Ignorance Wasn’t Bliss

If two women have pedicures on Thursday morning in South Beach and three others have ginger and lemongrass oil bath soaks Monday evening in Hong Kong, how many post-treatment relaxation lounges will be required in Barcelona on Friday afternoon?

This may sound like an unusual variation on an old grade school mathematics problem, but it is part of the intensely serious game of business intelligence analysis being played by Bliss Spas, a global network of full service high-end spas operated within the chic W Hotels.

Bliss now has 16 locations around the world, with six more on the drawing board. And based on growing demand for the company’s unique product line and relaxed-but-attentive customer service, expansion shows no signs of abating.

Until relatively recently, Bliss’ forward-looking approach to beauty and fitness was being hampered by an inadequate reporting system. Analyzing real-time sales of products and services was difficult, and optimizing staffing to hold the line on labor costs was equally problematic.

The answer was QlikView, integrated business intelligence software from Radnor, Pa.-based QlikTech that is enabling Bliss to merge data from three ERP systems (POS for spa sales and services, CommercialWare for business-to-consumer operations and Syspro for B2B applications) and push actionable information to decision-makers more quickly.

“As we grew, we didn’t have a problem with our systems in terms of capacity,” says Mohit Govani, Bliss’ director of IT. “But combined reporting for all the spas became very complicated and there were some serious operational inefficiencies.”

Upon joining Bliss in 2007, Govani noticed that when the company president “asked how much body butter we sold last month, it took a day before he got the answer. That’s the time it took to pull information out of the system and to make sure time periods and reporting methods were consistent. Then we had to put everything into spreadsheets and consolidate the data, and by the time the president or CFO got the data it was stale.”

Then, if an executive wanted to know how sales compared with the same period a year earlier, “the entire process started over,” Govani says. “It was hard to find one person in the organization who knew enough about how to immediately access information from all three systems. And without that access you simply can’t make good decisions. It was a very manual process and we needed to leave generating spreadsheets to computers — not people.”

When it came to products — an increasingly important part of spa and online revenues — inadequate access to data resulted in some inventory issues. “We were carrying more than we needed because we didn’t have a consolidated view of our inventory,” Govani says. “It was a very expensive proposition, and being able to look at inventory in a singular way helps us to manage it much better.”

Staffing costs analysis
At that stage, the company wasn’t even thinking about managing personnel. “If a spa had eight massage rooms, we just staffed them with eight people, all the time every day,” Govani says. “There were no analytical tools in place: We had no way to tell if there was a difference in usage of services between a Tuesday and a Saturday, or what the differences were between a normal Friday versus a Friday before a long weekend.”

He estimated that this information gap probably resulted in 30 to 40 percent inefficiency in staffing costs during periods of low traffic, as well as some understaffing at other times.

QlikView, which now enables the spas to predict peak periods, was also quick to implement. “We started to get usable information in a couple of weeks,” Govani says, even though Bliss also elected to perform a good deal of customization, which went on for the first few months.

“It only took that long because we were gaining access to great reporting for the first time,” he says. “We never had to concern ourselves with KPIs [key performance indicators] or how we wanted them measured or displayed because we didn’t have that kind of access before.”

One key element in the customization was QlikView’s ability to read invoice data from all three systems. “We also created an entirely separate report to measure and analyze demand from catalog sales to see which of the pages from our catalog had greater impact,” Govani says. “For example, we can now analyze whether buying behavior changes if a product is placed on page three instead of page six.”

Tracking product trends
Separate documents are now created just for Bliss’ spa business in order to focus on metrics around services and products sold at those locations. “We can also see new product sales trends and downward trends for products that should be eliminated,” Govani says. “We wouldn’t have noticed it as quickly in the past.”

Moreover, customized reports enable managers to look at the business on an operator-by-operator basis. The system also provides quick and easy access to information on top technicians. “Any manager could give you that information anecdotally,” Govani says, “but how does their best compare with the best in Chicago or San Francisco? Who are the best in terms of generating revenue and repeat business? It’s interesting information that we can track and act on.”

Bliss can also track up-sell, which averages 10 percent but “there are some technicians that have a 30 percent up-sell,” Govani says. “The next natural step is to find out how they do it: Then it becomes a training opportunity for the rest of the staff.”