|Oleg Spirin, Chief Data Officer, VARUS|
How did the digital transformation in VARUS begin? Last winter, Natalya Azyukovskaya, VARUS CEO, called me to her office and said “Oleg, I was presented Corezoid and told that we wouldn’t need IT experts any more 😉 Is this true?”
Having experience in working with Corezoid, I replied “On the contrary, everyone will become an IT pro! Lawyers, accountants and marketers will be able to automate and run business processes by themselves.”
We see Corezoid as a “codeless programming” tool. Corezoid is a system which helps to quickly build business process of any type, merging all those old software systems that are currently used in VARUS. Corezoid enabled us to focus on processes but not on their programming.
Thanks to Corezoid, VARUS managers started thinking algorithmically. We learned how to write briefs correctly. We now always include a business process flowchart in each brief.
We have also launched a project to implement a culture of working with APIs. There were 0 APIs in VARUS last year. This year, we have more than 50. These APIs have covered the major areas of interaction with the Company's business processes: goods, customers, suppliers, employees.
For example, we have an API that gives us complete information on stock levels of a particular product. There is an API that helps to get full product information by its barcode.
In addition, in scope of a transparent data strategy, we created the first public API, which is now available on the Corezoid marketplace. This API makes it possible to get the list of all cities where VARUS stores are located and the list of promotions run in those stores. We will make IT literacy one of the focus areas in KPIs for VARUS managers next year. It is important for us that VARUS key managers become tech savvy and understand what an API, processes, dashboards, etc. are.
One of the first actions when we got started with Middleware, our technology partner, was the transfer of information from receipts to Corezoid. This enabled us to react to customers’ purchases in real time in all 74 VARUS stores. We started managing returns, tracking errors in charging bonus points, and sending out polls on service quality.
We created a VARUS bot in Viber messenger. The bot recruited more than 100,000 users in the first 3 months of operation. Customers were able to link their VARUS cards to the bot, check bonus balance on their cards and receive personalized notifications from VARUS.
What is the value of such customers to us? A VARUS bot user receives an average of 12 communications per month from us. This customer has 10% higher purchase frequency and 27% higher average receipt amount vs. an average VARUS buyer. We understand that a customer that receives communications is a profitable customer.
Eventually, we realized that a plastic loyalty card in itself has no value. What’s important is a “digitalized customer” whom we can communicate effectively. We used to sell plastic loyalty cards. Each customer had to fill out a rather complicated questionnaire to obtain a VARUS card. Then we realized that it was very important to get a unique customer identifier, for example, his phone number, to enable us to communicate with him. The card itself has no perceived value. It doesn’t matter whether it even exists in plastic format.
Now we are completing beta testing of 3 objects in which the loyalty card may exist: all instant messengers (Viber, Telegram, Facebook), the VARUS mobile application and old-school plastic.
The Corezoid-based digital core enables us to use any front-ends for interacting with customers. We can also easily establish partnerships with other data owner companies, mainly with banks and mobile operators.
I’ll reveal a secret. We will launch a “gluing cards” project soon. What is it about? We can charge bonus points without a VARUS card on hand following a bank transaction in VARUS terminal. The customer won’t need to show either his plastic or virtual card. Bonuses will be charged seamlessly and in the background, like UBER payment.
We are currently carrying out a pilot with PrivatBank. We will be ready to run the project with any bank in the summer. It will be enough to make a slight integration to start charging bonuses with cards of our partner banks. Welcome to testing.
A referral program is another VARUS “digital project”. Referral mechanics work well in instant messengers. It’s easy for people to give the bot an access to their phone book contacts. This channel for attracting new customers to VARUS will be almost free.
Why do we need it all in VARUS? Why did the food retailer suddenly become concerned with digital transformation? The truth is that the digital projects that I am talking about generate new values for customers. Positive customer experience influences their perception of the company. Today we can already see that promoter customers, who favorably evaluate interaction with VARUS, have a 32% higher average basket vs. neutral customers or, even more so, detractors. Positive experience builds business value and, ultimately, influences VARUS capitalization..
The material was prepared based on speech by Oleg Spirin at the Ukrainian Marketing Forum on April 17th, 2019 at the “Digital Transformation” block organized by D2.digital.*