Case Study: Optimization of processes at AIKO and Moemax

07.06.2021

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Категории: Case studies
Case Study: Optimization of processes at AIKO and Moemax

AIKO is one of the most recognizable brands in the furniture sector in Bulgaria for over two decades. The company was established back in 1993, starting with its first store occupying a modest 15 square meters. By the beginning of 2021, the AIKO/Mömax group launched a logistics center covering a total area of 19 hectares. Presently, AIKO is among the top 5 retailers in its industry in Bulgaria, even with the presence of global furniture giants in the country for many years. Their success is a result of unwavering dedication, exemplified by their partnership with XXXL Lutz, which began in 2015. Since then, AIKO has become part of the group of one of the world leaders in the furniture industry and trade. As for Mömax, it is a youthful brand with a distinct concept that operates as a subsidiary of AIKO, formerly known as Mobbo until 2016.

The Lutz Group in numbers:

After that introduction, one would probably expect an article about a large-scale project for migrating an existing online platform to Magento, and it wouldn't be far from the truth. However, the more interesting aspect in this case is the solutions we constructed and executed together with the AIKO team for their new online stores for the furniture brand and Mömax. These solutions added significant value and showcased our years of experience, specifically with Magento and in the eCommerce industry in general.

How did it all begin?

In 2019, a year that proved to be highly successful for us, AIKO reached out to us with a clear objective but without a specific assignment. This confirmed a trend that we continue to see even today – big brands with complex projects often struggle to prepare a concrete assignment and define the scope of the future work. One positive aspect, however, was that AIKO provided us with highly qualified contacts, including technical personnel, who would be involved in the execution to some extent over the following months. With their assistance, we managed to present our concept for conducting a detailed discovery phase of the project to the management.

The discovery phase

Forming the MVP and aligning the projects of AIKO and Mömax (which had to use the same core but a different Magento instance) took us around two months of work. It is important to note that we identified the transfer of offline business specifics in the furniture industry to the online environment as the biggest challenge. Until then, AIKO mainly had an online catalog with the option to place orders, but there was a lack of automation in the internal company processes that followed the receipt of online orders. The call center was burdened with extensive additional communication related to order processing, from inquiries about product availability and delivery times to calculating shipping and installation costs, among others. While similar projects in the West involve multiple software systems working in sync, we had the opportunity to start with a setup that was popular in Bulgaria:

• eCommerce softwate: Magento 2 Open Source
• CMS: Magento
• ERP: Universum
• PIM: initially not used
• OMS: no separate OMS, but an internal application at the client's that further synchronized data between eCommerce and ERP

The reason we mentioned CMS as a separate point will become clear a little later in our article.

With this configuration, we were ready to start working and had a clear understanding of the biggest challenges in the project.

The major challenges

Splitting the cart/order

The need to split the order in this business is driven by the different delivery times for the various products offered by the merchant.

The delivery time for each product is dynamically extracted from the ERP system and is visible to users in their shopping cart. This creates two separate orders - one with a short delivery time and one with a long delivery time. An additional option (Fig. 4) for users is to move a product from a short delivery time to a long one to receive only one delivery, which is essential when planning the furnishing of a home. The reverse option, of course, is not possible, as we have implemented restrictions.

In this specific scenario, we have chosen to add a painting to the cart, which is assigned to products with a short delivery time but cannot be moved to those with a long delivery time because it represents an exception to the case. AIKO themselves manage these exceptions as there are products whose delivery they do not want to delay (usually fast-moving products).

Reverse checkout

A logical extension of the option to split orders, which leads to customizations in the cart, is the biggest challenge in the project - reversing the logic of the checkout process. As a reminder, in both Magento and generally in eCommerce software, the standard checkout process starts with entering customer data, then proceeds to delivery information, and finally, the payment method for the given order is chosen. At AIKO, as seen in the screenshot, the process begins with selecting the payment method, and here again, there are restrictions based on the products in the cart. In this specific case, cash on delivery is not available because there is a product with a long delivery time, and such products require prepayment. In other scenarios, for example, the option for installment payment may be missing if the value is below the minimum for financing.

After selecting the payment method, the customer's personal data is entered, including their city. At this point, based on the entered data and the products in the cart, the system displays the available delivery methods for that order. As we have products with different delivery times, there are also different delivery methods available for the two orders that the customer places. For courier delivery with Econt, the office nomenclature has been implemented to facilitate easy selection for the customer and automatic generation of shipping labels. Due to the characteristics of the products with a long delivery time, only AIKO's transport option is available in the cart for them. This logically leads to different delivery prices for each of the orders, which are displayed precisely for the convenience of the customer.

Upon completing an order of this type, the customer enters one order in the online store, but in the ERP system, two separate fulfillment requests are generated. We accomplished all of this within the One-Step-Checkout, which is not the default option for checkout in both Magento Open Source and the enterprise version of Adobe Commerce.

Dynamic pricing for services

Another interesting option that we had not encountered anywhere in an online furniture store and had to implement is the dynamic recalculation of prices for additional services for an order. As you may be aware, services such as installation, for example, are in high demand but poorly offered in online furniture commerce. The reason for this is that most merchants work with partner companies for installation, and calculating the price is difficult to automate. Here, AIKO showed a truly forward-thinking approach, and we, on our part, implemented the following concept:

  • The customer requests the installation service on the product detail page when adding the product to the cart. The service has an approximate minimum value, which facilitates decision-making;
  • After entering the city in the checkout, the online store "communicates" in real-time with the ERP system, which sends it the updated price for installation. If installation is in a remote area, based on AIKO/Mömax's store network, travel and other expenses are taken into account, and the customer is notified of the future cost;
  • The customer completes the order and pays the entire value using the chosen payment method.

Complete room furnishing

The option for complete room furnishing was extensively discussed with the client, and we explored various implementation options, including ones requiring significant customizations of the system. In the end, we managed to achieve room furnishing by using the classic Magento bundle product. We had to personalize the design and ensure that the price of the installation option changes based on the user's selection within the bundle. The availability of items at different locations needed to reflect the status of each product in the bundle at each AIKO store, which also required customization of our inventory by store module, used in other projects as well.

Rich content and interactive category pages

In most eCommerce projects, the content part is often overshadowed by the focus on the product catalog. However, in this project, we had to create content-rich and diverse category pages for some product groups in AIKO/Mömax. An example of this is the "Custom Kitchen" category, where we present content in several consecutive levels using a mix of banner widgets, textual information, videos, call-to-action buttons, and even an interactive wizard for scheduling consultations.

Although the project doesn't use Adobe Commerce's Page Builder, which is recommended for similar implementations, it fully leverages the CMS capabilities of Magento 2 and some additional extensions to achieve this result. This is why we mentioned the CMS as a separate point in the project setup at the beginning of the article – such content often requires integration with a separate content management system, but here, we managed to implement it without this fundamental complication.

ERP synchronization

As implied by the discussed functionalities, the project is powered by a deep ERP integration, which we have visualized in the diagram. Notably, there is an additional middleware software with its own interface, which interacts with Magento's API and the ERP system's database, streamlining certain processes related to queries, performance, and bulk commands.

Digital transformation

Although it wasn't the primary focus of this case study, the outcome of our work on the online stores of AIKO & Mömax led to a true digital transformation of this over 100-million business, and we take great pride in it. In this regard, we provide a brief summary of some of the changes, part of the transformation, and we cannot overlook the words of the company's management, stating, "We seamlessly integrated online activities into our internal business processes and did not need to make any adjustments to them."

Did you come across anything that surprised you in this project? Share your thoughts in the comments below the article.

If you also want to initiate a digital transformation for your online business or if you are already implementing it but need platform migration, do not hesitate to contact us right away!

About the author:

Dimitar Dimitar Dimitrov

Dimitar Dimitrov has been a partner and Commercial Director at STENIK since 2006.

Over the years he has gained valuable experience as a web consultant, successfully finding new clients and maintaining relationships with existing clients. He has also participated in the development of a number of major projects ranging from Douglas, Ozone, AIKO, Tehnomix and more. Dimitar's strength is advising clients to integrate online stores with various ERP systems and warehouse software.

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  • Rumyana

    30.10.2021

    Mnogo hubav sait

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