SAMPLY - ERP

SAMPLY is an ERP application I developed as Product Manager while working at That1Card E-commerce company. In this post I've illustrated its purpose, implementation and results.

Rising from the premature closure of my first start-up in the bio-degradable home care space, I began my second venture That1Card on May 2015 with a personal investment of $120k. That1Card started off as a niche e-commerce marketplace for wedding invitations. This was both an unfamiliar and relatively less explored product category by several Indian e-commerce companies.

I invested my initial energy and finances to establish a reliable procurement network and an online site with extremely strong SEO (Search Engine Optimisations) to attract prospects. With an extremely lean approach to generating top-line, we garnered the highest Alexa India rank among niche e-commerce sites in India at the time. While our NPS (Net Promoter Score) and website traffic were high, our conversion ratio was extremely low. I conducted detailed surveys with prospects, clients and vendors and analyzed the results. I identified two primary issues (contributing to a 78% drop) that led to our low conversion ratios. One was on the supply side and the other on the lead nurturing side. In this essay, I will illustrate the former.

That1Card hosts 71 invitation retailers (primary suppliers) apart from its private label brand ‘DI’ in April 2016. Over 90% of them sourced their invitation samples from a few stockists, while the others manufactured and sold them through company-owned franchises. These retailers had three primary issues – (i) lack of methods or processes for retail merchandising, (ii) inability to adopt complex technology due to low skill level and, (iii) lack of visibility to stock levels for the samples sourced from their stockists. A stockist was a wholesaler who purchased stock (e.g.: 100k units per design) of multiple wedding invitations (e.g.: 10k designs) and supplied one sample from each design to every retailer in his network. The retailer adopts a cash-n-carry model and pays a price premium to these stockists for holding inventory and bearing the risk of idle stock (for unsold designs). The stockist leverages his bargaining power (due to economies of scale) and accumulated demand for designs (that minimizes the risk of idle stock) in order to sustain his business. The key problems on the stockists’ end were – (i) traditional record keeping of inventory levels, (ii) inability to inform retailers of live inventory levels, trends or dynamic discounts, (iii) human-centered inefficiencies in inventory management and (iv) conflict-free seasonal allocation of designs amongst competing retailers. The problems at the retailers’ and stockists’ ends together amalgamated and led to three key problems that affected the conversion ratio of That1Card – (i) Lead dropouts due to inaccurate information of stock levels for various invitation designs, (ii) Excessive cost pileups in product prices due to inefficient vendor involvement and (iii) low dwell period due to lack of predictive matches between market trends and customer preferences.

My research with 24 retailers and 6 stockists gave me insight into the scale and complexity of the issue. I figured that if we could solve this problem, not just would That1Card’s conversion ratio improve by an estimated 35%, but the gross profits of retailers (~ 50%) and stockists (~90%) would improve due to both improved revenues (primarily driven by dynamic stock visibility) and reduced operating costs (primarily driven by automation).

The magnitude of the problem and the hope that clients would be willing to pay if a solution can be delivered (with good ROI), enthused me to set out to solve this. First, I tried to check if existing inventory-management software solutions could be configured in stockist’s locations at an affordable price point. When this didn’t work-out, I set out to develop a miniature ERP application (called ‘SAMPLY’) that would solve these problems one step at a time. I architected the initial process-sketches and illustrated how I believed these would solve the issues discovered during the research phase. Later, I presented these to potential users to gather feedback and iterate. Our subsequent process diagrams and estimated subscription price sparked interest in our users. Banking on this optimistic response, I set up a new team to build SAMPLY. Starting from simple module to standardize SKUs (Stock-keeping-unit), we built subsequent modules while prototype testing with prospective clients in parallel. SAMPLY was developed as a web-app for the stockist and an Android app for its retailers with all data captured and stored in the cloud. There were three phases to the development within each module – (i) Basic inventory linkage capture, (ii) Exceptions capture and financial linkages, (iii) Dashboard creation and UX changes to make the software more intuitive to use for our relatively less educated users. SAMPLY was instrumental in raising a new round of funds ($40k on Aug’17) from the Government of India (Ministry of IT and Telecommunication, Centre for Entrepreneurship Development and Innovation). The funds helped me ramp up speed in the product development through additional resource allocation and customer involvement. The beta-version of SAMPLY went live at our first client’s (stockist’s) location in Chennai on April 3rd 2017. It took us 35 days to train their staff to independently use the application.

I observed the outcome of the project over the next couple of months (until October 2017) and found its intended purpose unravelling. SAMPLY has been installed at 6 stockist sites and through them to over 220 retailers earning That1Card an additional revenue of around $20k per month, apart from improving the lead conversion ratio by 14% on the e-commerce website. Stockists using SAMPLY have observed a shortening of their cash cycles by 16 days and reduction in sales support staff by over 50% on average. Feedback from a random sample of 10 retailers indicated that they have reduced lead dropouts (by ~10%) and reduced lead conversion time due to better stock visibility and easier showroom merchandising. The bigger satisfying outcome has been that my team was instrumental in making a small dent in an inertia ridden process-anemic brick-n-mortar traditional industry in helping it leverage ‘data enabled process optimisation’ within its supply chain. After all, the changes we make lives after us!