In the year 2009, the senior management at HyperCITY, India's leading hypermarket, had a difficult issue to deal with. With growth in its customer-base, the retailer was forced to buy and stock more number of and a greater variety of products. But it led to piling up of unsold stocks at several stores due to frequent fluctuation in demand.
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Transferring stocks to nearby stores for liquidation meant extra costs on manpower, transportation, and transit-storage, making it a commercially non-viable option."Unsold stocks was a serious issue in case of perishable items like fruits and vegetables. Stock-transfer could be a temporary arrangement; not a long term solution. The ideal way for us was to ensure that every product stocked at a store was sold out from the same store," says Veneeth Purushotaman, Business Head - Technology at HyperCITY Retail India. That is when the company decided to implement a retail store management system to facilitate speedy introduction of store-specific promotions to dispose of unsold stocks.
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HyperCITY Retail India's CEO Mark Ashman describes the challenge: "Retailing is very very simple; we buy products from someone and hope to sell them for slightly higher prices to somebody else. It gets complicated when we have to offer personalized shopping experience to a million customers selling over 40,000 products at 12 locations. We have to introduce promotions at different times of the day, run different promotions at different stores, and put different promotions together for different groups of customers."
Till then HyperCITY used JDA’s retail point of sale (POS) solution. But with growth in business, the existing product could not continue to meet its speed- and flexibility-requirements, creating a need for a new solution. The company evaluated several retail store management system brands including Oracle, Retalix, and L S Retail before finalizing on Oracle Retail Solution. Oracle's suite scored better in terms of technology road map and flexibility to dynamically launch store- and product-specific promotions with speed.
The retailer’s implementation journey with Oracle was not smooth initially. Although the project began in 2009, it came to a halt within a year with the deployment partner failing to deliver as per the business-needs. On Oracle's intervention, HyperCITY roped in Infodart Technologies India, an Oracle Gold partner with knowledge of retail vertical, to resume the work. The failed project created a demanding situation for all stakeholders--HyperCITY's IT team, the vendor, and the implementer. "HyperCITY’s project came to us as a challenge; one more failure and it would have been abandoned," recalls Pramod Kapoor, DGM - Delivery Head, Infodart. Following this change, HyperCITY took about two years to customize and roll out the retail store management system.
Cost and usage
Since Oracle’s retail store management system works with any hardware, HyperCITY could continue to use its existing POS terminals and accessories. The retailer spent about Rs 5 crore to acquire the perennial license of the Oracle software.
The new Oracle application is primarily used by the buying and merchandizing teams to set up new campaigns and monitor their success. The system is being used by over 100 users at each of 12 HyperCITY stores. This includes cashiers (60%), store managers (5%), store backend staff (5%), corporate users (20%), and IT users (10%).
- As its biggest benefit, the new retail store management system allows the HyperCITY managers to introduce multitudinous campaigns specific to stores, products, shelves, or customers. Earlier the merchandising team took about three days to launch a new campaign. With Oracle retail store management system, the retailer can introduce several store-specific promotions on the same day.
- The quick and targeted marketing have helped the retailer to replenish its stocks with speed. This has resulted in optimized utilization of working capital and correspondingly improvement in the company’s bottom line.
- The retail store management system has also helped HyperCITY to optimize the start-of-day and end-of-day cash and inventory assessment by reducing the number of processes involved.
- As Oracle Back Office (ORBO), a component of the suite, helps cut down the time required for checking the store inventory at the time of billing, it has speeded up the billing process.
Purushotaman's team is now looking at integrating the retail store management system with HyperCITY's home delivery and loyalty program apps. The road map also includes the system’s integration with Web-based customer relationship management application in future.