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Openbravo: Meeting retailer’s expectations!!


Operations in India

Openbravo’s stepped into India in 2008 with Sunando Banerjee, their channel representative for APAC and Middle East regions, with broad experience in Microsoft Dynamics solutions for the Indian market. Marco de Vries, Chief Operating Officer, Openbravo, says: “Since 2008, we have increased our local team to better serve our partners and customers. We have formed healthy partnerships with 12 partners and over 100 customers in different industries, such as Federal Bank, Hisar Metals, Quick Heal and Esmech. For the coming quarters, we have planned for ambitious channel growth by increasing the number of partners in the country. In this effort we focus primarily on attracting companies with demonstrated experience in the ERP market in general and in the retail industry in particular. Those companies generally are already distributors of other legacy solutions yet feel the market pressure that pushes them to further improve their offering by adding the Openbravo solutions to their product and services portfolio.”

Spreading wings

Openbravo’s operations centre round their product, channel and services teams. The Product team charts the roadmap for the company and plans its execution. Quarterly roadmap updates describe their next main functional and technology innovations. The Channel team is in charge of the company’s relationship with current and potential partners, and also takes care of the Openbravo Partner Program. Its goal is to help its partners to form successful relationships with Openbravo and build a prosperous business around the Openbravo solutions. The Services team is composed of a highly skilled and experienced group of consultants and software developers that help Openbravo’s partners to achieve success in commercial and implementation activities.

The Openbravo commerce platform offers multiple benefits to the retailers by helping them achieve real merchandise management agility, seamlessly execute supply chain operations, enhance visibility with reporting and analytics, etc. To date, the business generated in the retail industry already represents 15 per cent of the total company software sales, which confirmed the rapid and solid growth of Openbravo’s presence in the industry.

According to a recent market study on the state of the retail sector, released by Openbravo, the main IT systems are a thing of priority for retailers today. The starting point however deserves special attention since it is the confirmation of a key reality, which is the importance of the physical stores despite the much talked about rapid growth of online retail. The study confirms that in retail, physical stores will continue to be the main driver of sales in the coming years and this has an enormous influence over the retailers’ IT decisions. In India, for instance, the study revealed that 98 per cent of total retail sales still will be generated in traditional physical stores by the year 2018.

The second main conclusion is a positive trend change with regard to IT investment. Retailers in leading markets plan to increase their IT budgets both at the corporate and store level. Openbravo expects to see this trend catching up in many other markets as well. If the trend is confirmed, this will ring a positive bell for economic recovery after several years of economic slowdown.

According to Vries: “If we delve deeper, we will see that mobility, cloud and cross channel are clearly among the top three IT priorities from a global perspective. Cross-channel in particular demands new systems that provide a seamless shopping experience and actionable insights across all channels. This results in a higher adoption of mobile POS systems in the physical stores as also the need for better analytics capabilities. Lack of proper analytics is considered by 71 per cent of retailers as one of the primary reasons for low cross-channel adoption.”

He adds: “Our reaction to these conclusions cannot be more positive, especially considering the confirmation of the continued importance of physical stores. The fact that this reality is even more apparent in markets like India also allows us to see the future with more optimism since it is already one of our key target geographies. The above confirms our strategic decision to invest in retail and especially add priority to a strong store solution that can help retailers succeed in current as well as future industry challenges. In fact, our POS solution today is still quite unique in the market since no other solution provides the same level of functionality combined with full web and mobile capabilities.”

Role of technology in modern retail

Technology for retailers acts as a growth driver. In today’s highly competitive landscape, technology enables them to optimise operations and to develop competitive advantages that allow seeking for new growth opportunities. New key technologies are flourishing constantly so retailers need to be always updated about their benefits and understand ways to leverage them. Mobility is one of these key technologies and it is rapidly gaining ground.

Retailers invest in mobility mainly to enhance the customer’s experience and to improve business efficiency. The retail area that is most benefited from mobility today is store operation both in front-office and for back-office processes. Common ‘point of sale functions’, when directly operated from a mobile device, are dramatically changing the way store associates service their customers. And this is especially important for specialty retailers in hard goods and soft goods for whom an interactive assisted sale everywhere in the store makes all the difference to offer superior service. Retail back-office operations can also benefit greatly from mobility. For instance, it can be highly beneficial in managing inventory effectively.

A lot of retailers are however struggling to embrace mobility due to different technical, cost or operational reasons. And, this is an area where Openbravo can clearly help. Openbravo’s technology platform provides a powerful mobile infrastructure that allows retailers to mobilise their processes with full support to offline operations, gives more freedom to use the devices of their choice and helps to reduce the overall hardware cost thanks to the use of cost-effective consumer devices such as tablets or smartphones. Furthermore, the Openbravo commerce platform already provides a comprehensive out-of-the-box mobile functionality including a state-of-the-art point of sale, purchasing and inventory management capabilities that can be easily extended to adapt to any customer-specific requirement.

Current IT trends in the Indian retail sector

Vries shares: “The first thing that we must consider when analysing the Indian retail market is that India’s retail sector is on its way to modernisation. Unorganised retail including family-run businesses or traditional kirana shops amongst other low-cost retailing formats, which still dominate the market, are not making substantial use of technology. So if we want to analyse the current trends in technology adoption we must focus on organised retail, which is – depending on the data source used – around 5–8 per cent of the current total market, and it is expected to reach 20 per cent over the next five to seven years. But even here there is a lot of hard work to be done.”

He further adds: “The most demanding areas in terms of technology are sales and marketing, operations or even financials. Although there are some differences between the different retailer groups in general, we see a clear priority in the adoption of new store systems, new business intelligence tools fully embedded with their core systems and a progressive integration of the online channel.”

Indian retailers in terms of technology adoption

Thinking of organised retail, it highly depends on the retailer sub-sector but in general we can say that industry maturity is low with a low technology adoption in key areas especially considering some of the main challenges they face. For instance, they face important technology challenges in terms of customer, product and inventory information across channels. The situation however seems to be better in specialty hard goods and soft goods retail, which used to be early technology adopters followed by department stores that also plan to increase their IT investments.

Also, the arrival of new international players can help to more rapidly increase the adoption of technology in this sector. However, this highly depends on the FDI policies. The new government has clearly stated its reluctance to open up to FDI investment in multi-brand retail but the situation is different in e-commerce, which is under discussion and as far as we can interpret to date it seems that the government will ultimately will give a nod to it. This could clearly help to accelerate online retail growth and with it the adoption of related cross-channel technologies.

Services and products

Openbravo provides a vertical for the retail industry through its commerce platform, which is the preferred commerce platform for agile retailers with a combination of a state-of-the-art commerce solution developed on a robust development platform, mobile, web and cloud-ready with broad horizontal ERP functionality embedded.

Key merchandise management features include flexible product and assortment management capabilities and a powerful pricing and discounts engine that allow to manage efficiently a huge number of products and assortments besides complex pricing schemas and promotions that allow to target customers more efficiently.

Key supply chain management features include the whole purchasing process management from requisitions to invoicing and a comprehensive inventory management functionality that can also be used from mobile devices.

Key multichannel features are provided at the stores by a modern and stylish full web and mobile POS with a fully transactional support that enables to provide an assisted sale everywhere in the store and helps to achieve higher flexibility by allowing easy addition or removal of terminals adapted to demand requirements. It also integrates seamlessly with existing e-commerce platforms like Magento through existing connectors.

Key enterprise management features include financials management and support to customer relationship management and human resources management. International operations are supported by multi-language, multi-currency and multi-accounting schemas capabilities.

The solution also provides a powerful embedded analytics engine to make smarter decisions based on actionable insights across the enterprise and all channels.

All the standard functionalities can be easily extended with additional modules developed by Openbravo or its partners that can be easily installed and maintained.

“Our customer experiences in India confirm the observed trends in our study with a growing interest in new store solutions and a progressive integration of the online channel. Affordability is a key aspect for Indian retailers and here clearly our subscription-based pricing and the open source affordability are seen as big benefits. In case of brick-and-mortar retailers, they also value the fact that despite being a full web POS it also supports offline operations, which is critical to ensure uninterrupted sales in case of a connectivity loss,” says Vries.

Helping Indian retailers optimise

The adoption of the Openbravo commerce platform helps retailers to maximse profits with optimised operations that align every aspect of the retailer business. It provides support to end-to-end business processes that enable retailers to make more informed decisions and deliver consistent and truly differentiated customer experiences across all channels. 

Vries shares:  “Optimisation in physical stores is provided by an effective operational control at the POS with manager approvals and user permissions that ensure execution quality and prevent from fraudulent activities, accurate inventory control with the use of mobile solutions that provide real-time information about on-hand and pending to receipt stock [Not clear]and a detailed control of cash movements at each terminal. The available embedded analytics help retailers to optimise their promotions allowing targeting customers with more precision and with the creation of complex discounts and pricing schemas that can be easily defined and populated across all channels easily and in a timely manner. Detailed stock visibility at every location helps to improve inventory productivity and to minimise stock-out situations while helping to better adapt to future demand fluctuations.”

What’s in it for the retailer

The Openbravo commerce platform provides the processes and tools retailers need to optimise their business and drive operational success. It enables a smarter, more profitable retail enterprise through a complete set of specific retail functionality. As a result, retailers are free to focus on growing revenues, increasing margins, and driving consumer loyalty.

Physical stores are benefited by the adoption of a state-of-the-art web and mobile POS platform that allows them to successfully play a new role in the new cross-channel reality. Cross-channel progress is ensured thanks to better merchandise management agility that allows efficient management and launching of a larger number of products, assortments and discounts with shorter time-to-market, optimised supply chain management operations. Openbravo being a highly interoperable platform, it can be easily integrated with other systems thus leveraging prior investment and facilitating the adoption of new store technologies.

Employees’ productivity and engagement are also clearly improved with a solution that is very easy to use and with better tools and information that improve their decision-making process and help to provide better customer service. Retailers can also get more committed partners thanks to the platform’s ability to easily integrate with their systems or the capacity to share more valuable information that helps build long-term, win-win business relationships.

“From a technology perspective, Openbravo’s web architecture enables real-time operation and simplifies the system landscape, making it easier to deploy and maintain and thus decreasing its operation costs. Openbravo’s endless flexibility to adapt to very specific requirements and its scalable architecture allows adapting to any stage of growth, thus increasing IT responsiveness to business objectives,” asserts Vries.

Customised solutions

Vries explains: “Owing to its flexibility, Openbravo can be adopted by retailers running their businesses in different formats such as specialty stores, departmental stores or e-tailers. Each customer can decide the way the solution can be deployed and the functionality to be installed. These required customisations can be easily developed and maintained thanks to the modularity concept. Although we do not provide a specific solution for each format and all of them could benefit from its adoption, we have observed that mainly specialty retailers in hard goods and soft goods are probably those who can benefit the most if the business challenges are analysed from the very outset.”

Target group of customers

The Openbravo commerce platform has been successfully adopted by retailers with different sizes, in different subsectors and in different deployment scenarios. According to Vries: “It is precisely its functional and technical flexibility that allows Openbravo to be adopted as a stand-alone solution to support the whole retail business, to act only as the e-commerce backend for online orders processing and integrated with the existing e-commerce platform or to be deployed as the new store solution integrated seamlessly with the retailer legacy ERP, where we are experiencing very strong interest among SAP customers. Some of them are already using the Openbravo store solution integrated in the back-end with SAP. We have success cases under all these scenarios.”

He further adds: “Hard goods and soft goods specialty retailers with several dozens of stores are probably the most benefited by the commerce platform characteristics. For instance, with the importance they give to an assisted and interactive sales process in the physical stores. In a similar way and in terms of size, mid-size retailers being independent companies or subsidiaries of large international retailers, are considered in our target market since we can provide them with more competitive solutions in terms of pricing and expected capabilities, especially also considering a substantially lower rollout investment in time and resources required for Openbravo versus legacy solutions.”

Effect of economic slowdown on the retail business globally

The economic slowdown has reduced the consumer’s spending and this means lower sales and higher margin pressure. This has created a more competitive landscape where companies have tried to reduce their operational costs and Openbravo finds manufacturers increasingly selling directly to customers, retailers manufacturing their own goods or pure online retailers trying to offer better prices.

Vries asserts: “The need for cost reduction has impacted the investment in new technologies during the last years and this means that it has not been possible to progress as expected in some key areas, such as cross-channel or better shopping experiences. However, it appears that this trend is beginning to reverse. A clear proof of this is the increased investment in IT that retailers expect to be making in the near future. Somehow we are now moving from a scenario dominated by cost-saving strategies to a new one with new growth strategies where clearly technology is a key driver. Retailers will need to invest quite heavily, yet will still want to do so in a cost-effective way, which is where Openbravo is very strong.”

A good signal of this economic recovery is for example the recent announcement by Oracle of the acquisition of MICROS Systems, which clearly demonstrates the interest and potential big software players see in retail in the coming years.

Industry insights on B2B market in India

B2B market, or rather the maturity of the B2B market space, took time to develop. In terms of market maturity, India has always taken a leading step towards this market space. B2C has come rather late in India but in terms of exploring the B2B market space, India has always been way ahead of many other countries.

Vries shares: “The challenges faced by the Indian B2B industry are no different from what it is in the global scenario. Web portals like metaljunction.com have become new market spaces for buyers and sellers. However, what comes as the biggest challenge is finding the right marketing mix, the pricing policy and effective supply chain management, which needs to be made extremely different from the conventional ways used in a go-to-market strategy. As a result, the B2B market space has not been explored to even 10 per cent of its potential to date. So the only thing that can happen is growth from where we are today, which helps believing that India has the potential to be a leader in the B2B market space.”
Future outlook for 2014

According to Vries: “We look at 2014 with optimism and we expect an important growth globally in terms of partners and new customers. In India, in particular, and in retail we also expect substantial growth. We expect to be able to continue to raise interesting business opportunities during the coming months. Year-to-date numbers confirm that we are doing well so I am confident we will achieve our goals and take a major step forward, also with regard to our presence in the Indian market.”