Established in 1912, the third-generation family run business captures the ‘spirit of Wales’, by offering upmarket and authentic Welsh woollen products that are manufactured using traditional processes of production.
- Businesses can attain digital maturity without superfast connectivity, but with constraints.
- Digital technology alongside market knowledge can help develop important networks overseas.
- Operating integrated platforms in real time is increasingly important for business efficiency.
- Off-the-shelf software can augment business performance, streamlining business processes.
Overview of the business
The multifunctional business portfolio extends beyond manufacturing, to encompass sales, retail, hospitality and increasingly tourism. This includes the opening of an onsite café in 2017, attracting visitors and locals to the site.
Melin Tregwynt recognises the importance of intertwining heritage within the production practices alongside contemporary changes in sales and communication:
With 28 full-time equivalent staff, Melin Tregwynt is one of North Pembrokeshire’s biggest employers. These staff are distributed across the production line, as well as undertaking roles in research and design, onsite sales and retail, and administration and accounts.
At the heart of the business operations is the woollen mill, supplying shops, designers, specifiers, architects and hotels with a very distinctive range of woollen blankets, throws and cushions, together with upholstery. Sales of the products derive from onsite retail, e-commerce and B2B clients.
The business benefits from a range of clients and markets, including retailers and high-quality upholstery for aerospace, automotive and office furniture. Trade shows and face-to-face client meetings form a continued part of the businesses’ practices, recognising the importance of retaining traditional and online communication channels.
Despite the mill’s rural location on the outskirts of Fishguard, Melin Tregwynt sells its products locally, nationally and internationally. The business stands out as one of the limited number of international producers in Wales, with 25% of sales coming from exports. The key markets include Japan, China, the United States and to a lesser extent continental Europe.
One reason for the businesses’ continued success is its ability to establish unique and differentiated selling points that appeal to new markets. Learning from the appreciation Japanese consumers attach to the heritage and Welsh identity underscoring the product, the business owners were able to replicate this niche offering to appeal to the Chinese market. The owners understand that Chinese consumers are moving beyond big brands and looking for hidden, secret, special, unusual and differentiated items that you can’t get anywhere else.
Superfast broadband adoption
Up until March 2018 (when the research was undertaken) the West Wales based business struggled with low standard broadband speeds of approximately 0.8 Mbps for download and a mere 10% of this bandwidth for upload. The outlays for the standard broadband totalled approximately £50 per month plus £25 for the line rental. The business has experienced a number of superfast broadband adoption barriers, with its area being among the last to benefit from the Superfast Cymru initiative. The problems were exacerbated by the lack of mobile signal for the area.
Previously, the business had benefited from the WASP Welsh Government initiative that brought temporary faster speeds through an ADSL line, allowing for speeds up to 24 Mbps. However, these were deemed hugely expensive and unsustainable once the initiative came to a close.
As of late March 2018, the business has gained superfast connectivity. The adoption costs included £180 for an initial survey, and outlays of £55 per month for guaranteed 80 Mbps speeds. The broadband package has the option for ultrafast speeds up to 300 Mbps to meet the businesses’ future connection needs.
IT skills capacity
The business employs an IT specialist and project administrator to help ensure the smooth running of the businesses’ systems and IT infrastructure. This infrastructure includes computers, laptops and printers. In addition, there is a designated computer aided design computer (CAD), installed with Photoshop and ScotWeave (textile design program) software.
In the near future, the business aims to invest in an additional CAD computer. It is estimated that the business spends up to £17,450 a year on IT services and a till hardware annual contract.
Use of digital technologies
A number of business processes are augmented by the use of digital technologies. These include the use of CAD and Photoshop for the businesses’ catalogue and internal graphics. Stock control is also managed using bar code readers, which is compiled in the stock control system (Genesys) to record and measure margins. Previously, a third-party contractor was hired to develop a system that would quantify every inch of stock and reduce product waste. However, the bespoke process was considered cumbersome and rigid, therefore the business continues to favour a straightforward approach that allows for alterations as appropriate
At present, Melin Tregwynt continues to rely on an internal server and hard drives to back up its data. However, once greater broadband speeds are attained they plan to move toward cloud-based storage. The data storage requirements range from graphics and designs to client databases and mailing lists. The storing of data is also being reformatted to meet the requirements of the GDPR (General Data Protection Regulation).
Customer databases form an integral part of the businesses’ customer relationship management (CRM). As part of its sales operations, Melin Tregwynt utilises an external company to manage and send its promotional material to the 17,000 trade and retailer customers currently live on its databases:
E-commerce is an important sales feature, attracting B2C and B2B clients nationally and overseas. E-commerce is operated through the businesses’ website, with different platforms available for national and international customers. The business uses a do-it-yourself website template provider (Squarespace) to manage the customer interface, and an e-commerce open source platform (Magento) to manage the back-end sales processes. Currently, analytics only extends to access of the businesses’ newsletter, however, it is hoped that the facilities on Squarespace can be used to analyse the website data in the near future.
Melin Tregwynt uses three platforms to manage its key business activities, namely Magento for e-commerce, Genesys for stock control, and Sage for accounts and finance. While connections are drawn between the three systems, the business is looking to purchase an off the shelf package that combines and maximises the benefits of each. Again, the decision to move away from an enterprise resource planning (ERP) approach speaks to the recognition that off-the-shelf platforms can be designed to aid efficiency and streamline business processes.
Digital technologies augment the internal and external communication channels. When marketing its products, Melin Tregwynt uses multiple social mediums, including Facebook, Instagram, LinkedIn and Twitter. A graphic-design tool Canva is used to edit and add print to images that are used on the businesses’ social media platforms.
Cloud-based storage accounts, such as Dropbox, are used to send promotional graphics for press releases. These folders can contain multiple high-quality images, as opposed to selecting isolated shots.
For B2B communications video-conferencing, for example Skype, is becoming an increasingly important tool. Moreover, once higher bandwidth is attained, the business will be looking to switch from its seven existing telephone lines, to internet voice communications obtained through Voice over Internet Protocol (VoIP).
Melin Tregwynt adopts digital technologies that respond to international customer requirements. One example is the use, and proposed extension, of a WeChat account to communicate with Chinese customers and exhibitors. WeChat is a multiple purpose social media app, with built-in functions that allow Chinese customers to make instant payments through a QR code. Chinese customers are moving away from PayPal and credit cards and using WeChat for payments. To respond to these demands, the business aims to install a WeChat terminal in the shop once the higher broadband speeds are attained.
Despite the superfast broadband adoption barriers, Melin Tregwynt operates as a largely digitally mature business, using a range of digital technologies. The benefits of these technologies can be seen in the terms of the delivery of high-quality and niche products, a national and international customer base, and enhanced internal and external communications.
However, the pitfalls of standard versus superfast connectivity for business performance are highlighted by the case study. One important pitfall is reduced efficiency, with time being wasted when the internet connection is lost. The business experiences a connectivity blackout most days between 4:30 to 5:00pm, coinciding with the time that the platforms are running daily backups. This impedes the business processes and causes frustration for staff. In many instances, the business owners work from home after 4:30pm to allow emails with attachments to be processed.
The daily syncing of platforms, such as Genesys for stock control, causes problems beyond reduced functioning for internet enabled tools. When superfast broadband is adopted the business will move from daily syncing to real time updates. At present, the lag between the real time stock quantities and the previous update means that the business needs to mitigate for potential sales and stock extra products. It is estimated that approximately 10% of the stock held in storage is held as a buffer:
Time is also lost when running across three platforms, as opposed to an integrated approach operating in real time. While fully integrated systems are costly, estimated at twice what is currently paid for Genesys, the business owners consider they might be better off for the outlay:
In addition to current losses, the adoption of superfast connectivity provides future opportunities. One example looks at attracting walkers passing along the Pembrokeshire Coastal Path. In addition, the onsite café would benefit from accessible guest Wi-Fi, allowing visitors to access emails and social media:
Further areas of advancement include greater use of video conferencing, a move to cloud-based storage, enhanced WeChat adoption, as well as streamlining of business functions. These areas for advancement will be monitored over the remaining three years of the project.