The Role IT has to Play in the Ever-Changing World of Retail
Oleg Leksin, Head of IT in Fix Price
Oleg Leksin, Head of IT in Fix Price
Today, IT plays an essential role in many different industries, and retail is no exception. Technology is instrumental to logistics, inventory management and demand prediction. It delivers cost efficiency and acceleration across all business processes, from recruitment to sales. Technology is a powerful way for businesses to scale up quickly without wasting time and money, even in the extreme circumstances of the pandemic.
Responsibilities of IT departments now go beyond ensuring uninterrupted and safe operation of all the key systems. They include continuous updates to algorithms to save time and resources.
Fix Price is one of the global leading variety value retailer with stores in Russia, Belarus, Kazakhstan and other countries. Despite booming online salesin the retail industry, Fix Price has been actively expanding and is now one of the fastest growing brick-and-mortar retail businesses. Its revenue increased by 21.3 percent and the number of stores reached almost 5,000 in 2021. These high growth rates were largely powered by IT systems, which helped the company respond promptly to the modern challenges – lockdowns, global supply chain disruptions and changes in customer preferences.
IT systems used in retail today can be broadly divided into core and supplementary systems. The former are crucial for the development of the company business and the latter help improve and speed up existing processes.
Core systems for decision-makin
Using SAP system with Oracle databases gives us a competitive edge, which helps the company grow and adapt to the changing retail landscape. With this solution, we are able to streamline the entire distribution cycle, financial flows from operating activities, and accounting. SAP has been the core ERP system for Fix Price since its inception and has been permanently contributing to the Group’s high performance for almost 15 years. It is scalable and has been regularly updated to meet our needs. For example, we are about to finalise a project to introduce FI-FM, a SAP sub-module. It is designed to allow control over budgeting all revenues and expenditures, monitoring future funds movements against the available budget, and preventing budget overruns.
There is also a QlikView Business Intelligence (BI) system, which has been in place at Fix Price for over ten years to support the work of its key employees and top management.
The software combines data from various sources and proves handy when it comes to business analytics, operational management of key indicators, reporting and dashboards of the Company’s functions. It gives the management a real-time picture of business performance and risks.
In 2013, Fix Price rolled out OpenText, an information management tool to enable shared online access to documents. By migrating to the EDI, we were able to accelerate approval timelines and fully streamline corporate communications.
Fix Price also uses WMS Logistix integrated with SAP to control process operations across its eight distribution centres.
Supplementary IT systems for decision-making
Creating tools to automate routine processes and replace human labour with technology where possible is a priority for an IT department of any modern company. At Fix Price, we have created and regularly updated software to support the Group’s supply chain. It helps automate routine supply operations, including import management, customs support, transport management, certifications, calculation of estimated and actual costs, and creating orders in SAP.
To ensure efficient stock control, we integrated into SAP a proprietary demand forecasting tool. It is designed to automate restocking based on the relevant parameters.
Also, several years ago, we introduced a mobile app for our store staff and management. We are constantly expanding and upgrading it to streamline and automate current business processes. For example, in 2021, we added new features such as handing out online orders, writing off defective stock, analysing data on unpopular stock, and submitting maintenance and repair requests for in-store equipment.
Customer service improvement
Shortages of line personnel in Russia have forced all retail industry players to look for new solutions. Last year, we implemented a pilot project to roll out self-service checkouts at Fix Price stores. It proved to be a success so, starting 2022, self-checkouts will be available in all our new stores in Russia. The main objective is to reduce workload on our employees at peak hours and increase throughput at our stores by making shopping faster. During the pandemic, these self-service checkouts help minimise contacts with store staff, given that only cashless payments are accepted.
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Technology is a powerful way for businesses to scale up quickly without wasting time and money, even in the extreme circumstances of the pandemic.
Also, we have introduced QR codes to enable payment via the Faster Payments System (FPS) at checkouts. The system is designed by the Bank of Russia to let Russian make free instant bank transfers. Most Russian banks are currently connected to the FPS. Our customers can now make payments via any bank’s app by scanning a QR code at a checkout. Bank fees on these transactions are lower than acquiring fees, which is beneficial for the company.
Against the backdrop of a fast-changing retail landscape, IT departments have to constantly improve available IT solutions and focus on agility, scalability, greater stability and security of IT resources, on the one hand. On the other hand, they also need to learn to innovate quickly and accelerate time to market. This can be achieved by embracing DevOps principles and engaging contractors with extensive project and industry expertise.
