When Videolux Holding acquired the Bulgarian operations of German DIY giant Praktiker, it discovered a golden opportunity for boosting online sales. Could it build a high-impact web presence, fast?
Praktiker engaged IBM Services to enable dynamic web capabilities, based on SAP® Hybris Commerce software, fully integrated with SAP ERP business solutions.
Threefold risein total average monthly sales
Doubledaverage transaction values
Tripledmonthly online orders
Business Challenge Story
Modernizing the digital channel
At the onset of the global financial crisis in 2008, many housebuilding and home improvement projects came to an abrupt halt. Praktiker, a DIY retail chain with operations throughout Europe, saw declining sales, and in 2013 a number of its non-German subsidiaries filed for bankruptcy.
Videolux Holding saw the opportunity to diversify its retail operations into this very rapidly growing sector, and acquired the Praktiker Bulgaria operations, including several very large stores, in 2014.
Clearly, the priority was to increase Praktiker’s sales as rapidly as possible. With the physical stores undergoing refurbishment, and in some cases relocation, revitalizing Praktiker’s web presence offered the fastest route to glittering commercial success.
Kalin Georgiev, Chief of Electronic Data Processing Department at Praktiker Bulgaria, describes the scene: “We wanted to create a site that would inspire consumers to buy from Praktiker, with a comprehensive product range supported by design and decoration ideas. Additionally, we wanted to promote the brand and encourage people to visit the stores in person. Finally, we wanted to be able to respond quickly to changes in competitors’ prices, and create our own marketing campaigns.
“Our existing web platform was built on proprietary technologies, and required significant manual effort from IT staff for even simple updates. For example, introducing a new products section might take a couple of weeks, and in the highly competitive retail market this was simply not fast enough.”
Working with IBM Services, Videolux had recently developed the web presence for another of its subsidiaries, Technopolis, a market-leading electronics and electricals retailer. Based on that success, Videolux turned to IBM Services once again.
Kalin Georgiev explains IBM’s contribution: “We knew that IBM would offer good strategy advice, not only from technical and business process perspective, but also from the user experience perspective. We initially planned to replicate the existing Praktiker site, but IBM encouraged us to include inspiration and demonstrations, such as how to build a kitchen or design a bathroom.”
The IBM team completed the technical data extraction from the German parent company’s systems, which were themselves hosted and maintained by IBM. This made the transition process considerably easier. At the same time, with assistance from IBM, Praktiker deployed SAP ERP applications for general business management, as this is the corporate standard for both Technopolis and Videolux.
In just a five-month period, Praktiker was relaunched with new business management and integrated web solutions. Although the Videolux and IBM teams were able to bring fresh, hands-on experience of the recent Technopolis deployment, the Praktiker site required a very different approach.
Kalin Georgiev says: “To provide a slick customer journey, we wanted to make it easy for customers to browse and select from our catalog of over 40,000 items. We selected SAP Hybris Commerce, which offers a flexible platform for managing the sales process. The IBM team advised on how we could import the catalog data rapidly and reliably, with a target of five months to complete both the SAP ERP and the SAP Hybris Commerce implementations.”
IBM provided a complete service, from performing the data migration through to building the first online catalog of around 10,000 products. Kalin Georgiev continues, “Exactly as we expected from our previous experience, IBM brought experienced people who solved multiple challenges with understanding and professionalism. Most importantly, the IBM team delivered the results on time. The solution is fully integrated with the SAP ERP systems such as warehousing, product picking, logistics and procurement, which will greatly help our business efficiency.”
To support the new solutions, Praktiker uses IBM System Storage, including IBM® Storwize® V3700 and V7000 storage servers, built on IBM Spectrum Virtualize™ software. These storage systems offer exceptional scalability, reduced administration workload and very high system availability.
Threefold growth in almost every measure
In the seven months since go-live, the site has been visited by 750,000 unique users in a total of 1.365 million sessions. The traffic has gradually risen, starting from around 1,500 visits a day to a new average of 5,000 a day, more than three times higher. In the same period, monthly sales at Praktiker have risen by almost threefold, and monthly online orders almost tripled—and with increased average transaction values.
Kalin Georgiev comments, “The sales, orders and web traffic increases have all been achieved with the same number of staff. The SAP Hybris Commerce solution provides a very flexible, reliable and efficient business process, able to support growth on almost every measure.
“Additionally, the web experience is helping to lead consumers into the stores to explore ideas, and since the launch of the new site we have seen growth of in-store sales of around 30 percent. Naturally, this is partly owing to the reorganization of the business itself and improved marketing, but it is fair to say that the improved site gives much better information to customers, and boosts the appeal of visiting physical stores.”
Competing vigorously in a crowded marketplace, Praktiker is striving to achieve market leadership. The IBM team came up with innovative ideas to help the company attain its goal. The ‘new’ Praktiker has undergone complete digital reinvention, with connected, integrated processes that permit true omnichannel retailing and a hugely enhanced customer experience.
Kalin Georgiev comments “For example, IBM provided valuable insight into how we could improve the landing pages for each section, and how web and in-store sales channels could be linked to the SAP ERP solutions to help improve efficiency with best-practice experience from similar situations.”
The SAP Hybris Commerce solution offers key advantages in the contest to attract customers. In the past, the Praktiker team found that even relatively simply changes to the website took several weeks, discussing back and forth with IT how it should happen, with yet more time to implement the updates. Now, even complex changes take just a few days. Simple price changes, product promotions and marketing campaigns can be executed within hours, dramatically sharpening the company’s agility in response to changes in the market.
“SAP Hybris solutions offer a toolkit with powerful functionality to meet any market challenges and create great customer experiences,” says Kalin Georgiev. “Online sales and marketing are expected to be the cornerstones of growth in the future, and as the most complete solution in the marketplace, the SAP Hybris portfolio works together to give us future capacity.
“Working with IBM, we have enabled true omnichannel capabilities. For example, we can create special offers for individual customers, linked to in-store promotions such as assembly or delivery services, tailored precisely to fit their specific needs. Those kinds of capabilities give us an edge over competing retailers.”
Kalin Georgiev concludes: “The advanced features of the SAP Hybris Commerce solution combined with the expert advice from IBM Services put us in a strong position to reach our goals and achieve sparkling business success.”
In 2014, Videolux Holding acquired the Bulgarian operations of the German home improvement chain Praktiker. The company operates nine DIY hypermarkets—two in Sofia and one in Plovdiv, Varna, Burgas, Ruse, Stara Zagora, Pleven and Veliko Tarnovo—carrying around 40,000 home improvement products. Customers who visit its stores can take advantage of services such as timber cutting, bathroom designs, paint mixing, home delivery and consumer credit.
- Consumer Centric Retailing
- GBS AD&I - EA - SAP
- GBS BCS EA - SAP
- IBM Global Business Services
- IBM Spectrum Virtualize Software for V7000
- IBM-SAP Alliance
- Storage: EXP520 Expansion Enclosure
- Storage: Storwize V7000