Desigual benefits from worldwide Business Intelligence with Board
Fashion retailer Desigual began trading in 1984, led by the slogan 'Desigual, it's not the same'. In recent years the company has recorded sustained annual growth over 50% and employs a team of more than 3,000 people from 83 different nationalities. Desigual closed 2010 with a worldwide presence of 200 own-brand stores, 7,000 multi-brand clients, and 1,700 concessions in major department stores, selling over 15,000,000 garments and reaching a turnover of €440 million.
The selection process: Rapid development, flexibility, and low TCO
The process of selecting a Business Intelligence tool began in 2005 when the growth forecasts of Desigual and an increase in management complexity highlighted the ineffectiveness of the company's legacy transaction reporting system in coping with growing analytical requirements. The main need was to control sales performance and carry out timely commercial analyses on the different existing channels (Retail, Wholesale, and Department Stores), with a view to the growing internationalization of the firm's business activities.
The reasons that prompted us to choose Board at the time are exactly the same reasons why we continue to prefer it over every other tool on the market: total cost of ownership, flexibility to change, and a time-to-solution that none of its major competitors can match. In particular, one of the main aspects we considered was the ease with which Board could adapt to changes in our business model. In the immediate future these changes include the replacement of our ERP system and the opening of new sales channels, in addition to the expansion of existing channels.
The Board project: Unified sales intelligence, supply chain monitoring, and loyalty card analysis
Desigual began implementing the Business Intelligence project in its sales area. The aim was to analyze and monitor business performance on a varied channel composed of:
- 200 single-brand stores (Retail)
- 1,700 department store concessions
- 30 franchisees (Franchising)
- Over 7,000 multi-brand clients (Wholesale)
These were distributed in over 70 countries on five different continents. Using a standard data model in the fashion industry - based on item (color/size), sub-families, families, and collections - data is analyzed with special attention paid to organic growth, such as the evaluation of increased sales (excluding the contribution made by the opening of new stores in the case of the retail channel, and by the acquisition of new client stores in the case of the wholesale channel). Depending on which channel they are carried out, the organic growth evaluations are on a daily or monthly basis. For single-brand stores, they also carry out evaluations over much more restricted time frames. For example, Desigual performs an hourly analysis of the footfall-to-sales conversion ratio to accurately evaluate the level of service provided to customers and the performance of sales staff in each individual store.
The analyses also extend to demand planning and distribution to sales outlets, as Desigual's official source continues:
Although we use TXT to manage replenishment activity, all monitoring of stock and coverage in stores is carried out using Board. Board gives us a precise, up-to-the-minute overview of the entire logistics flow at any given time. From materials still to be ordered, to material on order from the various suppliers, to material in transit from the hubs and logistics centers, to material arriving in the stores: everything is kept under constant control with the aim of anticipating stock-outs and any other issues along the supply chain. In this way, we have full visibility at individual store level, not only of in-stock quantities, but also of goods arriving and their corresponding delivery times.
Another important area of analysis is customer base segmentation, which is analyzed by means of Loyalty Cards.
In this area, we adopted a matrix approach, dividing our customer base according to two dimensions: average spend and frequency of purchase. From this, four macro-segments were identified (High frequency, High spend; High frequency, Low spend; Low frequency, High spend; and Low frequency, Low spend) on which we carry out the classic master data analyses regarding age group and sex, correlating them with the dynamics with which customers move from one segment to another, become 'sleepers', or are lost (churn rate). Throughout this entire series of evaluations, Board supports us perfectly, both in terms of the flexibility and ease with which analyses can be created, and in terms of performance. This enables us to easily and rapidly handle data volumes that can reach 62,000 item/size combinations in a single infocube, on over 850 points of sale and for a daily stock sizing of around 2.5 million records.
With Board, data from the points of sale, SAP, TXT, and from custom products for warehouse and order management is collated and standardized in a single information base.
Thanks to the complete integration of the product, this enables us to handle reporting, interactive dashboarding, data analysis, simulations, and ad-hoc queries in a single environment without having to install, understand and reconcile various modules. Furthermore we utilize the broadcasting functions to send all stores a detailed weekly performance and sales report incorporating various analysis perspectives, providing them with targeted and timely information on which to base their decisions. Among other things, the actual value of the information produced is pushing us to invest further in this area: we have already started a new project to provide each store with a web connection to access Board data, so as to guarantee instant access to up-to-the-minute information at any time.
From the steering committee to operations: The value of Business Intelligence for Desigual
The most positive aspect of the various Business Intelligence initiatives that we manage with Board is being able to observe, day by day, how the number of BI users is continually increasing, and how within the organization there is a growing demand for new information to manage day-to-day operations even more effectively. This just goes to show how much value the project has brought to end users. Our idea of Business Intelligence has never been to create extremely complex applications, but to create simple and effective solutions that promote the diffusion of a data analysis culture throughout a young company that is able to grow and evolve rapidly with changes in the business.
The flexibility of the Board platform has delivered great benefits to the company, enabling a reduction in reliance on IT, greater access to information, and the ability to enhance the platform in line with changing requirements:
For its part, Board has proven itself ideally suited to this concrete approach to managing company information. This is due to its application flexibility, which enables us to design and develop any analysis application extremely quickly and without the support of external consultants, as well as its capacity to provide more expert business users with a fully self-service BI environment that allows them to independently generate dashboards, reports, and ad-hoc queries.
Both during and beyond the initial project, buy-in from all relevant stakeholders has been crucial to success, as Desigual's source concludes:
Outside of operational evaluations, it should be noted that the project would not have been such a great success without the crucial role played by the Management Team. In fact, the steering committee was the first user of Board and the first sponsor of the initiative. Its efforts to promote the diffusion of information to all levels and spread the idea of Business Intelligence as a continually evolving project throughout the company have played a key role in the creation of a solid information culture within the company. And it is on this basis that our IT team has always tried to fully exploit the flexibility of Board both by adopting a prototypal approach to the construction of applications in incremental steps and by enabling a large number of business users to become independent in the creation of their analyses, through to the dissemination of an adequate level of understanding about the product throughout the company.
The punctuality and ease of access to information achieved through this approach have prevented the proliferation of systems throughout the company based on individually managed micro-computer tools and the duplication of data, guaranteeing a single and shared view of information at all times and at all levels of the company, from operations to senior management.