Interview: Online video, mobile payments and Hema's efficiency drive

Netherlands-based retailer Hema is on an international expansion drive, with four stores opening in the UK over the last 12 months and up to 15 new shops planned for France this financial year.

As the value chain continues to add new locations to its portfolio, including its fifth UK shop at Stansted Airport later this month, group efficiency is high on the agenda. Mischa Gijrath, the retailer's efficiency manager, told Essential Retail there are a number of productivity pilots he is overseeing in Holland that could ultimately be used across the organisation's burgeoning European estate.

Gijrath says his main role is to help Hema achieve a better performance. Reporting to the store operations director, he also provides insight to the management board about productivity gains and inefficiencies in the business – and he predicts that online video will play a significant role in internal operations over the coming years.

Staff at Hema have historically followed a two-hour e-learning programme when getting to grips with the cashier process, but a trial in the Netherlands is moving this procedure towards employees viewing short 30-second movies.

Explaining the logic, Gijrath said: "When my dishwasher is broken at home I look at a YouTube clip and I fix it myself.

"I strongly believe video training is the way forward. My children [the next generation of shoppers] look at YouTube and post their own movies, and I believe it's an efficient platform."

He also has plans to utilise the wider workforce for this initiative, a direction many organisations in the industry are looking to make as they aim to engage staff and boost sales in a competitive environment.

People power

"If one colleague is good at it, why don't we show other staff and build a community?" he said.

Leveraging employee opinion and expertise appears to be part of the wider productivity strategy at Hema, with Gijrath saying the company needs more involvement from its staff "because the knowledge is there".

"I asked my 10,000 colleagues what inefficiencies you see and the input was immense because they are doing the job every day and they see what is wrong, and I use that input to develop new projects."

Hema uses supply chain software provider JDA's Task Management tool for that function, while JDA's wider suite of solutions is utilised for scheduling and general workforce management.

Over the last year, use of this technology has helped generate information which the retailer has acted on to drive efficiency, ranging from the way it wraps its in-store sandwiches to how to deploy staff in shops, as well as being the driving force for the development of an in-store picking system for eCommerce orders, which has helped maximise employee hours.

Gijrath says the company increased its productivity by 7% in the last financial year, while still seeing like-for-like sales grow by 6%. He also suggested that the business always looks to invest the money it saves through efficiency processes back into customer service, describing cost cutting as an "easy" alternative that other businesses might undertake.

"My main goal is not to do cost cutting and take hours out, my main goal is really to look at how can we do a better job and a more efficient job, and make it easier for our store people and store managers."

Efficiency at the point of sale

Much has been made about the impact mobile payments can have on retail from a customer convenience perspective, but implementing near-field communication capability at the point of sale can also have internal operational benefits too, says Gijrath.

Netherlands-based bank ING has already announced that it is bringing contactless payments to the Holland, as well as saying it will support Apple Pay when it officially reaches the country. Following a trial, Hema will be looking to introduce NFC as a new way for customers to check out in its Dutch stores, from March 2016.

Describing the current process of finding a debit or credit card and entering a PIN as "dipping", which he says takes around 20 seconds to complete a transaction, Gijrath asserts that mobile payments can bring significant efficiencies.

"If you tap, it's only four or five seconds. You have to imagine we do millions of transactions per year, and improving the speed gives us a lot of hours."

When making changes to the business, typically, new systems are trialled in the Netherlands, before being rolled out across the country, followed by nearby Belgium and then throughout its wider European estate. This would be the intended path for the NFC project.

Hema works with JDA and other service providers to unearth inefficiencies before putting strategies in place to improve its processes. It's an ongoing journey to ensure the businesses is as productive as it can be throughout the financial year.

"We use the suite to focus on how much labour cost we have, how many hours we use, which processes are very inefficient, and what we should tackle to get things done in stores in an easier way," said Gijrath.

"It gives us, on a daily basis, very good insight into which inefficiencies we have in the company. Every company has inefficiencies, but it's a case of how you're going to tackle the issues."

When Hema arrived in the UK with its London Victoria store in June 2014, the company said it was looking to roll out shops nationwide.

That strategy will continue when it opens at the newly refurbished Stansted retail space, having been selected for one of the 18 new units from a list of 80 applicants. The Dutch retailer joins traders such as Joules, Oasis, Dune and Superdry at the airport, as part of the final retail phase of an £80 million terminal transformation.

Hema at Stansted opens on Monday 23 November.

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