Inside Lionel's Omni-Channel Growth

By Erin Harris, Editor-In-Chief, Cell & Gene
Follow Me On Twitter @ErinHarris_1

Here’s how an improved e-commerce strategy fueled the legendary train maker’s growth in just four months.

Lionel, the model train maker, is one of the most iconic brands of all time. Much has changed since the No. 5 electric locomotive appeared in 1903. For instance, in the 1960s, Lionel had lost its founder, Joshua Lionel Cowen, the U.S. was undergoing social upheaval, and the idealized image of Lionel railroading no longer fit in. Cut to today, and Lionel is stronger and more popular than ever among serious model railroaders, due in part to an increased digital presence and success with branded and licensed partners, such as NASCAR. In order to maintain steady growth and deliver the best possible customer experience, Rick Gemereth, Lionel’s CIO, explains how a strategic focus on e-commerce has helped the company surpass its goals.

Gemereth shares that for years, two different brands had been running on multiple, separate Magento-powered e-commerce websites — the first, Lionel Trains, the 117-year-old model train business, and the second, Lionel Racing, the exclusive provider of die-cast collectible NASCAR race cars. As such, the company endured challenges conducting business with consumers and retail partners, including Kohl’s, Target, Toys “R” Us, and Sears. “The e-commerce sites were not fully integrated with our back-office systems, which forced us to perform time-consuming batch processing and dual system updates just to introduce a simple price change,” he says. “Both websites were loosely connected to Lionel’s order and inventory management systems. This led to time-consuming, batch-synchronized processing and forced us to update two systems every time we introduced a price change or new products. In turn, we often had inaccurate inventory data that impacted the customer experience.”

Unified Omni-Channel Commerce Improves CX
Legacy ERP systems at the Lionel parent company forced business users to rely on IT for basic business information. Delays and poor visibility into sales, customer, inventory, and supplier data undermined business efficiency and growth potential. Lionel incurred unnecessary costs in outsourcing its distribution and fulfillment functions to a third-party logistics provider. To move the business forward, Lionel implemented NetSuite SuiteCommerce, a cloud-based, omni-channel commerce platform that allows Lionel to provide branded, engaging shopping experiences to its customers via video, image zooms, and quick views. “Now, we’re more agile, and our systems are sophisticated yet user-friendly,” Gemereth says. “Further, mobile commerce is important to us and our customers; now we off er an optimized experience for both brands across mobile phones, tablets, laptops, and desktops. And we have support for multiple sites.” Indeed, in partnership with Sixred, Lionel quickly launched two branded websites. The company also leveraged solutions from NetSuite’s SuiteCloud Developer Network partners SPS Commerce and OzLINK for electronic data interchange (EDI) and warehouse management, respectively.

In addition, dynamic merchandising capabilities keep Lionel’s website current, and Lionel Racing can quickly and easily list new products, allowing NASCAR fans to pre-order die-cast models of the winning car minutes after the race ends.

Gemereth states that Lionel’s customers can track order and pre-order status, manage account details, and view purchase history, which has greatly improved the customer experience. Customers may also submit and track their service and return requests. And Lionel no longer worries about IT maintenance and management. “IT is no longer a bottleneck, as marketing, accounting, sales, and production departments create their own reports and analyze KPIs,” he says.

Lionel transitioned to SuiteCommerce in four months, and the company’s B2C websites have been thriving ever since. Gemereth states, “As a result of the changes we’ve made, Lionel has greater inventory visibility and two superior e-commerce sites that deliver a top-notch customer experience.”