By the early 2010s, global ecommerce sales had already grown to a significant size. Front-running disruptors such as Amazon and Zalando were aggressively tearing down consumer adoption barriers, for example by offering free shipping and free returns, and it was becoming increasingly apparent to incumbent retailers that the shift to online could no longer be ignored.
Daring incumbents went head-to-head with the disruptors, but found themselves facing a number of disadvantages. Firstly, they were met by a constant uphill battle when trying to rebalance focus, resources and budget between a large and still more profitable store channel, and a small but rapidly growing online channel. This was even more problematic for franchise models, where franchisees regarded ecommerce as an existential threat, and tried everything within their power to thwart it. Some HQs and franchisees ended up facing each other in court.
Secondly, incumbents were often locked into legacy IT systems that were clunky and expensive, and hampered experimentation. And thirdly, their organizational set-up was often maladaptive for digital, with functions split across silos that had limited in-house digital capabilities or expertise (e.g. digital marketing would be put under marketing, e-category management under category management, etc.). Websites were typically managed by agencies, and digital teams were often led by traditional retail specialists, who thought their ticket to success was simply to copy and paste the offline offering onto a homepage. Not so.
To compete in the new omnichannel space, retailers would have to learn to rethink their offerings along every point in their customer journeys, and transform their business models and organizations accordingly.
We have worked with many of the world’s leading retailers on their transformations into successful omnichannel businesses. We have convinced senior executives to adopt a disruptor’s mentality – which means thinking beyond existing assets and KPIs, and fundamentally reworking the customer experience. We have also, together with our clients, built and scaled new ecommerce propositions that have enabled them to compete in today’s market. Along the way we have brought in digital capabilities, helped hire digital talent, fulfilled much-needed roles ad interim, coached teams on the job, and supported the creation of in-company academies. And we’ve learned some important lessons about what works and what doesn’t.
Success requires a vision plus the drive to reshape conditions and allow digital to flourish within a traditional retail environment. This isn’t always easy: for example, high-end Dutch department store De Bijenkorf made the tough decision to close several outlets and stop direct mailing in order to shift resources to their online customer proposition. But because they did this early, there were able to do it according to their plan, and not to the tune of plummeting sales.
It’s also critical that the digital transformation starts at the core customer-facing processes rather than being conceived of as a disconnected business unit. And when digital is still small, inefficiencies and low margins need to be accepted in order to test, learn, and grow. Once digital has become a significant revenue driver, it can be fully integrated into daily business targets and the organization as a whole. Teams become category-focused and cross-functional, consisting of both digital and non-digital roles, allowing faster decision making and a truly omnichannel approach.
For Action, we developed an omnichannel vision and strategy that enables the company to connect better with their digitizing customers. We are currently working together on the strategic roll out to Action’s 1,500+ stores across seven countries.
Over the decade we have helped Ahold Delhaize strengthen the online presence of their labels in multiple ways. For example, we prioritized ecommerce focus areas for Albert Heijn and enabled them to launch their premium delivery service within three months. In addition, we developed the new digital proposition for Etos, and co-designed AH to go’s (mobile) consumer journey.