Uğur Serkan Taşkın, Director of Koçtaş Information Technologies and R&D, stated that analytical infrastructures that allow forecasting models to run are their key points, saying, “Artificial intelligence and machine learning based on analytical infrastructures are among the subjects we invest in.” We create systems based on algorithms, artificial intelligence, and machine learning for a wide range of applications, including product recommendation, logistics optimization, stock level optimization, inter-store transfer modeling, and pricing.”
Murat YILDIZ
Uğur Serkan Taşkın, Director of Koçtaş Information Technologies and R&D, graduated from the Computer Engineering Department of Boğaziçi University and worked as a Senior Consultant at Arthur Andersen Management Consulting Department for three years. Taşkın began his 12-year Turkcell adventure after managing the e-Business solutions section at Veripark for two years. Uğur Serkan Taşkın has been working in IT and R&D at Koçtaş for 3.5 years, having previously worked as the Information Systems Manager at Global Bilgi, Assistant General Manager at Turkcell Superonline and Turkcell Teknoloji, Director at Turkcell Europe, and Technology Coordinator of Group Companies at Turkcell. He continues to serve as Director of Development.
We spoke with Uğur Serkan Taşkın about Koçtaş’s new adventure, digital transformation, and the year 2020…
We recognize Koçtaş as one of Turkey’s largest construction marketplaces; can you tell us more about it?
Koçtaş is a long-standing company. It is also one of the Koç Group’s founding firms. There was a business model for retailing construction supplies when Koçtaş was created in 1955. It entered the retail industry in 1996. While achieving retail expansion, a partnership arrangement was developed in 2000 with the Kingfisher group, one of the world’s top three home improvement retailing firms. The Kingfisher Group is a large conglomerate with 1,300 outlets and about 80,000 people spread throughout nine European nations, including England, France, and Russia. As of now, Koçtaş is Turkey’s market leader in the home improvement sector. While we provide service through our large Koçtaş stores and neighborhood Koçtaş Fix stores in many cities, we reach all cities through our digital channels and connect our clients with our products and services.
Where are you on your new journey from wholesale to retail chain, and possibly to an international structure?
Koçtaş has evolved into a retail chain that serves over 10 million people while continuing to operate on the previously indicated wholesale business model. E-commerce had entered a new phase both globally and in Turkey as smart phones and mobile internet were more widely used in the 2010s. Koçtaş’s second phase transformation began here. The e-commerce channel has enabled the establishment of an infrastructure capable of serving the entire country of Turkey. We are now on our way to the next phase. Our retail structures and digital channels, which were formerly different channels, are merging. Omni channel – We are approaching a phase of digitalization in which we will provide more value to our customers by providing the same experience in both online and physical stores using a holistic channel design.
What will be different during this time of digitalization?
To begin discussing this, it is necessary to first identify the contrasts between Koçtaş and other participants in the field. Our company goes well beyond the typical purchase and sell retail chain model. Retail establishments that conduct this type of work in other countries are known as “DIY – Do It Yourself,” or home improvement stores. People enjoy painting, home renovations, minor furniture design, and gardening, especially in foreign countries. Rather of being a consumption notion, these stores appeal to people who want to create something for their own house.
In Koçtaş, you can discover a cabinet that meets your demands, as well as the materials needed to renew or repair your existing cabinet. We currently offer this service through our 39 large format stores in 19 different cities. In recent years, we have established a format known as Koçtaş Fix, which we might characterize as Koçtaş’s local face. In these businesses, we offer all of the products required by craftspeople and those looking to upgrade their houses in smaller square meters. The distinctions in digitalization begin here.
So, what are your plans in this situation?
Koçtaş focuses on giving customers the finest experience at the most inexpensive costs when it comes to home improvement. OmniChannel, our all-encompassing channel management methodology, comes into action at this moment. We want to put our customers first and provide the same experience across all channels. On one side, we have huge local stores, and on the other, we have our e-commerce site and mobile applications. All of our stores also have kiosk sales. Our customers can have any product they purchase from koctas.com.tr or kiosks delivered to their home or any Koçtaş store of their choice. You can also buy the product you have in your shopping cart online from a store.
As part of our Omnichannel strategy, we develop platforms where our clients can receive additional services in addition to product sales. For example, you may now easily access the master you require for a repair or replacement in your house thanks to our Masters mobile application. This app is free for everyone to use on iOS and Android devices.
“Our number one priority is to be a firm that makes a difference in the client experience.”
How did the technical team evolve while going through this entire process?
Our first objective is to be a firm that makes a difference in the customer experience. This is the foundation for all of our initiatives and efforts. To create a distinctive client experience, we continue to invest in the holistic channel on the axis of digital transformation. On the basis of this shift, we are attempting to be technologically prepared while also undergoing a cultural transformation.
We have made major expenditures in our IT personnel, particularly in the previous three years. We developed a team that can cultivate its own internal resources in important areas and build technology internally, as opposed to an approach that heavily relies on outsourcing and buying ready-made technology. Our IT workforce has nearly quadrupled during this process.
In addition to strengthening the IT team, I’d like to highlight two significant transformations. One of them is that, as of the end of 2018, we are an R&D center. Keeping our know-how in-house while creating new technologies, as well as limiting our reliance on foreign suppliers, gives Koçtaş a considerable competitive advantage. Another significant change is our drive to become an Agile Company, which began in 2019. We sought to develop teams that are far from hierarchy, have their own autonomy, can take initiative, and move forward by regulating their swift decisions at specific times with our Agile transformation approach, which comprises “agile” behavior, “agile” knowledge, and “agile” management. The transformation process, which began with nine teams, will be completed with more than 12 teams by 2020.
The retail industry is always changing, but what will be the next big thing?
As more multinational firms enter the market and expand their operations in Turkey, supply, sales, and delivery experiences will diverge. In this setting, I believe that increasing competition will propel the entire business forward.
Can there, however, be a faster conversion in e-commerce?
Digitalization and e-commerce are fast advancing over the world. Looking at this axis, we can see that online business is expanding and displacing traditional commerce. In this regard, Koçtaş also takes swift action. Our OmniChannel strategy exemplifies this. We must, however, pay attention to this as well. Many firms that began as exclusively e-commerce platforms in Turkey and elsewhere ultimately expanded into physical locations. To put it another way, physical stores should not be taken lightly. There will always be a need for physical stores, and how you blend the internet and physical worlds in your plan will be the most important success aspect.
However, as far as I can tell, the roles of the stores have also shifted?
Yes, stores are no longer only venues to sell under the OmniChannel approach. For example, our clients who are unable to visit the stores during the day prefer to purchase their necessities online. Cargo businesses, on the other hand, aim to deliver even when they are not at home. This is a critical issue. At this moment, our OmniChannel infrastructure allows us to implement a variety of solutions. On his way home in the evening, our consumer can pick up the product he purchased on our e-commerce platform from one of our stores, which are open till late. In addition to receiving from the store, many new possibilities enter our life, such as returning to the store, physically evaluating the product, and placing an order over the kiosk if the desired color or model is not in stock.
So, is this product available in every store?
Our entire organization has been deduplicated using a virtual warehouse. We secure the availability of a product at any chosen place in this manner. Of course, this promotes client satisfaction.
When it comes to consumer satisfaction, how do you quantify it?
We’ve been using NPS (Net Promoter Score) to measure customer satisfaction in real time for a long time. We send an SMS to our consumer shortly after he exits the cash register to learn about the level of service he received. As a result, we can view our clients’ satisfaction rates on the dashboard in real time. As a result, the central management team may swiftly take action to increase this rate. In addition to client happiness, we track employee satisfaction and strive to improve it.
How does digitization help in that area?
We were one of the first retail chains to provide free Wi-Fi to both store personnel and customers. Wi-Fi is critical in the construction industry. The store interiors are massive. Both the client and the employee should be able to use the Internet from any location to obtain product information. Within the scope of the “bring your own device” concept, we allow our employees to use their personal devices within business applications. They can access applications much more readily thanks to the workplace Wi-Fi network. This also allows us to get to know our customers a little better.
Our client recognition rate has grown to 90% thanks to the applications we’ve introduced.
How did it allow you to become acquainted with the customer?
We barely knew 7% of our clients three years ago. We have boosted this rate to a serious level of 90% thanks to the apps we have implemented. We have information such as which customers visit the store more frequently and which things they purchase; we are forecasting what else it may require in the near future. For example, when a consumer begins to purchase cardboard boxes, we can gain insight into how he can transform his home and which portions of his home he can refurbish based on the departments he visits.
What software do you employ to manage all of this analytical power? I suppose things will grow more automatic as time goes on?
Our specialization is in analytical infrastructures that enable us to better understand our clients and processes, as well as run forecasting models. Among the issues in which we invest are artificial intelligence and machine learning based on analytical infrastructures. On a wide range of themes, including product suggestion, logistics optimization, stock level optimization, inter-store transfer modeling, and pricing, we build systems based on algorithms, artificial intelligence, and machine learning. These problems are almost unavoidable in retail. In addition to this, we work on a variety of other topics, such as estimating from human resource data and estimating models for determining store locations.
On the other hand, many processes are becoming digitized as a result of the contributions of technologies such as RPA. Many functions can now be automated thanks to the integration of artificial intelligence and digitalized business processes.
Is it true that retail cannot exist without digitization?
To put it another way, if you offer 100,000 products, it is no longer possible to handle their pricing, competitive analysis, stock, and supply processes using old methods, even excel tables. On the one hand, the e-commerce ecosystem is expanding. Given all of this, digitization is unavoidable if efficiency, operational precision, and growth are to be achieved.
In-store experience requires digitization.
Our consumer, for example, will purchase a kitchen cabinet. We must direct him to the appropriate aisle, provide product varieties that meet his requirements, and provide services such as transportation and assembly. Digitalization in the store is essential for managing all of these procedures, correctly coordinating the workforce, and providing precise information about the products. We provide digital tools and platforms to our staff so that they can better serve our consumers.
“Our R&D center is home to many investigations ranging from artificial intelligence to robots.”
In 2018, we applied to the Ministry to become an R&D center, and in November, we acquired our R&D license. We were one of the first retail organizations to have our own R&D center. Companies that understand and use technology well, as well as design new technologies/products, will take their position in the world of the future and make a difference as a natural result of digitalization at an ever-increasing rate. As Koçtaş, we intend to maintain our position as a major center of attraction in the industry, not by following technologies but by developing new generation retail technologies, with our strength stemming from our R&D center and rising investments in human resources. Our R&D department is now conducting research in fields such as artificial intelligence, retail-specific image processing, forecasting models, and robots.
