Free SAP Customer Success: Freshdirect Video Case Case Study Sample
A great deal of data is available in the form of previous customer orders, total product demand, total inventories, aggregate monetary sales, total business costs and profit / loss. However, the use of SAP database system coupled with business intelligence applications enabled Fresh Direct to convert its large online data into meaningful strategic information and knowledge such as identification of average order size, peak time slots, repeat / loyal and lapsed customers, product-wise inventory, product-wise demand, high density markets, customer preferences, past purchase patterns and behavior, high / medium / low demand products and related financial information. The online grocery retailer utilized this information for strategic planning such as eradication of past ineffective policies of making new customers, focus on repeat customers, inventory management, customer relationship management, customer enticement through YMAL (You might also like) tool and generation of financial reports (Bruno, 2013); (Laudon & Laudon, 2013); (Vickers, 2013).
Visibility into the workflow means having insights and control over the production, supply chain and logistics operations to ensure consistency through order taking to order delivery. The visibility into business processes is essential for FreshDirect because it is an online store of which success solely relies on its capability to deliver the right product quality in right quantity to the right customer at the right location at the right time without any service lapses and delays. Prior to implementation of SAP system, the company had almost negligible control over its supply chain and logistics that consequently led to poor product delivery and loss of customers. The exception screens allow customers to look preferred products and goods that are related or complimentary. It allows company to increase product demand and average order size from existing customers (Cohan, 2010).
The SAP ERP system has brought several changes across FreshDirect and positively impacted employees from marketing, production, and logistics departments. First, the business intelligence applications provide employees greater insights and understanding of purchase behavior, choices, and preferences of repeat and loyal customers. Hence, the marketing personnel could devise advertising and promotional strategies to reach right customers with right offerings at right prices. Second, the system alerts production employees to effectively track the desired produce with right demand in the right number, thereby reducing probability of missing out any product from order sheet and increasing probability of maintaining right inventories of hot products. Third, the logistics personnel could successfully track customer locations, order delivery confirmation, and scheduled time to avert delays and lapses. Overall, the employees became motivated to work at a profit-making FreshDirect as it successfully transformed itself into an enterprise where employees could succeed and advance in careers (Braddock, 2009); (Laudon & Laudon, 2013).
FreshDirect use of ERP database and business intelligence applications is directly related to its brand image because it enables the online grocer to focus on strategic management by formulating an effective mix of strategies and aligning with company resources and capabilities. In addition, the system enables the company to improve website design for user friendliness, visibility and design of workflow, marketing mix aspects, operational and supply-chain efficiency, performance- & task-orientation, and time bound results. As a result, the company could enhance its market reputation, brand recognition, brand value, and brand equity that subsequently leads to brand extension, brand loyalty and customer retention (BW News, 2013).
Braddock, R. (2009). Lessons of Internet Marketing from FreshDirect. Wall Street Journal, Available at http://www.wsj.com/articles/SB124205175154206817
Bruno, K. (2013). Inside FreshDirect’s Expansion. Forbes, Available at http://www.forbes.com/2010/06/29/freshdirect-online-grocery-braddock-cmo-network-grocery.html
BW News (2013). FreshDirect Successfully Completes Major Upgrade of Its SAP® Software in Partnership with Freudenberg IT (FIT). Business Wire. Available at http://www.businesswire.com/news/home/20131118006410/en/FreshDirect-Successfully-Completes-Major-Upgrade-SAP%C2%AE-Software#.VLZs-dKUdps
Cohan, P. (2010). Growth Matters: FreshDirect nudges its way to profits. Daily Finance, Available at http://www.dailyfinance.com/2010/03/23/growth-matters-freshdirect-nudges-its-way-to-profits/
Laudon, K. C. and Laudon, J. P. (2013). FreshDirect Use Business Intelligence to Manage its Online Grocery. In Chap. 12 “Enhancing Decision Making”, Management Information Systems. 13th edition.
Vickers, E. (2013). Morrisons learns from New York home delivery success story. The Guardian, Available at http://www.theguardian.com/business/2013/feb/18/morrisons-fresh-direct-online-grocery