LPP on the tech offensive

The company is following a strategy of investing in fashion tech and brick-and-mortar stores, as well as entering foreign markets.

Apps, programs and systems

The company has developed a stock management system to forecast demand for goods in specific locations. The program also gives information on the pattern, size and colour of a product as well as the number of items in stock. By using big data analysis, LPP can match the supply of goods to its stores with their needs and move items around within the chain.

The company has also introduced its store vision mobile app to help with the management of its stores. Employees can scan bar codes with their smartphones to check the availability of a size in a given location or across a number of stores. They can also order clothes for their customers online, check the contents of deliveries as well as rank the best-selling products, which allows the right clothing to be sent to the most appropriate stores.

RFID tags are to appear in LPP stores by the beginning of 2019 with the company to invest PLN 60 mln a year in such labelling. The electronic tags can hold all the information about a product, which allows its path to be traced from the sewing rooms and distribution centres, to the stores and its eventual purchase. This gives the company a wealth of data – such as which clothes are being tried on and bought and which are not and at what stages customers might be making the decision not to make a purchase. RFID will also help further digitalise sales as well as provide suggestions in the fitting rooms, using automated checkouts, screens displaying adverts tailored to individual customers and better integration of sales channels as part of the omnichannel

approach. LPP intends to personalise what it sells and is working on making the entire chain’s operations more efficient. “The world of fashion must learn to innovate and apply technology throughout the supply chain because it is a great tool for getting to know what customers want and for offering them the right products. Using such systems, the sales strategy becomes more effective at the same time,” believes Jacek Kujawa, the vice-president for logistics and IT at LPP.

An investment of millions

The company currently employs 350 programmers and IT specialists – and the number is set to grow. “The goal we will be pursuing over the next three years will be development, development and once again development. We have the ambitions to chase down the biggest players and we know how to do it. Retail is undergoing a real revolution these days. By applying fashion tech and investing in research, we aim to be one of the winners in this revolution. We are going to, for example, steadily increase our internet sales and its share in our revenue should reach 20 pct within three years. Importantly, we want a steadily increasing revenue that is built on our identity and key values. The Polish economy is going to benefit from the development of LPP. Our three-year plan should, for example, create. 4,000 new jobs and generate PLN 2.2 bln in domestic investment. This money is going to stay in Poland,” says Marek Piechocki, the CEO of LPP. The company currently uses 450 different IT systems. Its annual investment in technology comes to PLN 60 mln. By 2020 the company will have invested PLN 500 mln in the development of logistics projects for both e-commerce and traditional sales. Modern technology should help the company increase its annual revenue to PLN 10.5 bln by 2021, with online sales accounting for a significantly increased revenue share from the 8 pct at present to 20 pct in 2021. The company is also not neglecting its brick and mortar sales and plans to have invested PLN 3.5 bln in the further development of the chain by 2025. A large proportion of the growth will result from the Polish clothing producer’s further expansion abroad. This year LPP will open stores in Israel, Kazakhstan and Slovenia. It is also planning openings for 2019 in Finland and Bosnia-Herzegovina. The company intends to enter at least one new market every year. Also, the company’s newest Reserved stores already use RFID tags and other technological innovations such as heat maps that allow goods to be efficiently distributed along a customer's shopping path and that can ascertain their age and gender as well as the duration of their stay.

Always together

Marek Piechocki, the co-founder and co-owner of LPP, has also recently established the Semper Simul (Always Together) foundation to maintain the Piechocki family's ownership of LPP. Its members will have 31.5 pct of the votes and 319,000 shares in the group.