Q. Give us a brief history of use of Business Intelligence (BI) tools at Shopper’s Stop. What was the motivation for getting started and how did it get initiated?

Shopper’s Stop started its BI journey in 2003. The need was felt when Shopper’s Stop was gathering a lot of data through its Point of Sale and Loyalty programmes but didn’t use it very effectively for analytics. We were looking for insights based on the information and also a measure as to how effective Shopper’s Stop is in capturing customer’s mind share and wallet share.

We looked around us and realised we were the first ones in India to use BI tools in retail sector. We started with using basic tools, compiling all information related to transactions, complaints and suggestions. We were doing fine but we faced some data quality issues and hence we again went to the drawing board. With planned expansion the customer base was increasing and we needed better tools and technologies with a focus on how to increase the effectiveness of decisions based on data.

We checked what global retailers were doing and understood that the retail analytics market was very fragmented and BI usage was very expensive. Our investments were in dollars but results in rupees. But at the same time we knew that if we didn’t do it now, as we grow, we will miss the bus. So in 2007, we invested around $1 million buying BI tools and decided to go beyond using BI to serve customers and used BI in supply chain and store segmentation. We bought Netezza DW Appliance, Claraview Retail Data Model; Synopsis ETL tool (now called ODI); and SAS for front end and analytics.

So far the ride has been very interesting, topsy-turvy. There are discoveries we have made from customer’s data. When the economy was under the weather, we had to scale down our expenses; but we didn’t close any store. Getting the repeat customers was the trick and amongst others that can be achieved through data warehouse and BI. All this has enabled us to serve our customers in a much more customised manner.

Q. How widely is the tool used in Shoppers Stop? Is it used for managing both: customer loyalty and retail store promotions as well as driving operational efficiency?

When we initiated the whole process, we had our share of challenges. We came out with the reports and the reactions were mixed. Some in our company were delighted with the discoveries we made while others had their doubts. Once we were a few reports old, the question of what next came up. We moved on to segmenting the merchandise, the stores and even our customers. We created a model for almost everything including customers, supply chain, merchandise etc. Our sales promotion, merchandise fulfillment were decided in consideration with the insights from BI. The results and the acceptance have been highly encouraging. Currently, BI uses almost 15% of our IT budget. We’ve already started doing the same for HyperCity and in a few months would be doing it for Crossword too.

Q. How do you compare the use of BI within the Indian retail segment to the more matured and technology savvy western markets?

We’ve benchmarked ourselves globally through formal studies and informal conversations and have noticed that Indian retailers though have a long way to go, are on the right track. Few differences between the western retailers and Indian retailers are in terms of the range of BI tools used as well as the usage of these tools. The usage is very extensive in the western world. There are also matters which are considered more of hygiene factors in the western world, like RFID (and self check-out) and visual merchandise which in India still looks like a far fetched idea. But the good thing is that the technological stability is much higher in India and when it comes to transactional systems, Indian retail weighs over the global retail world.