Bilka Headed Towards the Digital Supermarket

They started with books. Now, Bilka is expanding the established E-market success at bilka.dk with even more goods to shop from. The course has been set towards the digital supermarket.

Computerworld DK recently investigated the level of satisfaction of Danish people with web-based bookshops. Bilka won the 1^st place for its web shop with 65,000 items. Bilka.dk is powered by Ciklum whose employees in Pakistan have programmed the solution. IT- and business-wise Bilka will use this experience in their broad E-market focus.

"We are proud of the results of the research. Especially because it is our customers who judge us on two as important parameters as price and delivery time," says responsible for Bilka's E-marketing, Per Borup. "We notice that users praise us for the classical virtues of sound business practices. That is exactly the way we want to be seen online. Basically, we view the web shop as a new branch. All the usual rules as to how to create happy customers apply online as well."

Microsoft and Ciklum

To sell books at bilkashoppen.dk (today bilka.dk) was more like a test that Bilka initiated in their wish to lower costs and gain experience in E-marketing. The web shop was started in 2006 with Ciklum as an IT supplier and became fully active in 2007. The Danish law sets a limit as to how many physical shops Bilka is allowed to open and this contributed to the desire of Bilka wanting to expand with a web shop. The business part is run by a strategy group in management, while the IT department is involved in the implementation.

"We prefer to build it all on one standardized platform. Our strategic suppliers in this area are SAP and Microsoft, and we chose Microsoft Commerce Server as a platform and Ciklum as the supplier," says Kim Nissen, Head of Systems Development in the IT department of Dansk Supermarked.

Pakistani development

The project was run with 10 developers in Pakistan and a chief project manager at Ciklum in Denmark. The project started at GEOPAQ, which Ciklum bought in January 2007*. Ciklum has added professional project management and have focused on adding more competences within Microsoft Commerce Server. Bilka did not want to revolutionize things. On the contrary, Bilka wanted to create a simple and user-friendly shop to 98% of its target audience.

"We went for maximum user friendliness. Our prime focus has always been the target audience of the shop, and therefore we carried out our development with a great focus on the customers. The target audience was with us during all phases of the development process, including service release and marketing. That meant that we ditched the "fancy" solutions and instead focused on simplicity," explains Kim Nissen.

Now Bilka is left with an E-marketing success within the book area. Commercially, the volume was far greater than estimated, and the bestsellers by the author named Stieg Larsson have greatly helped to achieve this success. Internally, Bilka gained experience with an IT platform of a web shop and built valuable competencies.

"We learned a lot," states Kim Nissen.

Outsourcing continues

Bilka has also had a positive experience with outsourcing to Ciklum. Even though the project had its problems, Bilka maintained the cooperation model all the way through. Today Ciklum solves maintenance assignments and continues to develop new functionalities for Bilka and Dansk Supermarked. Ciklum's experts also perform 2^nd level support.

"New functionalities are developed in a framework agreement with Ciklum. This means that the Lahore team in Pakistan is coding new functions into the shop. My programmers work well with Ciklum, and all parts - except for the integration into our ERP at Dansk Supermarked - are made by Ciklum. Our solution architects are working closely together with Ciklum because most of our code work is done externally," says Kim Nissen.

Dansk Supermarked is happy with Ciklum's quality as the cooperation model lives on into the next phases of Bilka's online rearmament.

"The operation of the web shop and the ability to deliver massive development capacity are not our core competences. The new platform will be laid out externally and the development and operation are given to partners," says Kim Nissen who uses IBM for operating bilka.dk.

The first web supermarket

Bilka will work on their presence in E-business. In principle, all 100,000 items could get on the E-market, but the complexity grows in relation to logistics and service for each group of items. The web shop, when measured as an IT project, is 20 times bigger than the bookshop because of the logistics dimension. Bilka will start with traditional goods but one can expect to find all kinds of non-food goods in Bilka's web shop in the future.

"We look at product categories one at a time. We do not wish to change consumers' behavior but we do want to give them more opportunities to be able to get in touch with Bilka and purchase from us. It would be ideal if the physical shop and the web shop melt together in a "whole" experience to our customers," says Per Borup who is in charge of Bilka's E-markting activities.

Not until the logistical challenges in a given product area have been overcome shall Bilka open up for the goods on the E-market. The book is especially suited for E-business purposes and this, combined with a visionary product manager, paved the way for Bilka's first E-business success. Not many department stores go down that road and therefore Bilka may be the very first to have the whole store as a web shop.

Reference date: January 2010

* In January 2007 GEOPAG was bought by Mondo A/S. In December 2009 Mondo A/S was bought by Ciklum ApS.

« Back