With 100% growth, Bestseller India sees need for more tech innovations
With 3,000 stores across 38 markets worldwide, Danish fashion brand Bestseller is at the top of its game. Fast, affordable fashion is gaining more traction globally, but its growth momentum is stunning in India, where it has been expanding dramatically in the last few years.
Bestseller India CIO Ranjan Sharma said the rate of business was growing last year at 100 percent year-on-year. Managing this growth is a big challenge, but the "beleaguered" CIO is more than happy to find solutions through technology and innovations.
"We want to focus more on the processes that would strengthen the organization, rather than just keep growing and create a sound platform to grow further," he said.
What Sharma and his team needed was a real-time and scalable solution to match the unprecedented business growth.
"We used to be a simple IT organization, but it was becoming difficult for us to manage everything centrally sitting in Denmark - the first in terms of flexibility, and the second in terms of the speed," he said.
Migrating to the SAP HANA Enterprise Cloud solution to manage the needs of 27 diverse states within the country, Sharman's team has a new ball game on its hands - creating a platform for scaling up, bringing more agility to deliver more solutions, and being able to respond to market demands much faster.
The CIO disclosed that the rapid business growth had created a lot of gaps in the organization in terms of delivery of technology. The decision to separate the application landscape of the India operations is part of the move to be more agile.
"We could focus more on the retail landscape and Denmark will focus on both the retail and wholesale channels," he said. The brand is, however, eventually looking to adopt a complete retail system to serve worldwide needs.
Greater online push, more operational efficiency
Sharma said Bestseller's business in India is 100 percent retail and it has three distribution channels - its own stores (70 percent), the shopping channels in large web stores (22 percent) and the online channels where it is working with partners (8 percent).
The ideal scenario, according to the CIO, would be 40 percent shopping shop and online channels and 60 percent brick and mortar stores. "We are pushing more the shopping shop and online channels," he said.
More than this, however, is the need to make the operations more efficient than ever. The ERP system it has recently implemented is more geared into looking at the supply chain benefits and how the stores could deliver more on the replenishment side.
"We are looking at how we can bring it much closer, how could we help the finance (department) to do the monthly closings much faster, how we could get them to deliver the reports much better. If you look at the conventional way reports are being delivered on SAP, most of the reports could be delivered in the ERP. You would be able to do so much working around the operational reports," he explained.
On the replenishment side, he said they are now getting Point-of-Sale (POS) data every 15 minutes. "The question we ask is: Is there a possibility for me to improve my supply chain and get that data faster into the ERP so that I can process it? Our retail space is very premium space. If I can reduce the storage and back store space by at least 10 percent to make it a saleable area, that would deliver benefits and bring a lot of business value," he explained.
Claus Andresen, VP, Head of Solutions & Practices for Asia Pacific & Japan at SAP, affirmed that the retail industry has innovated significantly over the last couple of years; it has become more an exercise in developing an experience for the customers and less so about buying products.
"The whole experience notion is so around data - instant data, real time data and so you could make informed decisions and ask informed questions to the customer base. Hana is enabling that business vision," he said.
Growth and market opportunity
For Sharma, it is not just about the growth factor alone, but also the maturity of the market and the opportunity it presents.
The India market, he said, has a young customer demographic from 18 to 28 years old, middle and upper class and very much tech savvy. A key challenge is providing them the experience and the freshness to keep them engaged.
"Every week we have a fresh launch at the store because an average customer comes to our stores twice maybe in a one and a half months, which means they need to see new products every time they come to the store," he said.
An important area that the team is now looking into is creating a total view of the customers - from the physical store to the online stores. The goal is to be able to connect all the dots in the online and offline space.
"The biggest challenge we have today is that we do not have an online presence. We are riding on the back of partners. That's something we need to figure out and understand more how the whole ecosystem works," he said.
Another step he said is making inventory more efficient and understanding customers' buying patterns better. The key thing for any retail technology is how it can enable the retailer to engage with customers and connect with customers on any platform, and how can it empower store employees to support the customer, as well as to cross-sell and upsell.
His advice to up and coming retail organizations, especially in the developing world: "Do not spend too much on architecture. You need to be flexible, you need to be listening. Rather than becoming an isolated IT department, you should start becoming part of the business organization."