Home Centre: transforming the supply chain to become a market leader
Since joining Home Centre in 2014, Chief Executive Officer Médéric Payne has injected passion, energy and vision into the retail market in the Middle East. He has done this by providing a clear strategy, incorporating areas from business development and the management of day to day operations, to encompassing full end-to-end accountability of running and leading the business, ensuring that Home Centre’s continual expansion delivers consistent results.
Payne has worked for a number of large retailers which house a range of cultural environments. However, his international outlook has enabled him to work successfully with a number of key nationalities, with over 40 based within Home Centre alone. Operating under the Landmark Group umbrella, the company has come a long way, which Payne explains: “My job is more within the wider business to lead the expansion and the growth and development of the company in the markets we are in now and the new markets we are entering.”
By joining such a successful company, Payne has streamlined and refocused the values within Home Centre’s vision in order to drive the business forward. Passion has become a core value, where Home Centre is keen to recruit individuals who exhibit enthusiasm: “When we recruit, we are looking for people with passion, which comes across in interviews. The passion and attitude is important,” comments Payne. Individuals have to provide accountability and ownership, show entrepreneurial experience and continually strive to achieve key results. “It’s not just about the work: it’s about effective results, whether it’s in supply chain, finance or commercial areas,” explains Payne. “Are you effective at your job and can you deliver the results that you’re being asked at any level in the business?”
Although Payne acknowledges that “retail is like a journey, there is no end”, he is insistent that continuous improvement is vital for all teams and ways of working at Home Centre. The company aims to remain a market leader within the region, bringing new ideas and fresh thinking into the industry. An example of this would be the introduction of mobile POS into company stores, at which Home Centre has become the first market leading home retailer and company at Landmark to undertake the pilot scheme. This will enable the gradual phasing out of tills in stores and enable sales assistants to showcase products in store, but also have access to the full catalogue and increased knowledge of products in the warehouse.
This transformation will enable an improved service for customers, which Payne explains: “We can process the order for the individual right there in store, right by the product, rather than dragging the customer away to a till in the corner of the store and take payment. That’s quite a technological revolution in the home industry.” This new process also will enable the company to align its supply chain so the employee can ascertain the type of customer and reduce customer waiting time and ensure a positive outcome. Employee morale is also heightened.
Following on from these technological investments, Home Centre is driving its online business and retail site, utilising Hybris and Oracle to ensure it operates correctly and safely, ensuring efficient reporting. Data is vital to the company’s continual growth, which is supported through the use of the Shrukran Rewards Loyalty Programme, the largest loyalty programme in the region. With over 15 million members, the programme covers all of the GCC and delivers a number of key benefits to customers.
However, the loyalty programme also allows Home Centre to understand what customers are buying. Payne explains: “If they buy a bed, do they buy the bed linen with it? Do they buy pillows, or are they just buying the bed? We can do real data analytics. For me that is a goldmine, the real data that we have from the back-end of our programme.” This enables the company to understand its customer profiles and therefore match requirements with what the company can source, whether it is colours, styles, or designs in order to cater to customers. “It’s all about value in the industry. We are a mass market retailer offering very good value that is very focused on local taste and styles”, Payne adds.
In gaining access to such valuable information, Home Centre is looking to improve productivity, getting products to market quicker, being more accurate in terms of inventory management, understanding how to get the right dosage of product in the right place, and sourcing from a variety of countries and bringing products in on time and at the right cost. “Those things are more important today, particularly as the customer has more accurate information,” says Payne.
In order to support customers further, Home Centre is now utilising 3D rendering technology. This provides visuals of customer apartments with products so they can see how buying particular products will impact their living space. Payne explains that such investment has been increasingly valuable for both the customer and Home Centre: “It solves a lot of problems for people - they can buy furniture that will fit their apartment. Technology is helping us be more productive and providing better interactive services to the customer, but data is the key to a lot of this.”
However, with customers gaining an increased awareness and access to information on where to buy products which are priced more attractively, the market has become increasingly competitive. Payne explains: “When customers shop online, they are also looking at other countries and how much products might cost them. They are comparing prices for goods in other markets, so you have to be competitive in getting your pricing and costs aligned, which starts to affect where our sourcing decisions come from. How much more local sourcing can we do to reduce transportation costs, reduce lead times - it’s amazing what effect that’s having on the thinking and strategic sourcing.”
To improve inventory management, which would then positively affect areas such as cash flow and shrinkage, Payne believes a number of new technologies will be adopted within the retail market, such as Radio Frequency Identification (RFID), currently utilised by a number of clothing companies, such as Marks and Spencer, Decathlon and Zara. Replacing current barcodes, Payne explains: “This is the chip in every product that has a unique number, so the idea is rather than knowing that I’ve got 10 of an existing product in stock, in future it will show exactly which 10 they are and where they are, so you start having more traceability.”
This technology will ensure stock figures are correct, but more importantly, it will support manufacturing errors which can occur with suppliers. “You will be able to trace exactly which customer has had which item, and it saves time and money in the long run,” explains Payne.
Alongside technological investment, the company’s logistics have been overhauled as a result of company growth. Home Centre is aiming to build more cost effective, safe and productive warehouses and upgrade their logistics systems. “In the UAE we have a couple of sites that we are constantly tweaking to improve our productivity,” comments Payne. However, it is vital to ensure the quality of Home Centre’s products, in addition to ensuring employee safety due to regional temperatures. The company is unlike many major retail stores, where Payne explains: “a product goes from the warehouse, into stores, then into the customer’s home. At Home Centre, we often have customers ordering in store, then receive their delivery straight from the warehouse. So, we aim to constantly improve our warehousing capabilities.”
Home Centre manages a vast number of its services in house, such as a logistics team, as well as having a fleet of in house delivery trucks and ability to assemble furniture through its carpenters. Payne explains how the company is unique. “We are different to European markets where the deliveries you have to pay for. Here, there is an expectation that if someone orders a bedroom suite, we will come deliver it and assemble it.”
Payne reflects: “The one thing that Home Centre and a lot of retailers have to get right today is their supply chain. If you can embrace technology in the supply chain in this new world that’s been changing in the last six years, then your future looks bright.”
Although based in a number of different countries, Home Centre continually works as one multicultural unit, which can incorporate some challenges in working towards the same values, operations and policies. Through treating the GCC as one large network, rather than different countries, Home Centre has ensured consistent and successful communication through a mixture of channels such as email and tech video conferencing. Payne ensures he is close to all teams, flying to the Kingdom of Saudi Arabia (KSA), Qatar and Bahrain to spend time with store teams and personnel, before flying back to the head office in Dubai. To ensure he is regularly in touch with consumers, Payne admits he even visits customers’ homes every quarter to gain insightful feedback. “Communicating those types of things back into the business helps us to learn,” he adds.
Home Centre has undergone significant growth and expansion, with an increased number of stores built within existing markets, alongside the remodeling of current stores. The company is also looking at new markets and product categories. It has embarked on a transformational change, to deliver a new range of products and services, which has now come into fruition with the launch of their new concept flagship store, based at the Mall of the Emirates in Dubai. Payne comments: “If you ignore developments and the importance of managing stocks and inventories correctly, then it doesn’t matter how good you are, you will let your customers down and they will go and shop elsewhere. For me, supply chain is the key to unlocking the potential in the market.”