The big picture
I cant imagine Spencer retailing without IT
went all the way and deployed a BI solution rather than analytical CRM. K
Radhakrishnan, Vice-president, FoodWorld Supermarkets, talks to Deepali
Gupta about IT and its importance to the company.
BI in FoodWorld
Is CRM the only way to ensure analytical capabilities
in your enterprise? Here we take a look at FoodWorld which decided to
take the BI route
Analytical CRM is not always the ideal solution if you dont
need customer specific analysis.
Do you have a Customer Relation Management system in place?
FoodWorld does not have a CRM because we dont track
discrete customer data. We dont have a loyalty programme. You need discrete
data only if you have a loyalty programme. We dont actually need to target
age groups or specific people. Not that it is not important, but at this point
in time, its just not required, because it is not so difficult to guess
that wrinkle-free creams will not be used by 18-year-olds, and also that the
Frito Lays Chaat Street range of potato chips will most probably be consumed
by youngsters. So if I see an 80-year old buying it, I dont need to start
aiming the product at that group.
Setting up a loyalty programme is not easy. I cant
initiate a loyalty programme when I am still dealing with availability, and
30 percent of the time it is out of stock. A loyalty programme can only work
when all else is in place. You dont do a drive like that because you want
to make money on some small-time tie-up or for cosmetic reasons.
Besides, there is also surrogate information. We do market
research, and the FMCG companies do research too. When the product line is created,
the manufacturers themselves align it to people.
What is the kind of data requirement that led to an investment
in a data warehouse for FoodWorld?
The category data is good enough. I dont need to know the person who has
bought to see what customers have bought. I see movement in category data. Thanks
to this solution the composition in our stores is different from the composition
of other stores in the market. For example, the second-largest selling biscuit
in my store is Jim-Jam, and it will never feature among Britannias top
20 biscuits. The largest-selling detergent is Surf ExcelMatic, yet it will never
feature as one of HLLs top products. So I know by category how a product
moves, I know the elasticity and how the promotions workwhich is enough
at one level.
For that, we capture data at the source. There are two kinds of data. One is
that which comes from the suppliers, and the other at the sales counter. So
we track goods we take in and goods we give out. The data is stored in our Oracle
database and MicroStrategy data warehouse.
How do you come up with sales promotions?
We look at the data. Take ketchup, for example. I have a
monthly calendar. At one time, if I want to push a large quantity of it, I get
promotions done on the one-kilogram bottle. Now nobody will buy two big bottles,
but they may buy two bottles of 500 grams each, so I do what is called multi-packaging.
There are many promotions we do, which are IT-enabled, based on datahour-wise,
store-wise and so on. For that, my system should be able to throw up all my
KPIs (Key Performance Indicators) two days before it actually happens, instead
of waiting for the month-end. I need the capability to drill the information
and find which store, hour or day against which product is the sale happening.
How important is IT to the retail business of FoodWorld?
How extensively do you use the data warehousing system, and are you worried
about system upgrades?
I cant imagine Spencer retailing without IT. I am brain-dead without IT.
I cant receive the product, sell or even analyse it. However, we use little
of business intelligence and what we do use, we have put in place over the last
year and a half. I am not sure I am concerned about obsolescence when I am using
about 3.5 percent of the system. An older version is not a problem as long as
it fulfils the requirement.
The reason for the underused IT infrastructure partly is due to the lack of
people. You need to cull out a separate section (what is defined as an analytics
department), and we are working on that.
How do the Global Data Synchronisation Services help you?
As a system, it is a platform for FMCG companies to push
updated product information to retailers such as us. It is the first service
of its kind in India, so we can only talk speculatively, referring to what foreign
companies have seen.
The first thing is if I were to remove data misalignment, my availability will
go up. Out-of-stock situations may go down, which means greater availability
for customers. Stocks may be lower, which means I have to keep less stock, but
the sales remain the same. As a retailer, I will make more money that way. The
biggest advantage is the alignment of my master with that of the FMCG company.
Deepali Gupta can be reached at