Gymboree Optimizes the Point of Sale Using Intelligent In-Store Networks Based On 3Com Systems.

SANTA CLARA, Calif.--(BUSINESS WIRE)--March 8, 1999--

Leading Children's Retailer Expedites Customer Services and

Captures Business-Critical Customer Data Using Advanced

In-Store Systems Running on 3Com Networks

Gymboree is using more than 500 in-store Point of Sale (POS) networks driven by 3Com(R) systems to accelerate customer services and pave the way for new-generation customer loyalty programs. The intelligent POS networks, linked to Gymboree's 3Com-based Burlingame, CA, headquarters network, are enabling the retailer to gain significant competitive advantages. The network architecture will also be used to support Gymboree's expansion to 600 U.S. stores by the year 2000.

Founded in 1976 as a play program devoted to child development, Gymboree opened its first store in 1986. Today, in addition to 500-plus US stores, the 6,000-employee retailer has a growing presence in Canada, the UK and the Republic Ireland. Recognized for clothing and play products with distinctive designs and bold colors, Gymboree stores netted more than $457.2 million in sales in 1998, an increase of 22 percent from 1997.

Using its POS and headquarters networks, Gymboree is significantly improving in-store services and business operations using 3Com technology. Credit authorizations, for example, which previously took up to 30 seconds, are completed in as little as 10 seconds. "3Com's networked POS solution cut our credit authorizations in half or more," said Robert Notte, Gymboree, senior director, IS Operations and Technology. "Customers are happier when they leave our stores, and we're getting a big boost in productivity during our busy seasons."

The POS network's price look-up (PLU) application is further expediting customer service. Using PLU, Gymboree associates automatically generate item prices from scanned stock keeping units (SKUs). PLU also instantly outputs markdowns, allowing associates to quickly generate credits and refunds based on product purchase dates.

The 3Com solution's data collection capability is additionally helping Gymboree become more efficient and profitable. Linked to ICL's TEAM POS 5000 terminal in each store, the standards-based network distributes the price, tax and time and date of every transaction to an electronic journal on an in-store server. Gymboree then downloads this information nightly to a headquarters sever, and uses it to track store sales and generate cost-effective, customer-focused staffing strategies. The 3Com POS network also transmits credit transactions to Burlingame in real time, providing Gymboree with fast, economic credit settlements immediately instead of every two days as in the past.

In addition to launching a US store-wide email system, Gymboree plans to utilize POS data to develop highly-targeted customer loyalty programs based on sales trends and individual customer purchases. The retailer will also use the POS network to track promotions, such as gift certificates, and inaugurate information-based marketing communications, including acknowledging births and birthdays, to strengthen customer relationships.

"Our goal is to link our mailing list to our POS customer loyalty project so we can use it to promote store events," said Notte. "This could not have been done before, but now, using 3Com's open architecture, we can add virtually any new application we choose without buying any new equipment. It's just a matter or prioritizing," he added.

"Gymboree's POS network is a model of how advanced technology can help growth-focused retailers manage customer relationships to improve business-critical services, lower costs and increase profitability," noted Jeff Siegel, 3Com retail industry manager.

Architected for Speed and Reliability

Gymboree's US store-wide POS network emanated from the company's determination to expedite transactions, utilize sales data for marketing purposes and support its expansion. Having previously used a proprietary system, the retailer was hampered by sluggish response times and need to purchase new hardware to add new POS capabilities. To rectify this, Gymboree sought a fast, open architecture, client/server solution.

"We wanted a system that would let us cost-effectively use off-the-shelf products to capture and distribute customer data," recalled Notte. "The system had to be easy to use and require minimal training. Reliability was especially important because we have no technical staff in our stores and downtime results in lost business no retailer can afford."

Recommended by ICL and Harmonics Systems, Gymboree standardized on 3Com for its headquarters and in-store networks. "3Com gave us scalable, reliable performance that satisfied our networking needs from the ground-up," said Notte. "They proved a solid choice from the start, and their systems have fully lived up to their promise."

Now in place, Gymboree's network is a synergy of three vendors' equipment. Along with 3Com EtherLink(R) III network interface cards (NICs) used in ICL/Fujitsu POS 5000 terminals, each store has one 3Com OfficeConnect(tm) shared Ethernet hub linked to a Microsoft Windows NT server. An intelligent Harmonics retail integration module (RIM) provides redundant wide area connections across a virtual private network (VPN) for all credit transactions and communications with Burlingame. There, a 3Com PathBuilder(tm) 8000 access concentrator delivers store data to a switched Ethernet network based on 3Com SuperStack(R) II Switch 3000 and SuperStack II Switch 1000 switches. Gymboree uses a frame relay wide area network (WAN) linked to MasterCard, Visa and American Express and its bank to rapidly process credit transactions.

"3Com is giving us an exceptionally reliable architecture," said Notte. "If an in-store server fails, the POS network still can ring in purchases. If a headquarters server falters, the RIM will bypass it and continue to route credit transactions without a glitch, and if a leased line fails, the RIM will automatically reroute packets until the connection is repaired. I don't think we could ask for better performance."

About 3Com

With more than 200 million customers worldwide, 3Com Corporation connects more people to information in more ways than any other networking company. 3Com delivers innovative information access products and network system solutions to large, medium and small enterprises; carriers and network service providers; PC OEMs; and consumers. 3Com -- More connected(tm). For further information, visit 3Com's World Wide Web site at www.3com.com or the press site at www.3com.com/pressbox.

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