Posts Tagged "omnichannel"

Nordstrom NYC opened. Department Store Evolution.
Is the Shoe Bar the future?


Nordstrom Shoe Bar

More than 120 years in business. Continuous transformation

Nordstrom, since its start more than 120 years ago selling high segment footwear, has been evolving in line with its customers to become the best service exponent in the segment of Department Stores specialized in fashion, footwear and accessories.
Last October, it opened its first full size store in the heart of NYC, 35,000 sqm. and 7 floors dedicated to the woman to complete the previous opening of an adjoining building dedicated to the man. It has taken eight years to execute it since the building was completed.
Nordstrom is a retail business with sales exceeding USD 15 billion, 75.000 employees but without substantial growth or adequate end profitability in the recent years.

Results Evolution Nordstrom V english

More than 30% of its sales are already digital

No one could have imagined a decade ago that more than 30% of their total sales became digital. The transformation of the business into omnichannel has been a priority and focus of the bulk of its major investments in the last 5 years.
The impact has materialized in a transfer from sales to digital activity, without the total having increased substantially and experiencing an increase in costs in the business. The same story is repeated in the different retail sectors. Omnichannel is necessary but not sufficient to ensure survival and success in profitability.
Its Off-Price Nordstrom Rack stores already account for 1/3 of its total sales and with higher relative growth than the Full-Price Traditional Department Store.

Nordstrom Digital sales Venglish

 

Mhe Services

Retail Strategy and Operations >>

Innovations in the recent NYC store

Among the omnichannel initiatives Nordstrom has implemented include:

  • Priority and emphasis on areas to collect goods purchased online (click & collect)
  • Ease of returns with an express “self-service” system kiosk
  • Collection and processing of returns of goods purchased online from other competitors
  • Diversity of alternatives for the customization of the goods; from sports shoes to jewellery
  • Background stage and optimal brand pop up space for Instagram…

 

Nordstrom NYC popup
Nordstrom Express Services
Nordstrom Shoe Personalisation

They also include:

  • Single common treatment of environment and space for different brands
  • High efficient fitting room areas
  • Buying and selling second hand items
  • Joint development of the Nike store for women adapted for Nordstrom format

Food & Drink and Retail Customer Experience

But, without any doubt, the biggest change lies in the treatment of Food & Drink operations across all floors and departments, adapting and integrating Food & Drink to each customer segment and in line with its shopping  itinerary.

Its maximum exponent is the Shoe Bar, where the purchase of footwear lives together with the consumption of drinks. Between pair and pair, cocktails to the customer’s taste. Who was going to tell us that Drinks and Shoes worked so well together!

Nordstrom Shoe Bar

Department Store format. Dynamo or Dinosaur

Department Store format, across its different typologies, has some common elements of the business such as:

  • Need for a higher specialization towards personal products and services. Exceptions such as John Lewis (UK) in the home sector are rare
  • Strong commitment to improve customer experience and integration with highly developped Food & Drink  operations
  • Strength in the area of financial services as an additional income
  • The role of International Brands shop windows now has to live together with the direct presence to the consumer DTC (digital and own stores)
  • Strong investments and digital transformation that transfers your sales (like liquids) from your stores to omnichannel without adding real growth and increasing costs
  • Unique real estate assets that have been authentic “oxygen ” for these businesses
  • Non-optimal performance in shopping malls vs high street locations
  • Rationalization of the number of current stores
  • It is  not easy to replicate the model on a large scale and internationally. Singularity

Nordstrom Branding

Nordstrom NYC

Nordstrom keeps on innovating in search of its profitability.
Who was going to tell us that Drinks and Shoes worked so well together!

More info: carlos.dominguez@mheconsumer.com

www.mheconsumer.com

 

“Not much ado about something “

ULTA Beauty. High Performance Retailing Mirror

ULTA interior

  • Founded in 1990, it is in the stock exchange and currently has almost 1,200 of its own stores, all of them in the USA, with an average area of 1,000 sqm. They have scrupulously fulfilled their plans to open 100 stores / year in the last five years. The estimated optimal potential for Usa is a total of 1,700 stores. Further, you will have to start an expansion in other geographic markets.
  • All its stores have a hairdressing salon (100 sqm) with more than 10,000 people working only in this service.
  • They are especially strong in cosmetics (above 50% of their sales). They offer an assortment with 25,000 references, 500 brands and top 10 suppliers represent 2/3 of the business. They also have their own brands and some external brands such as Kylie – digital natives – exclusive for their physical stores.
  • Its authentic machine room is its loyalty program with 32 million members and they contribute 95% of its sales.
  • With a strong omnichannel vocation, ecommerce already accounts for more than 11% of its sales and those customers who use more than one channel have an x3 expense higher than what they only buy in physical stores.

 

ULTA Exterior

Talking numbers

ULTA, as the leading chain (sales of USD 6,716 million) in the USA specialized in perfumery and cosmetics, has a discrete business card and the analysis of its results generates a special satisfaction when it is verified how a company of that size has doubled its turnover in just 5 years in an organic way and with an operational efficiency without frights or “big headlines”ULAT Evolution 5 yearsULTA-sales-evolutionULTA-Income-Evolution-

 

Operating model with proven track record of real benefits

  • The growth in sales has been achieved maintaining the solid profits (before taxes) of 13% on sales. Vital constant of this business and in clear contrast to the “Unicorn” business models that occupy the main comments in the current economic news.
  • Traditional retail KPIs such as sales productivity per meter (USD 6,000 / m2), inventory turnover (x5 per year), LFL growth to comparable surface … coexist with selective investment initiatives in artificial intelligence and virtual reality start-ups that are incorporated Gradual way in business.

And all this is being achieved with a board of directors made up of 11 members with an average age of 60 years. Experience, good work and a culture open to innovations that work

 

ULTA-attributes-EN-

Mhe Services

Retail Strategy and Operations >>

 ULTA vs Sephora

  • There is strong competition in this sector in the different existing channels including department stores, consumer generalist and specialists such as Sephora.
  • The boundaries between the mass market segment and the selective “Prestige” have become blurred and in the case of ULTA customers, ¾ they are both mass market and Prestige.
  • The cornerstone of ULTA’s progress has been the continuous improvement and upgrade of the half-accessible brands to match them in their store setting and attention with the selective channel.
  • With a wide range of age / socio-economic level of its customers there is a gradual convergence between the two leading operators ULTA-Sephora

ULTA Brands

ULTA ¡They have a Plan… and know how to execute it!

Always with changes not abrupt but that occur and are executed with a clear purpose.
Sephora and ULTA, two different paths that converge over the years. Nike and Adidas, Sephora and ULTA … the binomials work.
Health and beauty is clearly a mirror where to look for other retail sectors

¡High performance and profits do not go out of style!

More info: carlos.dominguez@mheconsumer.com

www.mheconsumer.com

 

Casper. Native Digital Vertical Brand. Direct to Consumer

Improve customer experience as a starting point

  • Casper, with only 5 years of existence in the USA has generated a new segment in the rest sector selling mattresses online and delivering them at home in a box.
  • Its starting point was to improve a mediocre shopping experience on the part of the customer that compared it with the purchase of a second-hand car.
  • Getting a company valuation over USD 1 billion at this time has not been an easy task.
  • Among the investors in this Unicorn company are profiles as diverse as Private Equity, the TARGET retail chain and some famous people such as Leonardo di Caprio.
  • Since its start, Casper has developed a very simple and easy to communicate assortment, fleeing the crowd of alternatives available in the sector of materials / specifications / measures similar but different.
  • The price range starts at USD 300 up to USD 2,750.
  • It has its own production.
  • It has always led to the testing of its products (100 nights) and facilitated its possible return at no cost.

Casper Interior

Strong sales growth but still losses

Casper’s sales went from USD 373 million in 2018 to an estimate of more than USD 550 million in 2019. Still in losses (USD 64 million in 2018) has consumed the usual 5-year grace period granted to Unicorn companies.
It is currently in the expansion phase in new markets such as Canada, UK, Germany and Asia.Attributes-Casper

 

Numerous competitors replicating the Casper model

  • Casper is no longer alone in this segment. Among its most direct competitors are Brands like Tuft & Needle, Purple, Nectar Sleep, Leesa Sleep, Allswell (Walmart), Evesleep (UK), Simba (UK) … There is a substantial increase in revenue but it is still a business model With operating losses. Most of these brands, being digital natives, already have selective distribution agreements through some existing retail chain (home specialists, department stores …).
  • The downside is in the difficulties encountered by more traditional specialist chains such as Mattress Firm that had to close more than 700 physical stores in the USA in 2018.

 

Retail Strategy and Operations Specialists

MHE Services >>

 

Differentiation and creativity

Creativity, humour and innovation have always been present in Casper’s marketing. They highlight co branding campaigns such as the one carried out for the business class of the American airlines or the successful campaign based on hieroglyphs for the NYC Metro network.

Amercian-airlines-and-Casper-collaboration

casper-subway-puzzles

Retail Approach

Native digital brand, opened its first own store in 2018 in NYC. It currently has about twenty stores of its own and are present with corners / linear in more than 1,000 Target stores in the USA.
Its main channel is its own Online and they also sell through Amazon.

Casper y Target

Elements in common of the “DNVB” (Digital Native Vertical Brands)

The new Direct Consumer Marks (DTC) tend to have a number of common characteristics:

  • Digital natives
  • Focus on the relationship with your customers. Obsessed in the Customer experience
  • Disruptive in its sector. They generate a new competitive environment in their segment
  • Intensive use of social media
  • They use the content as a differentiating element of their Marketing and with a clear Story to tell
  • Own retail very limited
  • Agreements for selective implementation in other existing retail chains

The performance results also tend to converge:

  • Strong growth of their  income (35-50% per year)
  • High customer acquisition costs (CAC)
  • Significant operating losses in the first 4-5 years
  • Difficulties when they start to go public (IPO)

Even if they are not easily consolidated as a viable business model, they have a strong impact on their more traditional operators who are incorporating some of their characteristics spurred by a consumer, who logically embraces the new commercial approach without entering those “little ones” profitability details.

More info: carlos.dominguez@mheconsumer.com

www.mheconsumer.com

 

Unicorn with a contagious smile

Smile direct club store front

Breaking Moulds

The health sector is not inmune to digital transformation and improved customer experience. Smile Direct Club has identified as an opportunity to facilitate a smile with well-aligned dentures without having to go through the brackets, frequent visits to the orthodontist and with a 60% smaller budget.

In just 3 years it has already  more than 300 stores of its own in Usa, and it has recently started (3T 2019) its expansion in Canada, UK and Australia.

It makes the experience more accessible. The customer chooses how and where to start it: at home or in one of its stores

The innovation focuses on making an orthodontic treatment easier and more accessible by means of invisible moulds, made using 3D printers that the customer changes without having to go to the physical consultation of the specialist. Using an initial kit that is received at home or on a visit to its stores, the treatment is initiated and it is monitor by the specialists remotely used an app on the mobile. The duration of treatment has been reduced by half (6-8 months) of the traditional and cost by 60% less.

doctor-directed-SDc-Rempte-controlled

Sales growth and astronomical losses

Belonging to the “unicorns” league (start-up with a valuation of over USD 1 billion) listed since this September 2019 on the Nasdaq. As appropriate, it has been doubling annually its income and losses over the past 3 years. Customer experience at the stroke of a talonary.

Sales-SMD-compressor

losses-sdc-compressor

 

Specialists in Strategy and Retail Operations

MHE >>

 

Initial challenges. Their main supplier and corporativism of specialists

Not everything has been pink in their way. After a frustrated initial collaboration with its Invisalign supplier, it has currently  the largest existing global plant of moulds made using HP 3D printers (produces 20 million moulds per year).

The main challenge it faces now is the corporate struggle undertaken by the collectives of orthodontic professionals who are trying to stop their expansion.

Lab-ed

Extreme Omnichannel

Its website, with more than 5 million visits, feeds its store network  in shopping centers and urban centers. It also has a fleet of travelling buses to bring the experience to new places before the opening of new shops.The channel with the highest growth is the progressive opening of up to 1,500 “implants”  corners with reduced dimensions within CVS pharmacies/drugstores in the USA.

The management team has already extensive experience in this type of situation. They have previously developed similar businesses in:

  • Contact Lenses (1-800 contacts)
  • Diabetes Care (Simplex Health)
  • Hearing Aids (Hearing Planet)

standard-bus

Retail Implications

In all these cases they have applied the same recipe:

  • Simplification of product/service range with the implementation of technological innovation
  • Competitive priced
  • Elimination of friction points in the customer experience
  • Greater self-control by the customerl of the process Omnichannel
  • Selective use of a physical network of stores, own and third parties

With an initial overvaluation (like good Unicorn it is) and downward stock exchange quotation , Smile Direct Club is an example of the current transformation taking place in Retail.

There are no exceptions. Which subsector will be next one?

More info: carlos.dominguez@mheconsumer.com

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 ©2022 | MHE Consumer

Send this to friend