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Case Study Of Fortnight

Q: Tell us something about the business of your company?

HyperCITY is one-of-a-kind, retail format from Shoppers' Stop, a leading retail chain in India owned by the K Raheja Corp, in order to diversify and capitalize on the immense potential for hypermarkets. HyperCITY is a hypermarket in the true sense and offers its customers a dominating assortment of quality products at great value in a large, modern and exciting format. It provides a truly international shopping experience by offering wide and contemporary range of innovative products, sourced from both local and international markets. The product range varies from foods, home ware, home entertainment, hi-tech products, appliances, furniture, sports, toys and clothing.

Q: What kind of business applications/ IT infrastructure are used at your company?

JDA's Merchandise Management System, JDA's WinDSS for Point of Sale, Peoplesoft for HRMS and Attendance, Oracle Financials for Accounts and Finance reporting, SAS for BI and Analytics, Netezza for Datawarehousing solution, JDA's Intactix for planograming, E3 for Advanced Auto Replenishment.

Q: What was successfully implemented? Describe the project or initiative and the solution you deployed?

A Customer engagement program called the "Discovery Club"; a combination of loyalty program which is unique in the way it rewards customers, an innovative solution for creating shopping lists and a kiosk based customer access interface. The entire package was designed and completed on time to be launched on a pre-determined date in record time of 30-45 days.

At a time when customer spending appetite was lowest, as a retailer the biggest challenge was to get enough customer entry to store and then make them transact. Food being the major contributor to the top line at HyperCity, the opportunity was to convert the Food-shoppers to buy from other categories like Fashion, Home needs etc. This was possible by offering right kind of promotions, product adjacency and cross merchandising. All this was only possible by tagging customer purchases and analyzing the purchase patterns thereby profiling the customer.

While launching a loyalty program was the only way to address the above, it was important to make the program unique to differentiate from any-other retail loyalty program. The differentiation was required to ensure that such a program was feasible to the hypermarket business and more importantly interesting enough to the customer.

Q: What was the IT / business challenge faced that led you to this project?

It was important to know who your customers were and to track the customer buying behavior during the tough market conditions that prevailed. The ability to understand the customer behavior helped the buying team to buy right and to offer the right kind of offers to the customers.

Q: What IT solution / product / strategy was planned to overcome the above business challenges?

    The solution had 3 broad components:
  1. The Loyalty Management System – This was designed and developed internally by the business technology team working alongside the business teams. The solution had to address the customer enrollment, point accrual, point redemption and customer data management. The point accrual and redemption modules were parameterized to give flexibility to the business in trying out various kinds of promotions while setting up point accrual as well as point redemption rules.

  2. It is built on the I-Series platform and coded in RPGILE on DB2.

  3. Kiosk based Customer Access – As we designed the program we realized that communication to the customer on the points, promotions and benefits was critical. This being different from the usual purchase led programs, it was critical that the customer got visibility of points and benefits at all times.

  4. We therefore decided to bundle the go live with a Kiosk based program where the customer could swipe the card and get all information regarding the promotions and his point balances and also offered an innovative solution 'Shopping List'. The 'Shopping List' feature allowed the customer to create his own shopping list via mobile (SMS) or the web and print it from the kiosk when he visits the store.

    The kiosk also doubled up as a customer feedback channel and a channel for promotions when idle.

    Kiosk is on a .net platform with some of the components of Shopping List using Java. The Kiosk hardware is from IBM.

  5. Web based Customer Online Access – we also had the Discovery Club Login page incorporated for customers to login online and see their profile, points and promotions. He could also create his shopping lists online.

Q: Scope of the project – geography, no. of users, systems, timelines for project execution from signoff to go live, etc?

The total time taken to rollout out the Customer Loyalty System, Kiosk based interface and the customer online access was 30-45 days.

Q: What were the business benefits generated / derived from the project / deployment? Any significant & measurable impact on business? If so please provide quantifiable numbers wherever possible. Please describe the financial return and measurable payback. An overview of the quantifiable benefits that underscore your project's success?

Before the deployment of the loyalty program we had no visibility to the customer's basket and his purchase behavior. We knew the 'What', 'Where' and 'When' but not the 'Who' of the customer transactions. In Retail the most important information is the 'Who' and what the loyalty program did was to give a 'Face' to these transactions. Post the deployment we are now able to analyze the customer buying behavior to design better promotions.

We now have over a 100,000 Discovery Club members and we now know that they contribute to over 35% of the total sales. The average cash memo size of the Discovery Club member is 15% more than the walk-in customers. We also see that at least two-third of our loyalty customers visit us at least once in a month. This shows that the program has helped in increasing the customer share of basket. These insights have also helped the Buying team in designing appropriate promotions for our customers and the Marketing team to have more targeted promotion campaigns.

Q: What was something indigenous or radically different about the project or initiative?

  1. The program was unique in the way it rewarded the customers and different from any other retail loyalty program
  2. The Kiosk based Shopping List feature was the first of its kind and was a differentiating factor
  3. The program was also unique as it was a self funded program

Q: Any other information you would like to share?

Customer data is a gold mine of information for any industry, particularly in Retail where this data can be used to not only to be in touch with the customers but the retailer can use this data to drive customer insights and make the business profitable. With data on the customer available to the extent of the last purchase made, the retailer can afford to invest in BI and analyze the data to profile the valuable customers, tag them based on their RFM (Recency, Frequency, Monetary Value) model etc.

IT helped in enabling the business to drive customer insights by designing, developing and going live with 3 different components in 30 days.

IT also worked with the business in making the program accessible to the customer by providing not just the Kiosk interface but also an online interface from the first day.

With majority of the development being done in-house the total cost of the project was also under control and within the budget.

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