decision to introduce the company's new brands via the DR marketing channel, build their names as well as a strong customer base, and increase revenue - all on their way to achieving the goal of ultimately penetrating the U.S. retail market.

And they haven't looked back since.

Having experienced explosive sales as a result of their DR success, Positec's volume quickly overwhelmed their fulfillment, customer service and logistics systems, and existing partners. The company needed an effective strategy to meet objectives and manage increased order volume. They had three key requirements: a) the technology platform had to be designed to handle large surges in volume and meet aggressive growth goals, b) the company selected had to have a DR specialization and be able to manage large amounts of demand and supply side data, and c) Positec needed transparency and visibility at both the campaign and detail level. That's when they turned to Van Nuys, California-based Moulton Logistics Management and its network of Affiliate partners to support and strengthen their business. Integrating an array of tools, Moulton - one of the leading providers of state-of-the-art order fulfillment, call center and integrated logistics services to DR, retail and multi-channel merchants - has given Positec the means necessary to achieve their goals.

Problem

When Positec launched its newly branded U.S. operations in March 2007, its staff faced considerable challenges: The company lacked brand recognition and faced significant barriers to entering the existing - and crowded - U.S. retail market. To add to their challenges, "We had little experience navigating the waters of the DR industry, and were in for a steep learning curve," according to Rhonda Tate, Operations Manager for Positec. "At the time, our logistics partner was very good at pick-and-pack operations but did not have the systems we needed to manage a DR business. We had very little visibility into really what was happening in the business and on the warehouse floor."

First and foremost, Tom said, "Our greatest obstacle was figuring out how to build a brand - not simply sell power tools -- and in order to do that we had to maintain a high level of customer satisfaction." But there were other more operational obstacles:

• DR can drive major increases in customer demand and transaction volumes throughout the enterprise, and this impacts everything from call volumes to technology platforms and labor resources.
• The direct-to-consumer model means that Positec had to control and manage the entire production and supply-chain process; from sourcing raw materials to delivery packages to customer homes.
• Integration was also a key consideration; linking the enterprise resource planning systems in China, and their SAP platform, with a high speed front-end system that could quickly and accurately track and manage all the data required to manage both revenue and supply chain.
• And there were many aspects of the business that Positec had to attack along the way as issues became apparent to both their internal team and external partners.

Solution

As passionate advocates for their brands, partners and customers, both Tom and Rhonda agreed that they needed to make big changes after the first six months. "We were successful beyond all our expectations. It was clear that we needed a partner that knew the ropes and had systems in place to meet our needs; a partner that could handle our transaction volume, provide us the visibility we needed to grow, had a DR industry core competency, and could work well with our team and other DR partners."

After an extensive search, Positec chose Moulton Logistics Management to be their primary fulfillment, customer service and logistics partner. Tom said, "Having great pick and pack capabilities was a requirement, not a differentiator. We were most impressed by the Moulton Direct MarketerPro software and technology platform." It's Moulton's advanced information and management systems that have been the biggest aid to Positec, allowing for increased visibility, control and the ability to dissect business operations. "Moulton's drill-down capability has also been of critical importance to Positec's marketing and senior management," he added. "With bi-coastal facilities and offices in China, Moulton was a perfect match for our distribution and logistics needs."

Moulton's front-end technology platform, which manages hundreds of thousands of transactions, was integrated into Positec's system. Moulton's state-of-the-art management tools and dashboards are tailored to the direct-to-consumer channel and built to handle large volume surges.

A second key issue to the Positec team was Moulton's proven integration capabilities -- including their ERP platform supplied by SAP, media (Mercury Media and Euro RSCG) and call center partners (Ignite, LiveOps and Triton). "It was a pretty substantial undertaking to link all of our systems. Moulton's proven integration with all of our partners reduced our risk and time to market," said Tom. "Plus, they have the ability to configure customized programming to meet our specific needs, which is a big advantage."

The blended customer service solution hosted by Moulton was also important. Moulton's project team recommended a unique solution that delivers first calls to the Positec in-house team of customer service reps, achieving Positec's goal of getting immediate feedback from their customers so they can react quickly to any quality or performance issues, and any changes in the marketplace. The remaining 75% -90% of calls are handled by Moulton. "This was very important to our value proposition. Moulton built a dedicated team to help us achieve our customer service goals as well as an integrated IVR solution that enables us to economically meet the needs of our customers 24/7; routing IVR sales calls to Ignite, and capturing important campaign cost data across the board, regardless of how the calls are routed or which technology is used," said Rhonda.

Results

Today, Positec has become an industry leader in lawn and garden equipment, are doing business with over 1 million direct U.S. customers, and have placed branded products with all of the top home improvement retailers - Sears, Home Depot, Lowe's, Amazon.com and many others. Positec has been able to expand their sales and marketing organization in the U.S. and Canada, maintains a Better Business Bureau A+ customer satisfaction rating, and has achieved their goals of building a first rate brand business and meeting aggressive revenue targets - in just over two years!

Positec worked with Moulton to open the company's second distribution center, located in Charleston, South Carolina. The bi-coastal fulfillment initiative has resulted in a 20% savings in freight costs and a whopping $1 million in annual savings for Positec, as nearly 80% of the company's inventory was re-located to the Charleston facility. It's helped to reduce delivery times to the customer as well.

Moulton's platform, dashboards and drill-down tools give Positec outstanding visibility to improve their decision-making. "Previously we had limited visibility that was constrained to customer calls and orders, and the information was not delivered on a timely basis," said Tom. "Today we can quickly see a detailed picture that includes individual media placements and details, all related transactions, and an ROI calculation that includes all-in costs." This enables Positec to better target their media purchases in a way that will maximize their investment.

Moulton has also helped Positec to fine tune their techniques and processes to "save the sale" and "save the customer," resulting in substantial gains in revenue and profitability. Their joint initiative to build a reverse logistics and repair process is a prime example of seizing an opportunity and working as partners - resulting in a recovery of between70% and 80% of each return dollar!

Recent advances in the EDI interfaces between the two systems have substantially increased system capabilities and opened up a critical window of visibility so Positec and Moulton can now project transit times between arrival at port locations and delivery to the warehouse.

"Moulton has delivered outstanding capabilities to our organization; they're a great partner, and they add value to our organization and stakeholders each and every day," Duncan exclaims.

About Moulton Logistics Management

Based in Los Angeles, Moulton Logistics Management (www.moultonlogistics.com) utilizes advanced technologies to provide the direct response marketing industry with turnkey direct-to-consumer fulfillment, retail distribution, state-of-the-art customer service contact centers and web-based DR analytics software. Central to Moulton's offerings is a fully integrated web-based platform that empowers clients to manage all aspects of their campaigns in real-time, providing full back-end visibility and campaign optimization. With 40+ years of experience, automated operations and bi-coastal distribution centers, Moulton Logistics is the one-stop solution provider for the direct response industry's outsourcing needs.

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