Successful modern retail needs a touch of Goldilocks magic.
It needs its understanding of customers to be just right; it needs its supply chain to be just right; it needs its supply of goods and services to be just right.
Consequently, it also needs its information systems to be just right.
Citta is based in Auckland and designs and retails an extensive range of furniture, lighting and homewares. About 45 per cent of the business is wholesale, 50 per cent retail and 5 per cent online.
It broadly has two types of customer – those who buy homewares and those who buy furniture and lighting. There’s some crossover, but broadly the first group is predominantly female aged 25-55, the second more mixed.
In the future however Citta wants to get a much finer grained understanding of customers and prospects.
Grant Taylor is a Citta Director and Chief Operating Officer and he believes that business intelligence has the potential to be a game changer for the company.
“I think it’s all going to be about artificial intelligence. Predictive analytics and artificial intelligence, not only at the back-end to make you more efficient and help you, but from a customer perspective, is just going to be an expectation. People are just going to expect that your business can do these things and you need to be in a position to be able to get on board with that,” says Taylor.
Citta’s journey to intelligence began in June 2016 when the company became the first retailer in the world to go live with Dynamics 365 Finance and Operations and POS. Working with Microsoft partner Sable 37 the company has committed to regular upgrades of the platform to ensure that it keeps pace with the fast pace of innovation now sprinting across the global retail landscape.
Taylor explains that one of the priorities for Citta is to have just enough products – not so much that it’s left with unsold stock at the end of a season – but enough to meet customer demand – using standard capabilities of Supply Chain in Dynamics 365. In the past that has been a pretty manual business, and Taylor says that there is now the opportunity to make more use of artificial intelligence to support buying, planning and forecasting.
Citta is also expanding its use of CRM, refining its loyalty program and looking to implement full warehouse management.
It all adds up to automating what is “just right”.
“What we’re talking about is basically, when you buy the product, you start off buying the right amount of product based on store type – so we have different types of stores, let’s just call them small stores, medium-sized stores and big stores. And they have a different range of product, and you want to agree that range in the minimum and maximum quantities within those stores. And then what you want to do is place an order that allows you to buy enough stock, and then from there, because we have such a large amount of newness in our range, you want to be able to re-order through the season the things that are selling well,” says Taylor.
Being able to base that on data and analytics reduces the guesswork and helps streamline the supply chain.
“Having just enough stock in the right place at the right time sounds incredibly simple but it’s the key to successful retailing,” says Taylor.
Citta is also focussing on developing a more omnichannel experience for customers, leveraging the cloud and CRM.
“What we’re trying to do is segment our customers, find more of them, get offers in front of them that are appropriate. It’s basically about looking at what we’ve seen other customers do and using analytics and artificial intelligence to basically predict what they might be interested in.”
Go for growth
The intelligence infused in Dynamics 365 is a key support for Citta now and in the future. And, being cloud based means that the same information platform can be used to underpin Citta’s international expansion plans and also scale to support a retailer whether it has 20, 200 or 2,000 stores.
“One of the things we’re not doing at the moment is we don’t know if you’re a customer, whether you’re an outlet customer, an online customer, or an in-store customer, and what percentage of your spend is across all those channels and how to best get in front of you. So having our loyalty program in place this year will really help us achieve that,” he says.
It will also deliver Citta with additional data that it can mine for value.
Taylor says the company is also looking to more tightly integrate with its suppliers to ensure timely accurate information and optimised lead times. That’s been made easier because Citta has avoided customising Dynamics 365 Finance and Operations, preferring to use its out-of-the-box capabilities in order to maximise both flexibility and integration opportunity.
“Any sort of push-pull integration with a third party through an API or electronic data interchange is a real benefit,” says Taylor. “I’ve found that level of integration under Dynamics is a lot more straightforward – it used to be a real challenge. But if you’re working with a really good supplier, you can integrate your solution and when they update it, you get that update and then that might flag something with you that might prevent the product being late, as opposed to you maybe waiting a week or two before you email them to see what the status of things is.
“Microsoft and Dynamics 365 and cloud-based computing, it all seems to make sense. It’s been really good in terms of managing budgets and knowing what we’re getting from our buck in terms of the IT spend as well, so from a cost-control IT perspective it’s been good.
“But really it’s about the richness of the solution and backing a horse that can take you somewhere that you might not have thought you could go and might not be possible if you hadn’t made that choice. So that’s where I think we find ourselves in these days is that we can do the things that we think we should, even though at the time we didn’t actually know we’d want to.”
And like Goldilocks, finding something that’s just right.