Flipping the Retail Script for Good

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Specialty retailer Altar’d State is hot. Here’s how they’re rebuilding their IT to accommodate the blaze.

In a coffee shop in 2009, the founders of Altar’d State devised a plan for a new kind of retail – a brand with an unparalleled shopping experience rooted in an ethos that demands sharing their success with those in need. Their name hints at their impact-based approach and their drive to alter the retail industry.

“Giving back is not what we do, it’s who we are,” said co-founder, chairman, and chief executive officer Aaron Walters. “We run our business on some simple principles — treat others how you want to be treated and give much help to others. We put love into our business.”

Stand Out For Good is the Altar’d State primary mission. Locally and globally, they have partnered with over 4,000 nonprofits that provide food, clothing, resources, education, and love to children in need. The retailer operates 144 stores in 39 states, and includes four sister brands: Arula, specializing in mid and plus sizes; Vow'd offers unique, beautiful wedding wear at an honest price; Tullabee curates clothing for baby and toddler; and AS Revival focuses on women’s activewear.

Joergen Scheuer-Larsen

As the flagship brand Altar’d State took off, they needed to revamp their IT to support their growth. In 2022 they brought in Joergen Scheuer-Larsen as SVP and CIO. Prior to joining, Scheuer-Larsen held executive roles at powerhouse brands, including Lego, Carlsberg Breweries, and Fossil. He is currently overseeing a transformation of Altar’d State’s IT systems.

Altar'd State IT has been anchored around traditional Retail IT architecture that had difficulty supporting growth. Adapting it for their needs meant a redo of their entire architecture. Instead of restructuring IT by changing incrementally, Scheuer-Larsen made the decision to greenfield IT from scratch. He changed everything from basic infrastructure to application layers and functional layers. One of the pillars of the updated architecture is implementing Google Cloud. “Now we can flex with capacity without investing a lot of capital in traditional infrastructure. Our time to market has been reduced significantly, and that's important for a company like this that grows fast,” Scheuer-Larsen said.

As CIO at Fossil, Scheuer-Larsen turned IT into an asset rather than a necessary evil and has brought a similar approach to AS. The IT teams are built around a capability model, establishing centers of excellence for the main business areas like retail stores, ecommerce, supply chain, and finance. As an example, these CoE's virtually cover everything involved in retail operations, from point-of-sale, ecommerce, inventory, and distribution to purchasing, return processes, and the back office operations like finance. “In this model, business analysts play a very important role helping with the system’s process and integration design. We work very closely with our external partners on the technical part of it,” he explained.

Working with Major Service Providers also gives the company real flexibility. “The important part is that the scalability happens with external partners and not with us, so if we're doubling the company tomorrow, I will in principle not need to double the team because the process stays the same.” The approach also widens their tech options and helps to control costs. “I can now afford to buy computing power like Walmart. I probably can’t buy as much, but I can buy the same technology, which is a huge difference,” he said. “Another great advantage you have with this partner structure is that you can collaborate on innovation and solutioning. Tech companies like Google, SAP, and Infosys invest in innovation, which, in turn, benefits us.”

The last component of this model is that IT must understand the business it’s supporting to be able to bridge business needs to solutions and service. “This is perhaps the most difficult part, as IT departments do not traditionally practice regular interactions with all business stakeholders. We become like an extension of the business. If I can’t understand the business problem by talking to people, I'm not doing my job as an IT person,” he stressed. This also means getting the right talent is essential.

“Because IT services everybody in the company, I have to treat everyone like a customer,” the CIO said. It’s not just like a pyramid being turned on its head. “Traditionally you’d spend 80% of your expense cost on maintaining and keeping the current systems running. I'm trying to say, ‘OK, now I'm flipping that.’” The strategy changes to spending 80% on driving business and 20% on maintaining the technology.

Product availability is the lifeblood of retail operations, and new technology helps to keep products on store shelves, virtual or not. The majority of the company’s ecommerce orders are fulfilled out of a store. “Availability of the product has been crucial for us and that's why we have partnered with companies like SML RFID,” he said. “We've been with them in their lab in Plano, Texas, discussing how we can manage our products in stores and supply chain better … such as identifying what is available in stores through scanning the RFID tags daily.”

SML works with Altar’d to see problems from both sides, which shortens their road to success. “They're a very good partner with us,” he noted, adding that the organization’s strategy of being more collaborative and more open with partners helps to foster relationships and ditching what he called “a typical nickel-and-diming kind of attitude.”

Their collaborative approach extends to the way Scheuer-Larsen approaches partnership. “It will take years to convert my current IT suppliers into partners, and this is not a win or lose situation. We like to open up to the problems that we have so that partners can better help solve it.

“It’s a win-win. Most partners are very gracious and very honest about this,” he said. “They’re very appreciative about this approach because it makes their job a lot easier. They get success very easily.”

Altar’d State is currently enhancing the way they present their products online, and within the next four months will debut a new overhaul of the mobile experience. It’s still under wraps, but we know it will be functional, fun, and a sure-fire way to help boost profits so they can give them back to the communities they serve. It’s a beautiful thing.