Melin Tregwynt

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.

Learning points

• Superfast broadband can open the potential to more efficient business processes.
• Adoption and use of digital technologies represent an incremental process for many SMEs.
• Digital skills amongst the workforce are important for efficient digital technology use.
• Integration of online and 'bricks and mortar' premises can help to encourage experiential shopping.

Introduction to the update

The first case study of Melin Tregwynt was undertaken in March 2018. This update seeks to update its progress towards digitalisation of its business processes some 18 months later (September 2019).

Overview of the business

The business recognises the importance of intertwining heritage within the production practices alongside contemporary changes in sales and communication:

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 a growing number of visitors and locals to the site.

With 35 full-time equivalent staff (up from 28 at the time of the first case study), 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 business to business (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. The opening of the shop has also seen an increasing number of customer sales resulting from the experiential shopping opportunities offered by the Mill and reinforced by their online shop.

International sales

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% (no change from the first case-study) 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 business’ 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

As of late March 2018, the business 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. This package replaced the previous arrangements, whereby the Mill struggled with low standard broadband speeds of approximately 0.8 Mbps for download and a mere 10% of this bandwidth for upload.

In connecting to superfast broadband, the business, with the support of their IT consultants, have sought to move towards IP telephony. This, however, has faced challenges in transferring (porting) their old telephone numbers to the new IP system, resulting in considerable additional costs.

IT skills capacity

The business continues to employ an IT specialist and project administrator to help ensure the smooth running of projects such as the business’ systems and IT infrastructure. This infrastructure includes computers, laptops and printers. In addition, there is a designated computer aided design (CAD) computer , installed with Photoshop and ScotWeave (textile design program) software. With the support of IT consultants, the business has installed Microsoft 365, and has undertaken staff training. The digital skills of staff vary, however, and are developing incrementally as the business begins to adopt and use new digital technologies.

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. The business is currently reviewing the stock control system (it does not have cloud capabilities) as part of a wider review of its software and hardware requirements in light of the adoption of superfast broadband.

While the arrival of superfast broadband has helped to improve the speed and resilience of its connectivity (it no longer suffers from connection outages) the business owners have continued to make use of its physical server and cloud storage options. This, in part is linked to the presence of legacy systems (such as Genesys) that do not have cloud capabilities, but also the also the challenge of developing staff skills in a busy work environment. There is also a challenge of the wide range of choice of off the shelf digital technologies solutions for a complex business such as Melin Tregwynt.

Customer relationship management

Customer databases form an integral part of the business’ 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 18,000 (up from 17,000 in the first case-study) trade and retailer customers currently live on its databases. Since the first case study this has been subject to a GDPR review to ensure that sufficient opt-outs are included to secure informed consent.

E-commerce

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. E-commerce as a feature of the business has grown substantially in recent years from £57,000 in 2016/17 to £394,185 in 2018/19.

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.

Communication channels

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. Its website has also been developed to include chatbot capability. A graphic-design tool, Canva, is used to edit and add print to social media images, however, this is expected to be replaced by Adobe InDesign in the future.

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. The business owners recognise that the move towards Office 365 reduces the need for separate cloud storage. It has continued to use Dropbox, as important data continues to be stored there.

Melin Tregwynt has continued to make use of digital technologies that respond to international customer requirements  such as WeChat. This is used to communicate with Chinese customers and exhibitors. Recent difficulties in re-signing in to this software, however, exposed the poor mobile connectivity available in the Mill’s location. This process required a onetime passcode, which was not accessible at the Mill. This ultimately required specialised Chinese language support to reconnect their software, highlighting the challenges of operating such services internationally.

Business performance

In the period since the first study the business has continued to grow its sales, with a reported overall increase of 36.9% (to the end of September 2019).  This has seen the greatest increase in eCommerce sales (+25%), followed by mail order (+8%) and shop sales (+ 5.5 %).

In part, this performance has been assisted by efficiency improvements enabled by the addition of superfast broadband. An example of this can be seen in the removal of the challenges faced in syncing with the Genesys stock control platform, enabling the business to have ‘real time’ stock information. This means that it no longer needs to hold excess stock as a buffer, resulting in the reduction to hold up to 10% extra stock. This is a significant change from the last case study.

The growth in sales has further been aided by the introduction of customer WIFI and increased visitor numbers to the shop and café. These changes have enabled the business to increase its headcount to 35 employees.

The business owners recognise, however, that further efficiency gains can be made with the aid of digital technologies. Here, time can be lost when running across multiple platforms (eCommerce, stock control and accounts), as opposed to an integrated approach operating in real time.

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.