Shoppers Drug Mart’s Prescription for Success Includes Data Warehousing
Commentary by David Holland, Vice President of Corporate Systems, Shoppers Drug Mart
Being a community-based pharmacy that competes on a national scale was the key to Shoppers Drug Mart’s success and the bane of its existence. Shoppers Drug Mart, which had amassed over 820 franchised pharmacies coast to coast, was ringing up annual sales over $4.2 billion (Canadian) dollars. Yet the larger it grew, the more difficult it became to influence sales at the retail shelf. So in a forward looking move, Shoppers Drug Mart reengineered its business—from the retail floor to the board room—and placed data warehousing at the heart of its push for increased profitability.
According to David Holland, Vice President of Corporate Systems for Shoppers Drug Mart, “We examined our business practices, operations, and the competition to determine how we could become a more competitive organization. This helped us recognize where we wanted to be in the future and what we needed to do to get there. We saw that we could improve our economies of scale by changing how we bring product into stores. This led us to put in place an information architecture that would allow us to leverage automation throughout the company.”
Shoppers Drug Mart replaced its antiquated OLTP systems with off-the-shelf applications for logistics, distribution, and accounting, which all run on the Informix Dynamic Server database. With these systems in place, Shoppers Drug Mart focused on improving category management. “We needed to understand product trends and profitability in a way we just couldn’t with our old system,” says Joe Cira, Vice President of Technology and Communications at Shoppers Drug Mart. “We evaluated conventional database technologies and determined that a data warehouse environment would best meet our needs.” The company narrowed its search down to the Red Brick Warehouse product, which Shoppers Drug Mart then benchmarked on HP equipment. “We ran our first test load of one and a half million records, and six minutes later the system stopped,” laughed Cira. “We thought it was broken. On our old database, that many records would have required two days to process. Needless to say, we were impressed. We then performed some fairly extensive query testing, which went flawlessly.” Based on the success of the data mart benchmark, Shoppers Drug Mart purchased the Red Brick Warehouse, which today serves up over 600 gigabytes of data to help the company’s category managers steer the company toward a more profitable mix of products.
The category management data mart regularly collects data from the company’s distribution and shipping applications, as well as its pharmacy, point of sale, and accounting systems. Using an OLAP tool, category managers slice and dice the information to find new ways to increase buying efficiencies.
Giving category managers better access to POS data has enabled them to create a clearer picture of how pricing and promotion decisions affect product mix. This in-depth understanding of what customers buy has helped the company reduce inventory levels and improve the effectiveness of promotions and marketing campaigns—resulting in improved profitability for the company.
When asked, Shoppers Drug Mart will tell you that it has benefited greatly from its use of data warehousing. Relying on Informix Software’s Enterprise Solutions, which include Informix Dynamic Server, Red Brick Warehouse for Data Marts, superior consulting services, and strong partnerships, has enabled Shoppers Drug Mart to remain at the forefront of its industry while positioning itself to grow in the decades ahead.