Lékárna.cz: Reviving our company with reliable data
by Jiri Vicherek
by Jiri Vicherek
Here at Keboola, we have never shied away from taking an often unorthodox approach. Case in point is one of the methods we use to scope out businesses that could use our help. By scanning Czech e-commerce sites, we can easily discern between the companies already employing data tools, and the ones who are not using the data available to them to its potential. For the companies in the latter category, we are always happy to step in with a helping hand. Lékárna.cz has been the beneficiary of said method.
Lékárna.cz is the first Czech online pharmacy which allows customers to both purchase medicine and solicit advice from experienced pharmacists. When we first were in touch, they were going through a tough time and were complete novices in regards to data. We changed that. They are now placed within the top 15 online stores nationwide, thanks to their transition to data-driven company.
We talk to company CEO, Karel Klodner, about this successful transition.
You have been running Lékárna.cz since 2013. How has the company changed in that time?
That year was the first in its twelve years that it did not make year on year growth. It was a tumultuous time, considering that years prior, turnover reached as high as 300%. Until then, there was little in the way of competition.
As soon as predators entered the field, the so far smooth journey of success came to an end. As a company we had stagnated and radical improvements were required, forcing into play a reshuffle of our workforce and an overhaul of how things were done. This started with changes to the workforce but, inevitably, we had to revolutionize the way in which we used data. The way we work now looks vastly different to how it did those years ago.
Where exactly do you see the biggest advancement?
Certainly in the way we handle our data: our previous approach was far more simplistic. We were successful, so where was the need for comprehensive analyses? Basic invoices were checked to prove that income exceed outgoings and that revenue was high, so why fix something that is not broken?
When the money started to dwindle, we knew we had to dig deep for better solutions. We lacked even the elementary data, on our margins, shipping payments, channels. We knew the answers lay within the data but had no means by which to effectively extract it.
Using solely Administrative Interface, each manager had their own set of statistics from which they drew data. This basic approach lead to a distortion of figures company-wide figures, since they were not drawn from the same database. There were around 15 interpretations of gross margin floating around simultaneously and it became clear that an improved system was required so that we could take a big step forward with our data collection and analysis.
So you contacted Keboola to help with the data?
Keboola were the ones who contacted us! Their solutions appealed to me immediately. I was eager to start cooperating with them, as soon as my initial in-house changes at Lekárna.cz were implemented.
What was the most difficult aspect of introducing the data changes?
There were certain things we didn’t have to deal with as a small e-commerce site, but once we grew these things became important. As our original system only took into account the rudimentary figures, we had to start incorporating more sophisticated data sets. At the same time, it was necessary to conglomerate all of our data and ensure that all employees were working off the same facts.
Our new ERP system was introduced, which took a little time. We are now able to take into account many varying factors: various time shifts, discount calculations, valuation of warehouse stocks, etc. This improved analysis has undoubtedly given us the tools by which to instil growth.
At which point did Lekárna.cz cross the boundary from being a small e-commerce retailer, run almost by intuition, to a large one that demanded a re-setting of this nature?
The turning point for us was when our turnover hit 250 million Czech crowns (over $11m USD). We not only needed a proper database, we needed to change our mindset. Our leisurely approach to things had stop.
Contending with new management was tough for some employees, who had been accustomed to the old way of things. Change is not easy and many members of staff jumped ship. Our priority, however, had to be on reviving the business. Our competition was making strong decisions based on quality data and to stay in the game we had to follow suit.
How long did it all take you?
All in all, it took three years. We needed to implement ERP, develop a new website and new platforms, and simultaneously retain focus on our customers. Customers have to come first, so it meant spinning a lot of plates at once. It was a turbulent but ultimately successful time, during which we doubled our staff force and doubled our turnover!
At what stage, then, did Keboola begin helping you?
We realised in September last year that our vision for data collection was not something we could fulfill by ourselves. Several problems arose after launching new platforms which demanded attention, and we didn’t have the capacity or the know-how in-house to make data a priority. So I contacted Keboola to put experts on the job.
We had to hit the ground running. Basic reports were required as soon as possible, as data from these newer platforms were processed in Tableau and were not in a usable format at all. We required data presented in a real time, daily format, instead of the mess of tables and SQL questions.
The team at Keboola were very attentive to our needs. They devised a solution and provided a dedicated consultant to build these reports for us. The data at hand may have been complex, but the setup was fast and ou new system was launched after a mere six weeks. The GoodData reports are easy to analyse, which meant we could finally detect where our profits and losses lay. The speed of implementation was outstanding, a result of seamless cooperation, thanks to Keboola.
So you now have management reporting in hand. What are you working on now?
We are still improving the integrity of the data. The entire database is undergoing some fine-tuning so that data and metrics are all uniform and can be used to their optimum.
We are also making strides with marketing reports and initiating ROI reporting. We want to know the effectiveness of our channels and sources of visitor figures. On the horizon, we have warehouse management and stock forecasts, entering into an entirely different scope which offers greater potential to improve the way we work across the board.
How would you sum up management at Lékárna.cz before you started working with Keboola and after the first few months together?
In the past we may have done our best but we were unable to take all factors into account, unable to evaluate our activities to their core, and unable to unlock the potential that lay in our data. I can now make judgements, as CEO, by numbers, using real data in real time.
In the past, I was also wary of investing and always chose the least risky option. We do not have an investment group pouring millions into experimental solutions, we are a company with an individual owner. And I was afraid of drowning the company.
Now, I finally have the tools by which to set realistic goals and to invest with much more security. Before we had data our growth stalled and, in a fast growing market, we fell behind. Thanks to Keboola, we have now caught up with and can surpass our competition. From our daily operations to our marketing campaigns, we know how to grow again. We work in a transparent way that everyone respects and trusts.
Thank you for speaking to us. We wish you all the best in your onward development!