Restoration Hardware 2014 Annual Report Download - page 12

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In addition, during fiscal 2014, we entered into a lease in connection with a planned distribution center in
Patterson, California which is approximately 1,500,000 square feet. This new facility will support our furniture
merchandise distribution for our Bay Area and Northwest regions and is expected to commence operations in the
first half of 2015.
We offer a white glove home delivery service for our larger merchandise and furniture categories, where our
delivery personnel assist our customers by delivering fully assembled items to the location of their choice. We
operate portions of our home delivery services in ten key markets to leverage operating costs and improve our
customers’ delivery experience, while reducing returns and damage to our products. We plan to continue to
evaluate in-sourcing these services in additional markets over time, including in 2015, while managing deliveries
in other markets through third-party vendors.
Through expansions and upgrades to our warehousing, distribution and delivery operations, we have
improved our supply chain and fulfillment capabilities, and have built a scalable infrastructure with significant
capacity to support our future growth. We believe our enhanced supply chain and fulfillment operations allow us
to manage customer orders and distribute merchandise to stores and customers in an efficient and cost-effective
manner. We also believe that these upgrades have improved customer satisfaction by reducing delivery times,
reducing damage to merchandise, and improving our customer’s overall buying experience.
We intend to continue to strengthen our supply chain operations through a number of key initiatives in 2015
designed to improve our fulfillment and delivery logistics performance and to achieve greater efficiencies in the
management of our inventories.
Management and Information Technology
We use industry-standard information technology systems to provide customer service, business process
support, and business intelligence across our sales channels. Our technology team continues to upgrade several of
our core systems, including:
• Optimizing and enhancing inventory management capabilities to improve inventory productivity and
service levels across our supply chain;
• Implementing enhanced special order capabilities optimizing processes to support our increasingly
expanding product assortment;
• Upgrading our web commerce and in-store capabilities with state-of-the art technology to optimize
performance and improve the customer shopping experience;
• Implementing supply chain technology and enhancements to support our expanding supply chain
network improving operating efficiencies, accuracy, and service levels; and
• Optimizing and enhancing our enterprise data warehouse platform to expand data analysis areas to
allow more timely and complete analysis of current business trends, results, and comparisons to our
historical performance.
We believe these substantial upgrades to our information technology systems provide management with the
ability to drive ongoing improvement in our operating model, focus on efficiency opportunities, and increase
management control. New access to results through our technology tools also equips management to more timely
identify, analyze and respond to business trends.
Over the next several years, we intend to further enhance our IT capabilities to support our growth. Key
initiatives include:
• Further enhancing our delivery, order orchestration, inventory optimization, procurement, order
management and vendor collaboration solutions to maximize operating efficiencies focused on
enhancing the end-to-end customer experience;
8