Helped a DIY goods retailer rebuild its business model with PIM system
Omnichannel retailer of DIY and building materials Petrovich is steadily in the top 3 in the core market. In 2021 the INFOLine analytical agency recognized Petrovich as the fastest growing company in the DIY market: the company's annual revenue grew by 33.65% to 1.227 billion euros. In 2021, Petrovich carried out 3.2 million deliveries of building materials.
The main offline stores are located in the Central and Northwestern Federal Districts. Online sales are built through Petrovich's own online store with pickup points throughout Russia. Amid the pandemic (2020-2021) goods representation in the online segment has allowed Petrovich to maintain a stable level of sales.
Petrovich's partners are regional DIY-store chains Umelets, DobroStroy, Baza, Megastroy and others. They exhibit their goods on the Petrovich Marketplace in order to gain access to an additional audience; Petrovich, in turn, becomes more useful and in demand with customers, since it can offer a more diverse assortment.
Petrovich's Goal is
to Increase its Presence on the DIY Goods Market and Become a Leader in the Segment
To do this, Petrovich needs to increase the number of product categories and assortments within each category, because
- shoppers are more willing to choose stores where they can buy everything they need;
- a large selection of sizes and designs within each category attracts customers with non-standard requests.
But keeping a large assortment in offline retail is not economically feasible. The cost of retail and warehouse space, staff and operating costs are disproportionately high. That is why the typical assortment of a large DIY store is 30-50 thousand articles, whereas the assortment of one manufacturer, for example, in the mixer taps alone is up to 100 thousand articles!
The optimal business model for achieving leadership in a segment through assortment leadership is the marketplace. In 2020, Petrovich began to rebuild its business model in this direction, but ran into problems with the processes:
- The scheme of working with regular direct suppliers was not suitable for suppliers who work exclusively with the marketplace;
- it took 20-30 minutes to enter each new item (for example, an ordinary hammer) into the online assortment;
- the quality of information suffered in proportion to the growth of the assortment.
To help Petrovich rebuild its business model and its reflection on the IT level. To optimize and simplify processes of work with suppliers. Reduce the cost of introducing goods into the assortment and their withdrawal.
For Petrovich, changing its business model meant revising many business processes and building a number of processes from scratch. These changes had to be reflected in the company's IT architecture.
Over the year and a half we and the managers of Petrovich have gone through the construction of new processes, building the IT-department with a new structure, restructuring the IT architecture according to the new business model.
Our project managers and developers have spent hundreds of hours and several face-to-face meetings with the management of Petrovich. As a result, we built and detailed the business processes of working with goods and reflected them at the IT level to optimize the work with the product catalog and accelerate assortment growth.
Result 1: Speeded up the addition of goods to the catalog by four times
Previously, the procedure for adding new products was as follows:
- The supplier and managers of Petrovich corresponded via e-mail, discussing the terms of future cooperation. Important information, agreements, files were lost among the hundreds of letters and dozens of correspondence threads;
- the commercial proposal was negotiated in several stages;
- after the commercial proposal was agreed upon, Petrovich employees sent an Excel form to be filled out;
- Petrovich staff fed the information into 1C and verified it.
With all the processes taken into account, the content managers at Petrovich spent up to 30 minutes for each item: from a self-tapping screw to a woodworking machine.
We automated the processes for adding goods to the assortment matrix.
Now the supplier registers on Petrovich's B2B portal after concluding a contract.
Then adds a commercial proposal for goods:
And uploads an Excel file with the assortment.
The system automatically distributes the information to the product card fields. The content manager has only to validate the information.
Instead of 30 minutes per position, it takes the content manager no more than 5-7 minutes to introduce it to the catalog.
Result 2: The manager does not waste time associating images with the product card: it happens automatically
Uploading and associating images with product cards was part of Petrovich's managers' work. Each product had to be linked to up to ten pictures of different quality, in different formats and resolutions. The managers kept track of the photos in the catalog to ensure that they were in the right card, so that buyers' expectations of the goods would coincide with the goods themselves.
We wrote an integration that allows images to be uploaded to product cards in bulk without managers having to do manual work. The supplier assigns names to the images that coincide with the article, and uploads the entire array of files into the system. The system automatically distributes them to the necessary product cards.
Result 3: Expanded the assortment by 1.5 times by connecting additional suppliers
Previously, the assortment in both online and offline stores of Petrovich consisted of products from the chain's main suppliers. There were 179,000 items in the catalog, and some categories of goods for repair and decoration were not represented in the stores. For example, Petrovich did not have prefabricated furniture, doors, video intercoms, etc.
Petrovich agreed with the partners to expand the online assortment through their catalogs and those of their suppliers.
For this purpose we developed two business processes for uploading new products.
- The business process for the regular supplier provides that Petrovich receives information about the goods, agrees on purchase prices, and allocates space in the warehouse. From the time of delivery until shipment to the buyer, the goods are with Petrovich.
- Marketplace goods from partners' catalogs are not stored at Petrovich's warehouse, but at the partners'. The partners deliver goods to Petrovich's warehouse only after the client has ordered them through the online store. That is, the business process for such goods does not include the stages of entering them into warehouse programs and coordinating purchasing prices.
In addition, the supplier can set different prices for different territories: Moscow, St. Petersburg, regions. Flexible pricing allows Petrovich to offer adequate conditions for the entire assortment for each market.
As a result:
- The catalog of products in the online store Petrovich has expanded by half - up to 268,000 products (March 2022).
- New categories appeared in the catalog: doors, electric fireplaces, video intercoms, cabinet assembly furniture... The total number of categories increased from 5000 to 5630 (+12,6%).
What did it do for Petrovich?
The conversion of online store visitors into customers has increased, and the average bill has risen. This happened because customers can now find everything they need in one place, both by category and by assortment variety within a category.
Petrovich is actively restructuring its business model towards the marketplace.
Petrovich's regional partners have gained access to a new solvent audience in the Central and Northwestern Districts without opening distribution points or investing in marketing.
Result 4: Withdrawal of goods from the range takes a few minutes instead of several days
Sometimes goods have to be removed from the Petrovich assortment.
There are several reasons:
- rotation of goods and freeing up space in warehouses for the updated assortment;
- the manufacturer no longer produces this assortment;
- the supplier no longer buys it;
- goods in the batch are of poor quality;
- Petrovich breaks off relations with the supplier for some reason.
Previously, the manager of Petrovich had to group the goods, select the type of residue (recycling, sale, etc.), make a memo, register it in the system, to spend on all instances. This process took from several hours to several days.
We have developed a process to simplify the withdrawal of groups of goods from the range. All stages of coordination and status assignment were transferred to Pimcore, and the final request with filled in product characteristics was sent to 1C. The output of goods will now takes minutes instead of days.