News from the German retail market week 31

News from the German retail market week 31.

  • German retail market – Turn over week 31 +1% vs LY. 
  • Openings & Business
    – Mango
    opening in Frankfurt, this is their biggest store in Europe.
    – Birkenstock  the German shoe manufacturer is stepping into the international licensing business through a partnership with brand consultancy trademark one AG.
  • Retail economics
    – The Metro group
    who owns METRO Cash & Carry, Media Markt & Saturn, Real hypermarkets and Galleria Kaufhof showed a really weak third quarter.
    – Adidas will bring down their forecast for the present fiscal year. They now believe they will earn around€200 million less then the first forecast.

Turn over week 31 = + 1% vs. LY.

My thoughts on that: Finally, after seven weeks in a row with a minus vs. LY , last week showed a plus for many of the retailers in Germany. 

Source:(http://bit.ly/1xXGpi9)

Retail Economics

Metro Group the company showed a positive result after the first 9 month but the third quarter brought their result down from €119 million to around €52 million.

Adidas will bring down their forecast for the present fiscal year. They now believe they will earn €200 million less then the first forecast.

Source:(http://bit.ly/1tN2DFW ) (http://bit.ly/1zN8rj9)

My thoughts on that: The article doesn’t tell in detail the reason for Metro group or which business unit had the worst performance. I guess that kaufhof is not at the top of their game. As I have been writing before I believe that a lot of the larger department store chains have problems to keep up with the international expansion and the online and Omni-channel solutions that are growing in the market. Not sure how large their e-commerce business is compare to their physical sales. Although, running those huge department stores can’t be cheap.

Adidas, I am a bit surprised that Adidas are lowering their expectations and forecast. I believe that the World Cup wasn’t as successful as expected or that their “normal” business with clothing and shoes hasn’t performed as expected. Although not sure which market is performing.

Openings & Business

The Spanish retailer MANGO opened up the biggest store in Europe. The location is direct on Zeil in Frankfurt city. The former occupant was the Brand Pohland, the location is around 3000 sq. sales area and in 5 different floors. The brand will show all their collection from DOB, HAKA, KOB, Accessories, Sport, underwear and large sizes for women.

Birkenstock’s strategy is to conquer new strategic business segments, market and target groups. The brand is synonymous with health and convenient and comfort shoes and this is the area where they are going to expand and focus their product offers. Their product lines expansion lies in: living and sleeping, work environment, feet plus running and lifestyle.

Source:( http://bit.ly/1AOujfv) (http://bit.ly/1orIwcy)

My thoughts on that: A great A- location in Frankfurt. I think this will fit their target customer pretty well. The rent is of course in the top league, but I think the footfall and the buying potential are really good. I have to say that the concept Mango looks better and better, their stores looks more structured and attractive and it will be interesting to follow their performance.

Birkenstock, the brand was chosen the “Brand of year” in the US 2013 and is already commercialized in more then 80 countries around the Globe. With that kind of brand awareness and their “ new” product mix I believe they have some really good condition to grow even more on an international level.

News from the German retail market week 30

News from the German retail market week 30.

  • German retail market – Turn over week 30 -5%vs LY. 
  • CPD – Collection Première Düsseldorf – International Fashion Fair in Düsseldorf takes place from 26th to 28th of July.
  • The German retail brand Esprit partners up with PETA.

Turn over week 30 = -5% vs. LY.

My thoughts on that: The second week in row shows the German retail minus vs. LY. It feels like it is less visitors or at least fewer customer with shopping bags on the streets. I think one reason is that the e-commerce is still growing and taking more and more from the physical sales. The brands that can’t follow the development on multi-channel solutions will loose to the benefits from the e-commerce market.     

Source:(http://bit.ly/1oCb0AY)

CPD – Collection Première Düsseldorf – International Fashion Fair in Düsseldorf takes place from 26th to 28th of July.

The Düsseldorf fashion fair is busy and running its last day today. Many of the brands and exhibitors do miss the German customer, the reason is that many already made their orders at the Berlin fashion fair two weeks ago or in their central buying office. The fair gets a lot of visitors from abroad and eastern Europe as Russia.

Source:http://bit.ly/1mUfHkl)

My thoughts on that: Düsseldorf is a well-reputed fashion city for whole sellers and retailers. A lot of brands and fashion agencies have their head office or showroom located in the city or nearby. The geographical location is great, in the middle of Europe and close to Amsterdam, where also a loot of large and significant international brands have their head offices for the European market. Since the German market is very much divided in regions makes it sense for the international companies to participate in different fairs around Germany. Although, if you are looking for volume I think it is better to be focus on the central buying department and the earlier fairs. I am not the biggest fan of these kinds of fairs since I think and hope that the platform and fashion forum will develop more digitally. I understand the visual aspect and touching part of the buying process but this could be demonstrated more digitally and in a more personal forum. I will explain more in detail and the advantages in an upcoming blog.

The German retail brand Esprit partners up with PETA.

Esprit has partnered up with the animal rights organization People for Ethical Treatment of Animals (PETA) to introduce PETA approved vegan hangtags to mark Esprit’s vegan shoe styles.

Vegan models are available in Europe and on their e-shop. The collection consists of PETA approved vegan trainers, made from eco-friendly faux leather and canvas.

My thoughts on that: I think it is a good action and cause from Esprit. In my opinion the brand has been a bit plain so this is definitely something that will an effect on their brand awareness. The purpose is also good due to the ecological trend in Germany I think they will reach out to a broader customer group

Source:( http://bit.ly/UwO61P)

 

News from the German retail market week 25.

News from the German retail market week 25.

  • German retail market – Turn over week 25 -14%vs LY.
  • Online returns: German online companies working to push down their return rates.
  • New brand Reserved from east Europe and Poland is entering the German market.

Turn over week 25 = -14% vs. LY.

My thoughts on that: One less trading day on Monday in some parts of Germany affected the trade. The stores are displayed with heavy sales signs, but this didn’t help the trade. Since almost all summer items are on sales, the stores are soon starting to communicate a stronger pre-fall message. Important is to get a smooth transition from one season to another so you margins doesn’t fall too much. 

Source:(http://bit.ly/T3ghEv)

Online returns: German online companies working to push down their return rates.

The online boom in Germany is not surprisingly showing its side-affects through high return rates. A study with the 30 largest online companies done by the consulting company BearingPoint shows that the toughest challenges lays within return rates and inventory management. The study also shows that almost 2/3 of the asked companies prioritize and value core competences as: logistic solution including receiving goods and quality check, stock holding, consignment and picking meaning managing distribution, returns and sending goods.

Most of the companies also prefer to run this part of the supply chain within their own organisation and without external services. The advantages are better control over the product flow process and also more control over internal product and customer data information. This leads to lower product damages and lower costs.

One partner, responsible for the study, Matthias Loebich from BearingPoint points out that companies within the textile and clothing industry should put more focus on finding better technical solutions and to be more responsive to the demand. With the right algorithm you could optimize your demand forecast and stock levels. He also sees opportunities in improving the package and product descriptions to lower the return costs.

The study also shows that 69% of the companies who were asked admitted that their sites could be user-friendlier. For example, the shoe industry could improve their product presentation and visuals by implementing 3D-measurement technic to improve the fit and accuracy of the purchase. This will also give the company opportunities to collect import customer data.

My thoughts on that: I think this study is very interesting because I assume it is not just a challenge for the German companies but on an international level. The focus should not only be on the supply chain management (SCM) solutions but also on the site and product presentation which they are mentioning in the study, according to a simple cause and effect analysis.  Many of the companies that participated in the study are multichannel companies, which also means they have a choice of either work together with both sales channels or separate the online process within their inventory  management. 

One SCM driver that are mentioned here are the inventory management including product planning calculation, which goods are responsive and which is not and what safety stock level is right for us? A decent product categorization with: volume-based products, season goods and trend teasers could also make it easier to decide what amount to by on stock and on demand. What calculation tools you should use to optimize the demand calculation as was mentioned in the study could of course differ. It is depending on your complexity of product mix, % of change in products or services, storage location costs, supply chain locations, planning cycle and seasonal or fluctuation in demands.

The other driver that are mentioned is information system and I would also like to push for an intelligent information system that complements your ERP (Enterprise Resource Planning) and SCM system. The technique RFID (Radio Frequency Identification) is for many companies expensive to implement but gives you a very good stock update and a transparency in tracking goods (RFID 24-7). Which helps your inventory management planning.

As mentioned in the study, the product presentation and the user-friendliness are not to underestimate. The earlier you could prevent the customer from choosing the wrong size or product the better it is. Also think which options you are showing and that the product information will help the customer to choose the right items.

Source:(http://bit.ly/1ljCfij)

New brand Reserved from east Europe and Poland is entering the German market.

The company LPP SA is a Polish fast fashion retail company – selling clothes and accessories under 5 brands: RESERVED, CROPP, HOUSE, MOHITO, SINSAY. They will enter the German market with an online shop on the 1 st of July.

My thoughts on that: The competition is getting harder and especially in this segment, lower price segment, which offers 1-2 new deliveries per week to a relatively low price. They will challenge brands like H&M, New Look ,ZARA and Primark. If they also are going offline (physical store) I guess their first store will be in a shopping centre in one of the 10 largest cities.

Source: (http://bit.ly/UAkNM5)

Infographic: Supply Chain Management

 

Trends within supply chain

Trends within supply chain

News from the German retail market week 18.

German retail market week 18

  • German retail market: Turn over week 18 minus 5%vs LY.
  • Openings:  Danish womenswear brand Only is opening up a new Flagship store in Stuttgart on May 22 and the Italian sportswear brand Woolrich is opening a store in Sylt.
  • Figures:  Esprit showed a downfall in sales revenue vs. LY for the third quarter in 2013/14, minus -12,7 % after adjusted currency exchange. 
  • E & M – Commerce: Otto Group has a new start-up called Collins where they are reaching out to the new digital generation.

Turn over week 18 = -5% vs. LY.

My thoughts on that: not very surprised since it was a bank holiday on Thursday, first of May and many people took probably Friday off.

Source:( http://bit.ly/1mve8PT)

Openings:  Danish womenswear brand Only is opening a new Flagship in Stuttgart on May 22.  The Italian sportswear Woolrich is opening a store in Sylt.

With around 700 sqm this will be their biggest store in Germany. Only belongs to the Denmark –based fashion group Bestseller. They have planned an opening offer, 50 first clients will get a 50% discount on their entire purchase. In addition all customers will receive a 25% discount on all products the first three opening days.

Woolrich opens up a store in this exotic little island located in northern Germany. The store will be around 100-sqm and is operated by KUH Arctic GmbH, sister-company of the distributing agency Komet und Helden GmbH, owned by Mr Henrik Soller and Mr Florian Ranft.

Source:( http://bit.ly/St7Fb3) (http://bit.ly/1iQeIVW)

My thoughts on that:  Interesting opening from Bestsellers, this is a brand in the lower middle-price segment. The brand is represented with locations in approximately 57 different cities around Germany. The cities are medium large and I have mostly seen them on so called B-locations. I assume they will step it up a bit by locating their new Flagship in Stuttgart at an A-location spot. This is the second store in Germany for Woolrich and they are also planning to open up a flagship in Hamburg in July. I am a fan of their jackets, although their price level is sometimes a bit too high for my wallet. Up to now I have been valued it as good investments since the quality is really good. Sylt is an interesting place to open up in since it has a lot of wealthy people and the population is just around 21,000 and tend to be seasonal.

Figures: Esprit showed a downfall in sales revenue vs. LY for the 3 quarter in 2013/14, minus -9,9%.

The main reason for the downfall is the poor business in Asia and the closing of some own stores.

– Own-retail showed -5,6 % worldwide after adjusting for the closing stores.

– Europe is still a solid market with -1% vs. LY, while Asia-Pacific area showed -18,2%.

– Wholesale, had a downfall of 14,3%, Asia took most of the downfall with – 58,1%. The main reason for Asia was less shopping space/location and clearing old stock. Europe sank with -9,1% also with less shopping space as an action.

Source: (http://bit.ly/1iixoYo)

My thoughts on that: I like their latest changes they have done with their store concept. Not sure why it isn’t working in Asia, maybe due to distributors or market strategy? They have been struggling also in Sweden awhile but still going strong in Germany. I think they need to work more on their market positioning. Not sure what the concept Esprit tells you other then that it is a casual middle price segment brand?

E & M –Commerce – Otto Group has a new start-up called Collins where they are reaching out to the new digital generation.

Interesting idea where they are using an Internet platform called aboutyou.de which also external users could create apps for the purpose of reaching out to the digital generation. The end-users could log in and create their own profile, similar to a Social Media Community and this will also generate a useful buying pattern for the brands. The end-users could also use the platform and integrated apps to get styling tips from Hollywood or custom made for their needs, basically what is “HOT and IN” right now.

Source: (http://bit.ly/1q76Jrq)

News from the German retail market week 17.

German retail market week 17

  • German retail market – Turn over week 17 minus 8%vs LY.
  • Karstadt-Manager, Eva-Lotta Sjöstedt – makes her moves towards better profitability.
  • The Nürnberg based department store Wöhrl showed some positive figures the first half of 2013/14.
  • New study shows that every third start-up in Berlin within the so-called “future field industries” are successful.

Turn over week 17= -8% vs. LY.

My thoughts on that: I have seen less shopping bags on the streets of Germany last week. I do think that the people are cutting back on the shopping due to travelling and vacation during and after Easter break.

Source:( http://bit.ly/1klYodL)

Karstadt-Manager, Eva-Lotta Sjöstedt – makes her moves towards better profitability.

They are looking at short-term savings, up to €30-40 million. The most savings will be made by lowering the discount and price reduction rates. Other changes will be done in the supply of private goods area where they are expecting at growth in private own brand sales.

Source:( http://bit.ly/1lpGhoh)

My thoughts on that:  Classical actions from Eva-Lotta, nevertheless good ones. I definitely agree that a business in Karstads size needs to have an organic high profitability growth, meaning improving their contribution margin and mark-up rate.  If they are successful in increasing the margin for private own brands and the same time increase the turn over share then this will help them a lot.

Some challenges: If the share of private brands increases in expense of the external share then this could be challenging for their brand awareness. Although, not sure which target customers they are reaching out for. I am not that impressed with the private labels they have today but maybe I am in the wrong target group.

The Nürnberg based department store Wöhrl showed some positive figures the first half of 2013/14.

Figures from the first half of 2013/14: plus 4,8% total revenue to €183 million. EBIT plus 26%, to €6,6 million, sales revenue increased from €145,8 million to €149 million.

Actions: Marketing activities across the market for their 80-years company anniversary, operational as strategic actions. These marketing actions, fashion-shows and opening Sunday’s actions will hopefully also in the future counter-act and increase their footfall. They are also working on connecting and integrating their physical sale with their online sales, Omni-channel focus. Their subsidiary SinnLeffers who they bought a while ago is being more integrating their business. E.g. their both online shops is going to be connected and integrated.

 Source: (http://bit.ly/1ke4dsa)

My thoughts on that: I like the actions they are making towards a more Omni-channel environment where they could use the synergies from online and offline shopping. I do also think they are getting synergies from integrating SinnLeffers operations in their business, both in the supply chain operations and later on also the shared-service operations.

New study shows that every third start-up in the so-called “future field industries” coming from Berlin area are successful.

The Investment bank Berlin (IBB), (Investitionsbank Berlin (IBB)), has made the study. IBB together with Brandenburger Cabinet defined the future industries from a technological, economic and scientific perspective to find out from what industries the high-growth companies will come from.

The future growing industries are within the range from healthcare industry with Energy technicalities and mobility to the information- and communication technologies in the area of Optic.  It is within these industries that many high-growth companies are born. In 2012 were 8.900 companies registered and 2600 came from the innovative five future industries. Until 2020 will a total of 17.000 more companies be registered, from this amount will 9000 companies come from the future innovative industries. The revenue per employee within the innovative companies is 45% higher then the German average. In Berlin registered 79 start-ups per 10.000 within the innovative and creative industries, which makes Berlin the most start-up intensive city followed by Munich (52), Frankfurt (38), Hamburg (35), Cologne (32), the German average is around 49.  There are although some challenges to the growth of high-growth companies in Berlin, the city is lacking of risk-capitalist and the lack of day-care centers. This could mean that the companies will only survive the first year in Berlin and then move to a smaller city.

 Source: (http://bit.ly/QQQEXc)

 

 

 

 

News from the German retail market week 16.

German retail market week 16

  • German retail market – Turn over week 16 minus 17% vs LY.
  • New study on Mobil-commerce in Germany and Europe- the growth in sales from Tablets and Mobile phones are expecting to double during 2014, info graphic included.
M-commerce Germany & Europe

M-commerce Germany & Europe

Turn over week 16= -17% vs. LY.

My thoughts on that: Not surprisingly since it was one less day of trade this year compare to LY. Also LY had a plus 19% compare to LY. Many retailers are have started their mid-season sales in the middle-price and low-price segment. I don’t think this week is going to bring a high plus since Monday was no trading day.

Source:( http://bit.ly/1f0iNpZ)

The growth in sales from Tablets and Mobile phones are expecting to more then double during 2014.

– This is an international study from the internet-company Deals.com. The expectation in figures from Germany: expecting a turn over of €6.6 billion during 2014, €4.1 billion from Smartphones and €2.5 billion from Tablets. This means a 16,8% share of the total online-market in Germany. Other interesting facts from Germany, from total online trade last year, €34.4 billion were €3.1 billion were purchased from a Mobile gadget (9,1%), €2.1 billion from Smartphones and €1.0 billion from Tablets.

– There are 37 million smartphone-contracts in Germany, over 45% is owned by adults. Every forth who owns a smartphone has visited an online-shop.

– The total online business is expecting a 22 % growth 2014 and for the Mobile-business an astonishing 112% growth.

– The German Internet user, 86% are using Internet over a laptop and 10% are surfing on their smartphones and 4% on their tablets.

– The British people, over 35% are using Internet over their mobile gadgets. It is a good reason for them to be number 1 in the Mobile-commerce in Europe, consuming around €5.8 billion in 2013.

– Spain, Italy, Netherland, Sweden and Poland consumed around half a billion each.

– The whole European Mobile-commerce is expecting a growth of 13,1% in 2014, to reach €23.4 billion. The leading market will be Great Britain with an amount of €9.4 billion or 40% market share.

Source:( http://bit.ly/1mv2ykp)

My thoughts on that: Really interesting figures for both Germany and Europe. Also interesting to see how much of this will be added value sales to the physical sales and not taking shares from it. How will the physical stores avoid acting as an advisory service for the online sales? Many retailers are discussing this now and trying out different types of activities. A thought could be to make the purchases more digital and mobile in the physical stores, if the store is considered as a business unit and the BU is getting its allocated share from the online purchase then this could be a start to reach a solution to the challenge. Another point on the growth in Mobile-commerce, it will be interesting to see how the mobile payment solution are used and developed.   

 

News from the German Retail Market week 14.

German retail market week 14

  • German retail market – Zara and the German trade union Ver.di have agreed on a new collective agreement, the agreement will effect and include around 4000 employees working in stores.
  • Turn over week 14 plus 17% vs. LY, a solid growth although this week had one more trade day then LY. The trade from LY was also down -8%. vs. the year before.

  • The Mobile payment company PayPal will try out Beacon on the German market – In the US, PayPal is trying out the Bluetooth Low Energy Technic in over 10.000 stand-alone locations. They will also try out the technic in Germany as a pilot in the next coming months.
  • & Other Stories opens up in Cologne – They are continuing their expansion in Germany with opening a new stand alone store in Fall at Ehrenstraße 43 in Cologne.
  • A German online site, Wirtschaftswoche are listing companies in Germany who they predict are going to loose a lot of business to the online market– The list shows companies that are on the red list and in a real danger to loose business to the Online market.

 

German retail market – Zara and the German trade union Ver.di have agreed on a new collective agreement, the agreement will effect and include around 4000 employees working in stores.  

My thoughts on that: It will affect their P&L in the short run but I do think they will get more quality within their staff organization. Hiring staff for stand-alone stores seems difficult almost everywhere on the retail-map, except for a few exceptions. I have experience from Scandinavia and Germany and it differs from status, working mentality to leadership culture. It is a subject in itself on how to find the right team and I could give some good advices if you are interested. On the Zara subject I think it is interesting that a huge International brand as Zara is doing this. Although, with their size and potential publicity it is almost necessary for them to act in a good behaviour to avoid to end up with a reputation like Amazon and a few more. The agreement gives the employees additional payment on Sundays, although in Germany you are only trading on 4-5 Sundays per year. The conditions regarding termination and giving notice seems also to have improved for the employees.   

Source:(http://tiny.cc/bdeydx)

Turn over week 14 plus 17% vs. LY, a solid growth although this week had one more trade day then LY. The trade from LY was also down -8%. vs. the year before.

Source:(http://tiny.cc/0feydx)

PayPal will try out Beacon on the German market – In the US; PayPal is trying out the Bluetooth Low Energy Technic in over 10.000 stand-alone locations. They will also try out the technic on the German as a pilot in the next coming months.  

Source:(http://tiny.cc/aieydx)

My thoughts on that: Arnulf Keese the German CEO for PayPal is giving his thoughts in an interview with the German magazine Der Handel. The interview is covering the subject on where and how mobile payments are being used today and in the future. The payment setup is already on the German market and could be used for example in the grocery chain Rewe where their competitor Yapital already has sold their services. You could also use PayPal’s app and services there, although you have to consider the transaction fees. PayPal have a setup and technique where distributors and retailers could use their own app or integrate it to your own, like the app Uber has done. This is an interesting development and the core benefit; to avoid standing in line in contradiction to safety is something that the German customers need to understand.

& Other Stories opens up in Cologne – They are continuing their expansion in Germany with a new stand-alone store in fall at Ehrenstraße 43 in Cologne.

Source:(http://tiny.cc/kneydx)

My thoughts on that: This is a really interesting concept that makes something more out of a traditional store. They are very close to the living room and closet experience and integrating the shopping pattern that a lot of women have. In finding a great location they are of course benefitting from the impressive work and position that H&M has put them self on the German market. I have been talking to some real estate companies here in Germany due to openings and not everyone loves them. As much as everyone wants them due to footfall drivers they also set their demands too high and usually get what they want in their agreement, at least in most cases. Nevertheless, they have not reach this position over-night but have had many years of struggling before they finally reached their position. Cologne is a very interesting city with a more younger and casual street-wear feeling then for example Düsseldorf. This is a town with a lot of tourists and a solid shopping culture, so this is a very interesting choice of H&M.

A German online site; Wirtschaftswoche is listing companies in Germany who they are predicting will loose a lot of business to the online market.

Source: (http://tiny.cc/7peydx)

My thoughts on that: This is a list that is not that serious as it sounds. There are some really huge companies on the list, for example, P&C, Karstadt and Media Markt. Although, I think this is a good wakening for some of the brands on the list, but the bigger players are already working on their business model and Multi-Channel solutions and will find solutions to combine offline (physical sales) and the Online-sales to benefit the overall result for the company. The question is just how much the will invest and how their Omni-Channel strategy is looking? Many of these companies also have an older clientele and customer base that are still not adapting the Online-sales to the fullest. Although, these customer are getting older and the brands need to be prepared for the younger customer and their ”newer” shopping preferences and behaviour.  

The development of the retail store.

A Mind map over the development of the retail store: from an Omni-channel, Supply Chain Management and Business Model perspective.

What function will a physical store have in the near future and how should companies consider this in their expansion strategy?

 A short summary on my thoughts: we see that more and more brands and companies are implementing Omni-channel tactics within their expansion strategy. I think that the attributes and the function of a physical store could change to fulfill the needs of retail and whole sales business. This means it could both work as a showroom, stock- and warehouse Hub for your e-commerce solutions and a physical sales location for end-consumer. The challenges of this set up are within the integration of your business model and supply chain management. In regards to this, I think the expansion strategy and weighting of the ABC-locations and online investments are going to change or in some business this is already happening.

Mindmap-Johan Blixt

Mindmap-Johan Blixt

 

News from the German retail market week 11.

German retail market week 11

  • Link-exchanges, SEO – alert, just read that Google takes action towards a German link network and a German agency network who has violated their guidelines according Google.
  • John Lewis presents its retail report for 2013.
  • Hugo Boss shows some figures and goals. Owned retail is going stronger.
  • Retail company, Uniqlo starts collaboration with Pharell Williams and they have decided on the opening date for their first flagship store in Berlin, Germany.

Link-exchanges – tool for e-commerce 

Here is a short explanation about the purpose and function of link exchanges. It is used in a SEO perspective and could give you a better ranking and position on a search engine site. Its definition could be described as an “unnatural link”. If you decide not only to aim for a high-ranking position on the search engines but also strive that the visitor will benefit from your link in a good position then you could benefit more from link exchanges. This tactic is growing more and more in the online-business. What has happened now is that Google are saying that a German link network called efamous and a German agency network has violated their guidelines concerning search engine behaviour.

Source: (http://bit.ly/1nyOU3j)

My thoughts on this: Great tool if its done in the right way. I always recommend following company guidelines or rules and especially if it means that you are breaking the law by not doing so. Although, another perspective is the substance of the guidelines, and in this case I think Google’s concern is about their revenue streams and earnings ability, as in most of these cases. Further, I do believe it is the company’s responsibility to make their guidelines more thorough, business related and not discriminating. Another point from both parts in this matter is if the competition is being limited and unfair due to their behavior, if so I am not encouraging this kind of behaviour.

John Lewis – How we shop, Live and Look is the title of their retail report for 2013

This is a British department store chain so the focus is of course mostly on the customer behaviour in UK. Some highlights from the report: Fashion, Ray-Ban sunglasses sales were up 189% year-on-year for 2013. Product group Shorts saw a rise in sales even through the winter periods. Sales of satin gloves rose by 109%.

Men’s fashion trends in 2013, formal wear by traditional British brands like Harris Tweed saw a rise in sales. Aqua di Parma Colonia was their best-selling men’s fragrance in 2013, and penny collar shirts were a success, John Lewis fifteen-fold their range. Looking at 2014, John Lewis forecasts that the Omni-channel shopping experience will continue to grow. Women’s wear will be characterized by monochrome and sports lux, as well as cashmere and leather for gifting. Menswear will also have monochrome popularity, emphasis on Provence and archive inspiration. The report also predicts an increasing interest in accessories to make a style statement.

Source: (http://bit.ly/1kXNvBw)

My thoughts on this: this report has its focus on the British market but I still thought it could bring some interest to my theme. The trends from last year and the prediction on this year will of course depend on the correlation between your local market and the British market. I do think it is very interesting that they believe in the opportunities of Omni-channel and how it adds value to your business. This is also something I have covered in previous blogs and I will write more about.

Hugo Boss shows some figures and goals: Owned retail is going stronger.

Here are some figures from last year 2013. Their turn over goal is to reach 3 billion Euros in 2015. They reached 2,43 billion Euros, plus 4% before currency effects. EBITDA landed on 7% and profit 333 million Euros.

Interesting is that their own retail contributed to most of their increase and growth in 2013. They have 1010 self-owned POS and they reached 1,31 billion Euros in turnover. A turnover increase with 14% before currency effects, LFL was the revenue increase 2 %. They opened up 170 new stores in 2013. The distribution channel that didn’t go so well was the whole sale with a minus of 7% to 1,1 billion Euros in turnover. They are saying that this was due to a harder market environment and the transformation and acquisition from partner-locations to owned-buy. From a region perspective, Europe had the best growth in sales with UK and France, Europe did plus 5%, 1,46 billion Euros, US plus 2% 570 million Euros, Asia minus 2% 347 million Euros.

Source: (http://bit.ly/1lIF6z4)

My thoughts on this: This is a brand that I think is very interesting, due to its size and strong Brand Awareness. The expectations is that own-retail will grow even more and they will open up around 50 new locations, although not sure about the exact figure. Unfortunately I didn’t I have the access to their online figures and the expectation and work with Omni-channel tactics. I will search for this information elsewhere or if you have it, please send it to me. It doesn’t surprise me that they are so strong in owned-retail since their brand and concept looks and presents itself much better in a solar store location. Their customer isn’t the trendiest or funkiest ones but more traditional and due to their behaviour and preferences and I think they perform better in a solar store environment. There are of course also other reasons to this but this is something I will develop and communicate in an up-coming blog.

Uniqlo starts collaboration with Pharell Williams and opens up their first flagship store in Berlin

Another cool brand, Uniqlo starts collaboration with Pharell Williams and opens up a store in Berlin. He is featuring a Spring/summer 14 collection called “i am OTHER”.

The collection will include T-shirts and caps for Men and Women and will be available in mid April in 14 countries and regions around the world.

Uniqlo’s first German Flagship store will open on April 11th in Berlin, Tauentzienstraße 7. 

Source:(http://bit.ly/1fvXh5J)

Omni channel solutions within retail.

How could Omni channel lead to increased sales and better profitability?

I know that Omni-channel is not something new and that it has been in the business for a couple of years. I was first introduced to it when I worked for a UK fashion-retailer a couple of years ago. I wasn’t directly involved in the technical setup of it but I realized pretty quickly how it works and what potential it has if you do it right. I think it is interesting to see how brands are using it today and how they are dealing with the challenges of implementing Omni-channel into their organization. There are already a lot of articles and blogs out there today about on the subject with different views or significance and if you don’t find them or my thoughts answering your questions or queries I could recommend you some alternatives. Nevertheless, here are my thoughts on the subject but first a definition on Omni-Channel from the blogger/author David Sealey.

“Omni comes from the Latin for all or every. Channel refers to the method in which customers interact with an organization. Literally it is “every-channel”.

“Omni channel is the mix of all physical and digital channels to create an innovative and unified customer experience. Transacting through these channels is a hygiene factor. If all store staff do is scan products and collect payment then they are adding no value at all. As we’re seeing at the major supermarkets they can be replaced with touchscreen terminals connected to chip and pin devices. The experience is what creates brand equity with customers”.

(www.thesealeys.co.uk)

Challenges

I believe one of the principles of Omni-channel is to be available for your customer and to use your distributions channels to connect and interact with your customer, this requires that the company also has this kind of mind setting when they structure their organization. From my experience some organization are separating offline sales (physical sales) and online sales (e-commerce) in the early allocation phase of a product. This means they are planning their stock and allocation to their retailers, owned store or end-use customer from different departments. The organization is stuck with this setup due to a multi-channel structure were you in some cases separates your sales channels from farm to table. I think it is necessary for companies with this organization to break down their barrier between the two channels within their organization or the customer service will suffer, why you ask? Because the customer doesn’t care if you as an employed are working in the e-commerce department or in the offline department, they always expect the same service whether you work for the e-commerce department or the offline. Another scenario that states my point, a store manager is being asked in the store regarding a stock item the customer just bought online. The store manager or his or hers superior turns to their merchandiser who sits in head office, although she can’t answer the question since it is a e-commerce related business so the person in need must turn to another department. This is of course not optimal for the service level or the workflow in a company and especially when you want to make the organization more available and transparent to their customer.

Other questions or queries that I have read about Omni-channel is related to the transactional phase and how you follow up the sales and turn over in a store with mobile gadgets connected to another stock room then you have in the store?

If the store for example has a tablet in the dressing room where the customers also could purchase from the brands web shop, does it mean that the added sales transaction will be added to the web shop unit and not the store unit? It probably will and especially if the company considers the two units as two separate units and not related to each other. A lot of staff members and store managers have asked me if this means that e-commerce will only benefit from this and in the end make them unemployed. In the short run, I don’t think so but I do think that if the company is still running their business as a multi-channel and not change their mind set to a Omni-setup by not breaking walls between their distribution channels this could be the case. The two distributions channels needs to work together and be synchronized and integrated within the transactional phase to gain more added sales and to be more available to the customer.

Possibilities & Solutions

Not sure if I have answered the question on how the company could justify the financial follow up from the two units (physical store & web shop) in an Omni-channel environment? I think there is a few option on how a company could address this. Although, this is also very dependent on which business system and BIS solution the company has. I am not an expert within the BIS area so I will not go deeper into that area but in general and from a business controlling perspective I would suggest to work with warehouse/stock HUBs that generates allocated sales from the web shop to the physical store. This doesn’t answer all the questions or clear the queries but I think by integrating the units stock system or setup could give the company more options on finding the best solution for their purpose.

We can also take this mind set further, if for example sales from the two units come from the same stock room (in the store location) then this probably means you need a good logistic and carrier setup from that location. Also, by adding more stock to your stock room would probably mean more space for stock and less sales area, which probably to some people sounds not very wise and financially motivating. Although, if you merchandize your sales area more virtually and with more digitally visually gadgets, your sales area doesn’t need to be so large. In the end you will also need less staff on the shop floor and could show the customer more options visually and provide more availability to make the transaction. The supermarket area of the retail business has already implemented this kind of thinking and I could give you some more examples on this. This will of course also require a different financial mind setting; the follow up needs to be more adapted to the transactions and the units P&L more integrated. Also the ROI and the KPI: s you are using to measure the business performance needs to be adjusted to the company’s business features.

More on the subject, future and development within retail will follow.