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Since its inception in 1988, Carpetright has grown to nearly 600 stores in the UK and Ireland and more than 125 in mainland Europe. The company is in the FTSE 250 and has a turnover of approximately £500 million. However, the current economic conditions make it a challenging environment for the retail floor coverings industry. House sales have hit a 30-year low and the average number of sales per agent has fallen to 11.5, according to data from the Royal Institute of Chartered Surveyors (RICS).
This makes it important for carpet retailers to make the most of available market opportunities. If people are moving less frequently they are spending less money on items such as carpets and flooring. However, on the upside there are people who are choosing to stay in their current homes for longer and may be looking to modernise. With these developments Carpetright is in a strong position – the business has 30 per cent market share and its scale means it can buy from its suppliers competitively and pass good deals onto customers.
Although the market place is not a fast growing sector the business is looking to find new customers, areas and territories and increase market share. Following an acquisition the retailer has more than 100 stores in Belgium and Holland and has recently entered the Polish market. The success of Carpetright to date puts it in a position to take advantage of companies that are struggling during the recession. However, none of these opportunities would be realised without having the technology in place to support demands.
The challenge
Despite Carpetright’s strong market position, the company had previously struggled by having no clear IT strategy to support the long term objectives of the business. Ian Woosey, group IT director, Carpetright, say: “When I joined the company in 2002 it was a challenging time for both IT and the business. There was a number of old bespoke, complicated and unreliable systems, which meant that staff were prevented from meeting the day-to-day requirements of the business.”
Carpetright needed to bring in technology that would support its long term objectives and assist staff with their duties. The business was implementing a new back office solution, but it also needed a new in-store system. Woosey comments: “The business had two in-store systems in the UK and another one in Europe. This meant that we had three different systems polling three different types of data. This posed operational problems as staff in the UK would often have to work across different stores using different systems. We realised there was a need to rationalise and we needed our in-store solution to complement the new back office technology we were about to implement.”
The business also needed a solution that didn’t hinder staff but assisted them in their roles. Woosey says: “The sales process at Carpetright usually sees a customer walking around the store who may want some guidance from the sales person. After this the customer and salesperson sit down and work out a deal. We wanted the sales person not to be frightened of the technology that they had to use to complete a deal, but to assist them. We didn’t want staff to handwrite orders. It was important that we improved the goods receipting process and in turn improve stock information and revitalise our replenishment processes.”
The solution
Carpetright looked at the leading European solutions. Woosey comments: “We narrowed down the list from the top 12, to a shortlist of six companies and then we invited three businesses to tender.”
The pitch process involved people from across the organisation and not just IT. He adds: “We needed to involve people from all levels across our business in the selection process – particularly employees who would be using the technology on a daily basis. From this panel Microsoft Dynamics from K3 came out way ahead as the store solution, while SAP was selected for the central systems.”
K3’s experience of the retail market was significantly better than that of the competition, while the attitude of the team was key. “At the time K3 hadn’t worked with as large a retailer as Carpetright. We involved Microsoft and got its support and we project managed the deal ourselves. K3’s ability to work as part of a large team enabled us to deliver the project on time and to specification.”
With Microsoft Dynamics, Carpetright has a product which has been tried and tested and is backed by years of Microsoft research and development. As the technology uses the same platform throughout it ensures, “one version of the truth”, ease of maintenance and a reduction in training costs. It also allows the business to introduce standardised and controlled business processes, while all pricing and promotions are controlled centrally. The system also manages any end-of-line discounting programmes.
The business decided it didn’t want an aggressive roll out of the technology. The store programme kicked off when K3, alongside other partners, began a series of integration workshops, tackling every process and conceivable integration issue. A 12-month main build, (the final configuration and integration with SAP), was followed by rigorous integration and user acceptance testing. This consisted of testing over 1,500 scripts against all the business processes, replicating every conceivable eventuality.
A pilot with Dynamics running in a single store and the incumbent legacy system in the other stores, allowed Carpetright to test the IT infrastructure, while also observing the effect on store trading – evaluating the reaction of customers and staff and monitoring the effectiveness of the training programme. The full solution comprised new hardware, software, networks and even furniture for every store, followed by extensive training prior to a store going live.
Woosey adds: “We initially began with one pilot, then we steadily increased and made sure we avoided all the key trading peaks so service wasn’t interrupted. Once we completed a 16-store pilot for the Dynamics system, the rollout was increased to the rate of ten stores per week.”
K3’s technology is at the heart of the company’s plans for the future. “Our previous technology was 15 years old and the retail market has changed dramatically over this period. We needed to put IT at the heart of our business so we could take our business forward.”
Benefits
The technology has seen immediate day-to-day benefits of the business. Woosey says: “We now have much slicker operations across the organisation. We have dramatically improved our stock control procedures and it is far simpler to redeploy staff across the business.”
With the introduction of new systems the business can now trust the data it holds. Woosey comments: “IT provides analysis regarding sales margins and the promotions we can offer. K3’s solution fits neatly alongside the other technology we have introduced into the business. We now have a state of the art warehouse and most of the processes from once the carpet is ordered through to the final payment to our suppliers are now automated. By automating the processes it improves the efficiencies across the company.”
The quality of the data also allows Carpetright to address its day-to-day business issues more effectively. “Previously there were debates in our meetings due to the inconsistencies of data from our different systems. However, this wasn’t the issue – we should have been more concerned whether margins were up/down from the week before. We now have one system so we can address any issues with the confidence that the information held is correct.”
The technology also facilitates the process of acquiring new companies under the Carpetright name. “With our previous technology it would never have been possible to easily integrate new companies into the Carpetright business. We are currently going through the final stages of our acquisition of Sleepright, a beds retailer which has concessions in our stores. Before the introduction of K3’s system we would never have been able to integrate another business so quickly and with such confidence.”
Woosey concludes: “We want to make sure when we come out of the current economic downturn that our business as a whole comes out much stronger and we have a bigger market share. The technology we have introduced will support us in achieving this goal. In the last six years our business has doubled and we have gone from one country into five, K3’s technology has supported the business through this growth and will help us as we look to pursue new opportunities.”
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