Category "What's New"

Unicorn at full speed. Growth by all means.

“TOGETHER WE GO FAR”peloton1-min

 Unicorn – Extreme Growth

PELOTON, belongs to that selective unicorn company league with an innovative business model in the fitness sector, based exclusively on growth expectations, with no track record of profitability and with a valuation of more than $1 billion, in recent IPO process.

It started in the USA in 2014 selling its first connected premium exercise bike and currently provides almost 1,000 different sessions per month online with the best available instructors.

 

Addictive Satisfaction

It provides a rewarding experience to its half a million subscribers who after paying a minimum of 2,000 euros for their connected bike, pay about 39€ per month to be able to enjoy at home this innovative cocktail of Fitness + Media + Technology.

With 8-13 sessions per month and a low churn ratio of 0.65% per month, they have managed to articulate a healthy “addictive” experience.

Its Direct to Customer model mainly online, also has its own retail limited network (75 stores with a wide range of formats such as the 30-sqm micro store or the 150-200sqm Studio where customers can try and experience the products and fitness sessions.

Explosive Income Growth

Total revenue has quadrupled in the past two years, with a strong investment in marketing/sales (35% on total sales) and an R&D effort of 6% of total sales.

Its growth expectations are based on the international expansion (recently it has begun its activities in Canada, Germany and the UK) and the extension to other product areas such as yoga/mindfulness.

In addition to its core revenue from product sales, it is clearly being supplemented by its monthly subscriptions, which already account for 20% of the total with strong growth over the past two years.sales peloton-minSales Evolution Mix Peloton English-min

 

Retail Strategy and Operations Specialists

MHE >>

 

Strong Losses

The results line reflects heavy losses due to the high cost of acquiring new customers and the main focus on growth at all costs in the hope of achieving a higher volume that balances the current cost structure. There is a big question mark of financial feasibility at midterm horizon.

This financial model is an exclusive privilege as a Unicorn company that does not apply to other conventional companies (which must provide dividends) and that is justified exclusively by their high growth expectations.Peloton Losses-min

 

Digital Transformation

The fitness sector is not being at all oblivious to digital transformation:

  • Digital platforms grouping hundreds of fitness centre of various brands and formats: e.g. Gympass, Andjoy, Fitpal
  • Transformation of the traditional gym business towards specialization/segmentation: e.g. Equinox
  • Brands of connected equipment similar to PELOTON: e.g. SoulCycle, Echelon, Techno Gym …

Try a claass with us Peloton-min

Retail Implications

It is clear that Peloton, disruptive, with its revenue/cost structure and lack of business profitability, to date, can not be applied to the conventional Retail model.

Spite of all this, we can identify a number of elements and features of the new Unicorn businesses that sooner rather than later, will be selectively adopted by Retail and Brands:

  • Direct to the Customer
  • Focus on mix of products and services
  • Use of innovative technology to customize and provide “on demand” the product/customer service
  • Subscription. Recurring income
  • Extreme omnichannel. Online and physical
  • Clear adaptation of physical retail formats based on the different roles they have (e.g. stores from 30 to 200sqm). Limited footprint.
  • Addictive and satisfying experiences in communities

Yoga Peloton-min

 

More info: carlos.dominguez@mheconsumer.com

www.mheconsumer.com

 

Patagonia, is a symbol as an innovative brand and pioneer in the proactive environment protection . With more than 45 years behind it, it is the ultimate exponent of a company that assumes as its authentic mission its own the value of the durable, “Patagonia is in business to save our home planet”.

Impact Environment-patagonia

Far from being a passing fad, Patagonia has dedicated, for more than fifteen years, 1% of its sales to finance and promote initiatives directly aimed at reducing the human impact on the environment.

Through its Patagonia Works entity, it selects, organises and develops all kinds of activities to reduce the impact on the environment with professionalism, rigor and at the same time, proximity and with activism, sometimes not complacent with the established status.

It develops more than 2,500 activities a year with strong involvement of local communities.

 

Outdoor Segment

It is not by chance that the founder of this company specialised in Outdoor is passionate about mountaineering. The same is true of other companies such as Mont Bell (Japan) and Rei (US) where the business’s precursors are in themselves, genuine passionate about free- to- air activity and develop their businesses with an exquisite proactive defence of the environment.store front-patagonia

With strong larger competitors like Columbia, North Face, Patagonia has made progress in revenue and profitability. Its positioning with a price level slightly higher than its two main rivals has been no obstacle to continue to count on the loyalty of its costumers.

It hasss a small network of about 50 own stores, direct ecommerce and maintain the wholesale channel as its main distribution route.PVP medio-ingles-min

 

Amplitud Opciones ingles-min

 

Mhe works for major chains and brands improving retail strategy and operations 

Retail Operations

 

Product Assortment

Each product they incorporate is audited in detail to ensure that it is designed and produced with the least impact and that it fulfils, in a lasting way, the functions to which it is intended.

The progressive use of recycled materials for its products is a reality.

material recliclado ingles-min

 

In addition, Patagonia proactively promotes the arrangement of those garments that for their daily use need a repair so that they continue to be used, either by its original customer or through its “Worn Wear” service by another customer thus giving a second life to the garments.

Repairs are carried out through its Central Specialised Center (Reno), as inside its shops and flying workshops with planned itineraries.

Patagonia WearWorn-patagonia

 

Given the importance of food, Patagonia has introduced a newline of business (Provisions) to offer an environmentally friendly assortment specially designed for use in outdoor activities.

 

Patagonia Provisions Food-patagonia

 

Innovative initiatives for its employees

The working environment for its employees is consistent with the values it pursues and has a number of innovative initiatives that have managed to provide the lowest turnover rates in its USA sector:

  • 100% of women with maternal leave return to work
  • Own facilities and services for the care of younger children
  • Flexibility to enjoy with 21 weekends (three days) a year to be able to develop free-to-air activities with their families
  • 1.5 million km reduction in car journeys by its employees

Transparency and best practices for the outside

Patagonia has a clear policy of transparency and shares its best practices with other companies, including competitors, to the extent that it results in less impact on the environment. Altruism well understood.

Key findings

  • Genuine matters
  • Not always happy with the current situation
  • Innovating always chasing the durable. A certain taste of RETRO
  • A well-understood activism to defend values is not against  profitable commercial business and in fact facilitates a strong bond with your customers.

We need more “Patagonias” in other sectors!

 

 

More info: carlos.dominguez@mheconsumer.com

www.mheconsumer.com

 

Flagship Store in Madrid. Serrano Street

JW Madrid Serrano Brand Retailing Mhe

Since last November, Serrano Street in Madrid has the only European Flagship store of the Johnnie Walker brand. This wasn’t his first attempt. Previously 4 very restricted spaces were tested in different international airports supporting a greater premium character for the brand.
In this new space they are cool to face challenges that are common to most brands:

  • Experience
  • Interactivity
  • Customization
  • Cult of its tradition and legend (200 years)
  • Themed with the new customer context (e.g. Game of Thrones)

store madrid-min (2)Belonging to the Diageo group, JW is one of 200 different brands (including Guinness) that the group manages with more than 13 billion euros of sales across 180 countries. With a strong commitment to marketing (15% of the value of its sales), it has decided to spend 150 million euros for three years to develop a series of physical centers linked to its distilleries thus fostering an interesting customer-facing experience integrated with leisure/tourism.
A network of 12 distilleries in Scotland are the first to be incorporated. The ultimate exponent is the newly approved project for Edinburgh that will incorporate the lessons learned into its first Serrano store.

JW Interior Madrid. Mhe

Brand Retailing Mhe

It’s not just in the physical store grounds that JW is innovating. According to a recent study by Gartner L2 (July 2019), Johnnie Walker is the alcohol brand with the highest degree of innovation in digital initiatives.
Iniciativas digitales Branding retail

Mhe works for major chains and brands improving retail strategy and operations

Retail Strategy

The commitment of the Brands to be present in physical stores has been materialised in the different sectors with unequal success and in a variety of concepts:

  • Traditional flagship shop
  • Maximum exponent of omnichannel/technological experience
  • Ephemeral pop-up units
  • Advanced Showroom
  • Integration with your production sites
  • Implants in third-party environments…

Other brands as diverse as Dyson, Windows, Hershey’s, Hyundai, Kellogs or Samsung are also testing and developing their activity in Brand Retailing with disparate results.

Dyson Store Branding retail Mhe

Tradition and innovation are not incompatible. Johnnie Walker manages to get excited in Serrano Street and at the same time sell competitively on the shelves of the Mercadona supermarket round the corner.
juego de tronos JW Brand Retailing

With the brand connecting and … on the shelves selling !

More info: carlos.dominguez@mheconsumer.com

www.mheconsumer.com

 

Glossier. The new paradigm of cosmetics: From a Blog to the Store

Glossier, the millennial cosmetics brand created in 2014, and which since last March has become a new technological “Unicorn” (a term granted to companies with a valuation of more than one billion euros), has more than 200 employees and with activities in US,  Canada, UK, Ireland, France, Denmark and Sweden.

In 2018, the company’s revenue doubled from the previous year, surpassing $100 million. It has just achieved, in its last round of funding, 100 million from the Private Equity Firm Sequoia Capital.

Glossier_Personal_Apoyo_Venta

Its origin is a blog called  Into the Gloss, whose first articles date back to 2010. The founder and CEO, Emily Weiss, model in her youth and closely linked to the world of fashion, interviewed famous people about her beauty habits. From day one, Lancome was their sponsor. Its beginnings were purely online, and it currently has 3 stores, in New York, Los Angeles and Seattle.

Weiss’s main argument was that beauty companies were not meeting the current needs of women. In 2013, with tens of millions of followers behind her back, Weiss began sketching out what Glossier’s success would be: democratising cosmetics – making women feel good rather than unsure about their appearance (“Real-life beauty products”). First, she found a gap in the market to meet a need. Then she started with a simple product line at really attractive prices, with a basic color gamut, and eliminated unnecessary product in the range. Relying on social media, especially on Instagram, she preached the brand’s goodness and created a legion of loyal followers. Making the shopping experience enjoyable and very easy to share (thanks to its original packaging ).

Afterwards, the path that other e-players previously showed us: pop-ups to generate branding and allow customers to come into contact with their products; make online shopping easier and frictionless; and create a brand around its founder (and not another soulless brand). Recently, Glossier just launched a new brand, Glossier Play, much more extravagant and full of brilliance and color. Until this launch, its assortment consisted of just 40 SKUs, focused on skin care.

Glossier is one of the disruptive brands that is transforming the cosmetics sector, along with Fenty Beauty, the cosmetics brand, and now also fashion, of the singer Rihanna, making traditional retailers rethink their strategies. Department stores and pharmacies have been dedicated to modernizing their beauty departments with a focus on services, technology and agreements with emerging new brands, in an attempt to fight the growing wave of beauty brands that, supported by the “effect influencer”, offer much more interesting experiences for today’s customer.

Mhe works for major chains and brands improving retail strategy and operations

Improved customer experience

Its flagship is located in the SoHo area, NYC. The showcase is nothing more than a translucent vinyl that does not allow you to see the interior. Surprisingly, as soon as you access the store, you will find a kiosk where customers can pick up their orders made through their website.

After going up the stairs (the store is located on the second floor), we come across a fully automated order preparation area, where a crowd of customers are waiting for the products they have just selected in the store, with the help of sales staff. Sales assistants are dressed in pink uniforms similar to the scientist uniforms in a lab, and “equipped” with iPads prepared to serve another client. Service and close contact with the customer is another fundamental aspect of their success. Vendors encourage you to interact with the product and provide you with beauty tips.

The store has areas to test its products and is full of mirrors in which to check the color that we want to take home.glossier. nyc flagship-min

 

At all times, it gives you the feeling that everything pretends to be an Instagram post. You can’t find any limitations when it comes to taking photos inside the store. What’s more, once inside you seem to find yourself in one of the tourist attractions of the city due to the amount of people taking photos and selfies with the decorative elements of the store.

Glossier_Sales_Assistant_Uniform

Glossier_Instagramable_Furniture

 

 

 

 

 

 

 

Cosmetics have become the pioneer and  leading Retail segment, showing the way to other sectors such as Fashion

The new paradigm of cosmetics: From a blog to the store

 

www.mheconsumer.com

 

NYC Flagship. Reinventing your Third Place: Home, work and Starbucks experience

Temple with more than 2,000 square meters

A new temple for Starbucks lovers opened last December in NYC, in the Chelsea Market area, across Google’s offices in the city. They are more than 2,000 meters distributed over three floors with 5 well differentiated areas including an area for cocktails, Italian pastries and sandwiches (Princi), ice cream and of course, 6 different ways to make a coffee (in addition to the espresso).

Starbucks NYC Flagship

  • 280 employees strive to realise a differentiated experience for customers who are willing to pay 7 to 10 euros for their coffee. The price does not seem to be an impediment to continuing to grow this company that with sales of 22 billion euros (same Inditex and Mercadona league) and annual growth of 10% is making Starbucks that “third place” desired by its customers after home and work.
  • With a local design, copper colour dominates the environment. The central axis of the store is a roasting area that prepares more than 500 tons of coffee to be used in some of the 28,000 outlets that Starbucks has. With a high annual x17 inventory turnover, it is indeed the envy of any other retail business.
  • The plan is to have a total of 6 Flagships with similar globally characteristics. They have already also opened in Seattle, Shanghai, Milan, Tokyo and soon in Chicago.estadatisitcas-min

Declination of formats

Few businesses have declined their format in variants as different as they have, from small kiosks implanted in hotels/office blocks to these 2,000-meter theatre stores maintaining a special aroma and atmosphere.

Starbucks NYC

Mhe works for major chains and brands improving retail strategy and operations

Retail Customer Experience Optimisation

Food

Food already accounts for more than 20% of its sales and the alliance, in full execution with Nestlé to distribute its products on supermarket shelves and other distribution channels, will facilitate the transfer of the same experience to theirs home that’s why they will have additional reasons to visit “the third place”.

Strong Competition in China. Luckin Coffee

It is present either directly or through licenses in 80 countries – with varying results – and the strategic points are USA and China. In fact, it is in China where they are encountering a first-timer but strong competing operator: Luckin Coffee. This startup (October 2017) has already opened 2,000 outlets and plans to double them during this year 2019 beating Starbucks in the Chinese market. With -30% lower prices and focused on a queueless service, take away and Home/Office Delivery Luckin Coffee is managing to change habits in their compatriots.

Innovation and size can work together

Innovation and size can work together and Starbucks achieves very high levels in omnichannel, loyalty programs and advanced initiatives in corporate responsibility as support in the secondary and university education of its employees, hiring 22,000 wives of military veterans and a strong commitment to sustainability and the environment. Profit and support local communities live together and feed each other very well.

Beyond the product, beyond the price

Approaching its 50th anniversary, It gets a renewed experience that makes its followers continue to consider it as their third place: Home, Work and … Starbucks. Beyond the product, beyond the price.

More info: carlos.dominguez@mheconsumer.com

www.mheconsumer.com

Starbucks Merchandise

For some conventional Retail chains, flagship adjective is synonymous with point-of-sale that generates heavy losses. Efforts by some brands like the one Nike makes in this new flagship only have a good reason to be when there is a clear focus on omnichannel and core wholesale activity.

Located on NYC’s Fith Avenue and opened on November 2018 with more than 5,000 square meters of surface and six floors. Originally named as House of Innovation, follows  the track of the first opening of this type of Nike store in the Asian continent, not randomly (Shanghai).

It contains within it different new concepts, some of them already tested individually:

  • Nike Speed Shop
  • Nike Sneaker Bar
  • Nike Expert Studio

Nike Flagship NYC

Nike, with a growth of +10% annual sales (with only +1% stock) and consolidating margins, materialises in this new flagship store its three principles:

+ Innovation
+ Speed to market
+ DIRECT to client

Direct to client
“DIRECT” sales to customer already account for 1/3 of Nike’s total including own retail and ecommerce, the latter with year-on-year growth of 25%.

Platforms vs individual products
They are not based on merely releasing new individual products to market. Otherwise they make use of already proven platforms (e.g. Air Max) as a growth vehicle through new models designed much faster than the past.

Innovation
Strong support and development of its app and omnichannel with new features such as:

  • Click & Collect internal in store. Looks and individual items
  • Scan & try
  • Express Check out paying from mobile without going through the cash register
  • Extreme customisation for some products
  • Selection of the goods displayed based on online analytical criteria for the specific geographical area where it is located
  • Members of Nike Plus community enjoy special perks and privileges such as personalised assistance, express shipping and increased product customisation possibilitiesestadisticas-min (1)

Nike NYC Flagship

 

Mhe works for major chains and brands improving retail strategy and operations

Retail Customer Experience Optimisation

For some conventional Retail chains, flagship adjective is synonymous with point-of-sale that generates heavy losses. Therefore efforts by some brands like the one Nike makes in this new flagship only have a good reason to be when there is a clear focus on omnichannel and core wholesale activity.

More info: carlos.dominguez@mheconsumer.com

www.mheconsumer.com

 

Nike Speed Shop

Load More

Copyright ©2019 | MHE Consumer

Send this to friend