When Vanessa Iarocci was hired to revive McCarthy Uniforms three years ago, the company’s director of information technology was housed in a dark room at the back of the headquarters in Etobicoke, Ont.
It was an appropriate metaphor for the limited role technology played in the business at that time.
“[He] was hidden in a room with all these computers… in a wing of our building that had no other people,” says Ms. Iarocci, who became president when the original owners bought back the insolvent business from a private equity firm in 2017.
Sales had flatlined. A major customer walked away in 2016 and the business, best known for making school uniforms, was on the brink. Customers were frustrated, and so were staff.
An absence of vision, exacerbated by a lack of investment in new technology, had plagued the family business, which was founded in 1956 and sold to private equity in 2008.
“It was frustrating,” says IT director Kisan Shrestha, who watched the business erode as the company failed to adapt to the digital marketplace.
At one point, one of the retail stores could no longer function because its technology was so out of date.
“It was a mess,” Mr. Shrestha says. “It was always hard for me as the IT leader to go and ask the leaders of the company for investment.”
With a background in digital innovation, Ms. Iarocci was brought in specifically to reimagine the business for the modern marketplace. With the support of chairman Martin McCarthy, her first year was spent creating a new vision and digital strategy.
One of her first moves was the physical relocation of the IT department to the main office. The company then began investing in technology that would help it better serve its customers.
Since then, McCarthy Uniforms has opened two new permanent retail locations (one in Burnaby, B.C., and another in Oakville, Ont.), hired more than 100 employees and launched a mobile uniform team with permanent staff that can provide pop-up service from coast to coast.
All of the McCarthy Uniforms’ locations have been rebranded and redesigned to optimize customer experience through features like express lines and more sophisticated point-of-sale terminals. Altogether, the company has 12 permanent retail stores and 19 permanent locations within schools.
The website was also redesigned to streamline the purchase process. Each customer was provided a custom store with its own URL. The photography is more professional and online ordering more intuitive.
“That’s the obvious technology innovation in retail – the e-commerce platform,” Ms. Iarocci says.
One of the improvements was as easy as putting a button at the online checkout allowing customers to order multiple items. Because of the seasonal nature of school uniform sales, one-click ordering drastically reduced wait times during peak traffic, in some cases from three hours to seven minutes.
Another simple digital shift was integrating the company’s ordering system with the Canada Post mailing system. By combining those into a single process, the workload was cut in half and the mailing process became more accurate.
The next step was to use technology to open up new opportunities.
For example, the company launched a rewards program, which enables schools to earn a percentage of sales of the company’s products as a fundraising tool.
The company also diversified its products beyond school uniforms.
A request for proposals for public-service uniforms prompted Ms. Iarocci to research public-service purchasing.
While McCarthy Uniforms is one of the largest providers of school uniforms in Canada, it’s not the biggest player in the uniform business.
Ms. Iarocci knew they would need an edge to compete for workplace-uniform orders.
By reaching out to public-service purchasing agents, Ms. Iarocci discovered their main issues had nothing to do with uniforms themselves.
“They were literally still manually making names of workers, manually making uniform allocations and then keeping track of uniform distribution through a ticking-the-list mechanism,” she says.
She and Mr. Shrestha came up with an automated voucher system that would track orders and employee distribution for clients. They hired a User Experience designer, and, within a month Mr. Shrestha built a platform that could be managed from a mobile phone.
“Within nine months we actually created a whole new business line at McCarthy’s, and we secured some pretty major broader public-sector uniform customers,” Ms. Iarocci says. “We’ve won all that business on the strength of our tech.”
In mid-2018, most of the digital innovations were implemented. By 2019, the company had seen a 30-plus-per-cent increase in revenues and was in the black.
McCarthy Uniforms 2.0 (or “MU 2.0” as the company calls it) now has approximately 450 customers, including 21 of Ontario’s school boards.
Despite such success stories, Canadian businesses remain slow to adopt in new technology, says David Wolfe, co-director of the Innovation Policy Lab at the Munk School of Global Affairs and Public Policy at the University of Toronto.
“There isn’t a single industry that’s not being touched and affected by digitization, from agriculture and mining, to autos to design and fashion, to financial services,” Mr. Wolfe says. “And if firms aren’t taking advantage of it, they’re at risk of having their whole business model upended.”
Adopting technology is difficult for mid-sized businesses because it’s expensive and time consuming, Mr. Wolfe says.
It also requires training, in which Canadian firms also tend to under-invest.
“You can’t throw a digital technology into an existing work process or form of work organization and expect everything to be exactly the same as it was before,” Mr. Wolfe says.
There’s also an element of risk when it comes to implementing a technology strategy, says Ms. Iarocci.
“You have to have the stomach for wanting to make the investment and having a long-term view,” she says. “It can be hard to accept a one-year dip in earnings to take a risk on the future.”
The advantage for small- and medium-sized business is the ability to move quickly for less and scale up, Ms. Iarocci says.
The changes made at McCarthy Uniforms – sometimes within months – would take much longer at larger organizations.
“Our business has grown substantially,” Ms. Iarocci says. “In three years, we’ve turned around the business and also taken it to the next level, which is pretty exciting.”
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