DFS Digital
Transformation
A strategic partnership with DFS, helping them become a data-driven organisation.
Beyond have collaborated with DFS as their strategic data and insights partner over a number of years supporting the company in its digital transformation.
DFS Group : The leading Upholstery retailer in the UK
DFS boasts over 50 years of industry experience with a vertically integrated business model encompassing manufacturing, online and offline retail, and logistics. DFS manufactures approximately 20% of the UK's sofas in its factories and employs over 5000 colleagues, demonstrating a strong foothold in the market.
In addition to grappling with legacy systems and disparate data sets, DFS faced the imperative to transition into the digital age. Enhancing their website and streamlining the customer journey across all channels became paramount. Despite their extensive experience, the lack of integrated systems hindered efforts to optimise the website and ensure a seamless customer experience regardless of the chosen browsing or purchasing channel.
Manual data gathering and siloed reporting compounded the challenge, necessitating a comprehensive solution to propel DFS forward in the digital landscape while maximising operational efficiency.
The Digital Transformation journey
DFS embarked on a mission to leverage their data and transform into a truly data-driven organisation.
In 2017, Beyond joined forces with DFS to kickstart this transformative journey, becoming an integral partner to the Group ever since.
Together, we've closely collaborated with the Group Leadership Team to craft a data strategy that aligns with the Group’s strategic vision, ensuring success in the short, mid, and long term.
Recognising the significance of achieving quick wins and incremental improvements along the way, the focus remained on demonstrating the tangible value of data utilisation and the impact of data-driven decision-making on the bottom line.
This collaborative and iterative approach has not only fostered a culture of data maturity within the organisation but has also propelled DFS towards realising its full potential.
Navigating DFS’s challenges
The data challenges for DFS could be grouped into 4 key themes;
TRUST
There was a lack of trust and confidence in the data being shared and reported. This was due to siloed and disparate data sets and legacy systems that surfaced inconsistencies.
ACCESS
Access to BI tools were limited &/or restricted. Static reporting was more widely available but may not be providing the information that was required.
ABILITY
There was a very small team of information architects and engineers which became bottlenecks for the organisation. There wasn’t a culture of self-serve or an ability to carry out their own analytics.
DESIRE
A barrier to success for any digital transformation has always been people’s resistance to change. Many employees with significant tenure in the business did not understand the value that a data driven organisation could deliver.
Sales and Operational Efficiency Transformation
The existing reporting solution that tracked individual and store sales performance was legacy system-based and extremely time-consuming to produce and validate. This meant that Operations Management through to Store Management and Sales Colleagues were ‘flying blind’ every month and were unable to track how they were doing against target and where they needed to up their game.
Beyond were engaged to completely re-vamp this solution creating an analytically driven decision support solution for managing operational performance. This involved the collation of multiple data sets from a range of different legacy systems and the development of a data solution to accurately calculate, track and benchmark sales performance down to an individual product line.
A completely automated, self-serve solution was developed allowing stores and individuals to understand performance and gaps to close on a daily basis. An additional benefit was the ability to identify top performers within individual networks who could provide training and assistance to less experience colleagues.
Results
15%
Increase in sales performance
12%
Uplift in productivity
Commercial Process Mapping
DFS faced a lack of clarity in process ownership and responsibilities due to frequent operational changes, causing inefficiencies and confusion.
To understand this, a full process and data mapping audit was executed including a comprehensive interview process across the whole business.
This enabled the development of an end-to-end process map, illustrating how the business operated and highlighted opportunities for improvement based on value added activities.
A new map was devised showing the ‘art of the possible’ with a series of ‘quick win’ projects proposed to fast track the change programme, as well as the instigation of longer term, more strategic initiatives.
KPI Dashboarding
Following the process mapping a series of dashboards were developed employing a BI tool to enable DFS to plan, execute, analyse and track its initiatives within a unified infrastructure.
This was delivered as part of the Quick Wins programme to enable different teams to embark on their data journeys.
These dashboards extended across the business to include:
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Range planning
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Digital
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Media and Marketing
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Test & Learn reporting
Customer Advanced Analytics & Insights
Beyond became the Group's Insights and Analytics partner, collaborating across all business units to refine strategies with a customer-centric approach. Their contributions have bolstered DFS's sustained market share growth. A selection of key insights topics includes:
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Promotional analysis for strategic promotion planning.
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Evaluation of incremental sales potential across various lead time options.
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Store clustering for enhanced range assortment.
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Analysis of abandoned basket customer profiles and journey.
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Insights into product style groups to inform product strategy.
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SKU-level insights aiding range rationalisation.
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Comprehensive customer omnichannel insights.
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Assessment of interest-free credit options for optimal customer offerings.
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Category-specific customer insights informing new product development and placement strategies.
“There are lots of companies out there who can do big data stuff and we get them all the time every week talking about big data, what they don’t do is apply it to show how to make better decisions day in day out. I think it’s the application of the thinking based on the understanding of the business and based on good relationships that means that Beyond are like an intel inside of smart data people with the right tools who can simplify the things that we do”
Tim Stacey
Group CEO - DFS
Building a Future-Ready Data Infrastructure
DFS had an ageing infrastructure that was no longer fit for purpose. Fragmented, complex, and poorly documented processes meant it was also difficult to support and had limited development capabilities. This disparate infrastructure was restrictive to future business growth.
The solution was to build a modern data infrastructure using Google Cloud Platform. A full data management process redesign, creating a central repository for all master and reference data.
This delivered a single trusted source of truth with common business terminology and definitions. Increased reliability and stability in the data load process also reducing technical debt. This provided rapid time to value from new data sets and a scalable infrastructure.
This resilient, trusted data platform is the grounding to deliver innovative data products for DFS
“The platform from Beyond leverages our two greatest assets: Our people and our data, leading us towards a data-driven transformation of our day-to-day activities”
Russel Harte
Group COO - DFS
Omnichannel performance by location
Due to an increasing share of orders taken via the online channel, DFS needed to understand the performance of on and offline purchasing by location.
DFS wanted to offer an integrated retail experience to the customer, so understanding how the online customer shopper interacted with the website and bricks and mortar was a key area of insight.
Beyond combined DFS transactional data, GA data, store location information and open-source geographical data to develop a statistically robust and commercially sound methodology to define catchment areas around physical stores.
This allowed DFS to analyse performance in a unified way and drive a smoother customer experience across different channels.
Growth Engine
Our solution began with the aim of enabling hyper-local targeting for DFS, shifting away from national advertising to focus on areas with higher potential for return on investment (ROI).
Utilising the Catchment area methodology, Beyond integrated additional third-party datasets with DFS's data to develop a machine learning (ML) model.
This model assessed areas with the most headroom opportunity for additional revenue based on current performance of;
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Market Share
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Average Order Value
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Conversion rates
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Footfall
Growth Engine
development progressed, it became evident that the solution offered broader value across the organization.
The Hyperlocal marketing tool evolved into the Growth Engine for DFS.
This surfaced;
•Areas for operational improvements.
•Target areas for marketing efforts to increase traffic both in-store and online.
•Customer cohorts requiring product offerings not currently available.
•Additional support for new store location planning – providing insights to validate incremental sales opportunities while assessing the risk of cannibalisation
Ultimately, the solution empowered DFS to make informed decisions, optimise resources, and drive sustainable growth across its business operations.
Growth Engine
31%
Increase in sales between 2012-21 whilst reducing overall spend by 25% - Long-term marketing effectiveness & ROI
£300m +
Revenue opportunity identified
+2%pts
Market Share Growth
FY23
Marketing and Digital Media Optimisation
Data-Driven Marketing Strategy: A revamped marketing approach, focusing on regional preferences and digital channels, significantly reduced costs while improving ROI.
An example of optimisation: PPC profit bidding.
DFS wanted to use profit levels within the return on ad spend (ROAS) bidding process to support increasing market share and drive further revenue.
The smart bidding algorithm was using revenue only. By automating the process to show the profitability of pay-per-click (PPC) conversions would allow DFS to react more quickly to market and profitability impacts, rather than the current 5-week lag.
Beyond addressed this challenge by first developing a Cancellation Prediction Model to exclude potentially canceled orders from the profit calculations.
Subsequently, Beyond crafted a Profit Model to forecast the anticipated profit of delivered orders in the future.
This order profit data will then be pushed back into Search Ads 360 to support the smart bidding optimisation.
This initiative not only resulted in increased profitability and efficiency but also enabled more agile, data-driven decision-making, positioning DFS as an industry leader in digital advertising optimisation.
Lead optimisation
DFS receives significant traffic to their website each week and it was vital to understand what proportion of these visitors were at which stage of their purchase journey.
Through a series of analysis and insights, Beyond created an Opportunity segment classification based on visitor browsing behaviour to identify those visitors who are closer to their purchase decision compared to those who are at the early stages of their journey and just looking for ideas and inspiration.
These segments are then used to tailor and target messaging more relevant to the visitor’s purchase funnel stage.
The results were a higher conversion rate online with less lost opportunities and a better customer experience with more relevant communication to guide them through the purchase funnel.
Sustainability through Data
DFS already had a strong focus on ESG. Across their 200 sites, they were running a decarbonisation programme but felt that their current control strategy was decentralised and inconsistent. They had Building Management Systems in 30% of their stores, utilised “last man out” switch approaches and had a series of assets on timers.
Beyond audited the full portfolio and designed a smart infrastructure system including the use of sensors, external data sources and building management software.
Once implemented across the entire estate this established an independent data layer (IDL), bringing together DFS’ siloed data from its systems into one manageable ecosystem. This turned sites into data rigs, meaning it was possible to reduce energy consumption by optimising the air quality, humidity and temperature controls for each site.
The data is integrated with cloud platform for reporting and proactive maintenance and automated alerting and scheduling of engineer callouts.
Sustainability through Data
-27%
Reduction in energy consumption
1,100
tonnes CO2 per annum reduction across the estate (equivalent of over 400UK domestic homes p.a)
-18%
Reduction in callouts for
re-visits by engineers
“The structured and pragmatic approach to this project has allowed DFS to unlock a wealth of unrealised potential in a short space of time with a process that has been full of energy and fun where work no longer feels like work. We are tracking at 27% savings on power consumption to date and are starting to re-use the Smart Infrastructure to deliver Insights to drive increased revenues.”
Head of Property and Contracts, DFS Group Ltd
Lessons Learned
The next phase of our journey
Using sophisticated data analysis techniques to anticipate potential outcomes and trends, allowing the DFS group to proactively shape strategies and responses to various scenarios.
By harnessing the power of predictive analytics, the DFS group gains a strategic advantage by preemptively navigating uncertainties and capitalising on opportunities in the ever-evolving marketplace.
Interested in becoming a data driven organisation like DFS?
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Group CEO
