Posts Tagged "omnichannel"

“The only thing I want is …everything”

Given this statement of the consumer, “the only thing I want …is everything” in the omnichannel environment, the chains-brands make an effort on selection and prioritization of those initiatives more relevant inside each sector.


Each functional area has a great specialist

Adidas on Web, Springfield in Mobile, Media Markt in Store, Kiko in Marketing and Apple in Customer ServiceOmnichannel by functional area


Strong presence of Inditex group in the top ranking of Store area

There are three brands of the group in the Store’s area top 10: Zara, Pull&Bear and Stradivarius

Amazon … remains the King

Excluding Store area, Amazon is still taking up the first place on Omnichannel initiatives terms although differences with retail operators are getting smallerMhe Consumer

its star omnichannel initiatives

  • Fashion: Click & Collect
  • Home: Stock Visibility
  • Technology: Comments and Track order
  • Health & Beauty: Rating and Videos
  • CPG: Delivery options and Own app
  • E-Players: Returns and Track order
    Omnichannel Index Mhe 2018

Health & Beauty Omnichannel Mhe Retail Index 018

*Other sectors such as Fashion, Home, Leisure & Technology and CPG are available. Please download below.

Priority of those initiatives with higher impact on Customer Experience

  • Given the flood of new alternatives of available omnichannel initiatives, is especially important to prioritize those that have higher positive impact for the Customer Experience in each sector
  • If new initiatives are not going with a format adaptation, commercial planning operations store, marketing and location strategy, the main return of investments will be lost

Omnichannel Mhe Retail Index 2018


 Mhe RetailCains coverage


Mhe works for retail chains and brands optimizing formats in an Omnichannel environment


International vision, consumer insights and external benchmarking

Omnichannel environment transformation

  • Customer Experience optimization
  • Assortment adaptation
  • Promotional activity optimization
  • Commercial efficiency in store operations
  • Locations strategy and POS typology

If you want to confirm where are you vs your competitors in an omnichannel context and where to go do not hesitate to contact us

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¿Where are you vs your competitors in an omnichannel context and where to go?

Leading retailers concentrate their efforts in those omnichannel initiatives that, mainly through mobile, have a greater impact on costumer experience and that entail an important operational transformation in the physical store. Here lies the main challenge of the sector.


Decathlon, leader for the second consecutive year

Decathlon, Kiabi and Ikea lead the top 10 of the multisectorial ranking. There is a strong omnichannel activity going on in 2018, highlighting that 6 of the top 10 brands that join the group of featured in this edition of 2018.
There is still room to incorporate possible new omnichannel initiatives. The most advanced score is 2/3 of the theoretical maximum possible.Top Ranking Omnichannel MHE 2018

Ikea Mobile Omnichannel MHE 2018

Advanced and Laggards

The level of omnichannel development is not linear and the digital gap between Advanced and Laggards operators is widening.
By areas, marketing is the main gateway to omnichannel and is where there is less difference between Advanced and Laggards.
On the other hand, in Store and Mobile areas, the gap between the two groups of retailers is more noticed.
Initiatives where there is a wider gap between Advanced and Laggards are: real stock visibility in store, click & collect and own app.Advance vs Laggard Omnichannel 2018Adnace vs Lggards by Area MHE

2018 vs 017 Evolution

The initiatives that retailers have incorporated the most, are those that integrate the physical store through the mobile in the customer’s journey related to payment methods, Click & collect and availability of stock.

Differences between the various Retail sectors

Leisure and Technology continues to maintain its leadership in the omnichannel field. There is a progressive convergence between sectors, highlighting the strong growth of Fashion.ranking by sector omnichannel MHE

methodology Omnichannel MHE 2018

Area and Chains Omnichannel MHE Retail Index 2018

Omnichannel is not a mere additional layer to the conventional management in Retail

The incorporation of new omnichannel initiatives makes more evident the need to transform and integrate conventional channels to achieve greater real operational efficiency, and not only additional costs for the existing business model.

Mhe works for retail chains and brands optimizing formats in an Omnichannel environment


International vision, consumer insights and external benchmarking

Omnichannel environment transformation

  • Customer Experience optimization
  • Assortment adaptation
  • Promotional activity optimization
  • Commercial efficiency in store operations
  • Locations strategy and POS typology

If you want to confirm where are you vs your competitors in an omnichannel context and where to go do not hesitate to contact us

More Info:

Download Summary

To be up to date in retail:


Amazon Books. Physical store. Back to the future

Many successful online initiatives have been incorporated to a physical context with a traditional wooden atmosphere, excellent location, low merchandise density, and distilled assortment with the help of advanced sales analytics and customers ratings. Overall, it is a magnificent promotional tool for its PRIME service with substantial discounts in the selling price.


Two years after the opening of its first physical bookstore, Amazon is operating with fifteen selling points in experimental phase.
We have recently visited the two establishments located in New York, the last one in 34th Street, opened only 4 months ago.
Lower in- density store compared to its sector (3.000 options vs 5.000 in regular conditions), eases the display of a more clear and effective visual merchandising. Frontal presentation of the books and the area dedicated to divide each one of the titles provides aid in the search of what you are looking for.


The biggest innovation is the usage of the available online analytics to distil its huge assortment and be able to really offer the selection of more relevant books and with higher sales for the customers at the store. Among other criteria, Amazon apply the following:

  • online customers’ ratings. For example, book segmentation with a rating higher than 4,8 – over 5 – with more than 10.000 opinions
  • those books which customers have taken less than 3 days reading it completely in a mobile device, such as kindle
  • titles with higher number of reservations and pre-sales to its effective launch
  • books with higher acceptance level among online readers in the specific area where the store is located
  • cross recommendation of a book for those interested in other based on online sales analytics

Specific opinions and comments made by other digital customers are displayed individually on store shelves providing genuine help among the readers  

Mhe works for Retail chains and brands optimizing their formats in an Omnichannel environment



Books aren’t labelled individually with selling price because customers members of Prime service have succulent discounts, displayed in-store, above 25%. In practice, this duality of prices (Members / Non Prime members), converts the physical store in the best promotional machine of this service/subscription that is having so much success, and that Amazon encourages now with higher strength through monthly fees (10€) more affordable for new customer segments.

Children’s reading segment is over-dimensioned in a deliberate way to provide interaction possibilities which are not available online.

Besides books, Amazon offers in its stores an excellent display of digital reading devices, voiced personal assistants, digital services as music and tv. In short, an excellent opportunity to offer a showroom with interaction possibilities with the product and support of curated sales assistants.

Sale system is self-service with main support of digital devices and selective specialized staff maintaining in every case an environment of freedom of movement and action for store visitors.

Promotional activity is a reflection of what they have online and take advantage of the seasonality of each moment to make the product more relevant for the customer. For example; selection of titles of physical training as part of the promises and good wishes for the beginning of the year.

For purchase and payment of the products customers both the conventional ways and the Amazon own app can be used, having full integration between physical and digital channels.

In short, we can identify a fusion of digital initiatives, innovative in the world of physical bookstores, inside a wooden environment and traditional design including a little coffee area that brings into customers mind other stores of conventional chains, such as Barnes & Noble that have suffered the digital transformation in this sector.

We are facing a business model with great advances of digital integration and keeping relevant and conventional aspects of a bookstore. The fact that Amazon only has 15 stores (in two years) claims that Amazon Books will continue to evolve before proceeding to its potential expansion. It will be an authentic Back to the Future.

MHE, retail consultancy, works for brands and retail chains in strategy and operations in omnichannel environment.

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Amazon introduces new patterns in the Fashion sector. Customer will decide.

The strong bet of Amazon in the Fashion sector is not only based on the powerful introduction of its new own brand “FIND” for men and women, it is also adding new patterns that are  new for the sector. Some of them will be appreciated by the consumer, others will not. Sometimes they might be replicated in the physical stores and, in other cases, they will have to remain in the online arena.

Dynamic Pricing

It is by far, the area where Amazon incorporates the largest number of novelties for Fashion.

Continuous changes in Prices

For a similar clothing product, Amazon changes prices an average of 9 times during the season, while a department store (eg Macys) just changes 2,1 times per season, and clothing specialists, such as Kohl’s, just 1,6 times per season.
Sales period will not be the same ever. Relevant price endings and price points for costumers in brick and mortar won’t have the same importance in an online environment.

Different prices at colour level and size for the same model

Amazon doesn’t innovate just in time factor. The difference with fashion specialists is that Amazon starts with just one unique sales price for all colors and sizes in the same product and applies its predictive analysis based on sales, stock and availability at size and color level.
Amazon prices by colourAmazon colour and sizes selling price

Thus, it is usual practice in Amazon that, for the same garment they provide different prices based on color and size and always based on customer sales criteria and not original cost prices and mark-up.
It will be difficult to implement these criteria in stores. But, who knows… 3 years ago nobody could imagine “free delivery” at home just the day after the purchase.Amazon sizes and prices

Consumer ratings

The massive use of user generated content, providing ratings and comments by other costumers, has demonstrated huge effectiveness in other retail sectors where Amazon has a higher weight, like electronics. Fashion is introducing this new pattern that provides confidence in Brands based on other costumers opinions.
The use of costumer ratings is done through filters and relevant segments for each type of product. In addition, Amazon incorporates costumer opinions from other countries where the same product is sold. Amazon manages in a superlative way the popularity of the products by UGC.Amazon consumer ratings

Echo Look

This initiative provides the facility of take pictures of products tested at home by customers. Through a specialised application you can receive recommendations about other products or offers regarding different brands that combine better with costumer preferences. It is like a “personal” assistant to facilitate the clothing purchases. Amazon Echo Look

Prime Wardrobe. Try before buy

In this case, Amazon provides to their “Prime” clients the possibility to monthly receive a box with 3 to 10 fashion products selected by customers to be tried at home. The costumer try on it at home and can return the garments they are not interested in.
Based on the number of items that the customer acquires, they receive a 10 to 30 € discount. This service is similar to the “subscription” model in other sectors. It is an advanced version for home of smart fitting rooms, which its use is now increasing throughout retail chains. Amazon Prime Wardrobe

Prime Service. Shopping consumer networks

The success of the “Prime Amazon” service (even with an additional charge) it has been an inspiration for the development of other shopping consumer networks services, such as SHOPRUNNER, which allows retail chains provide similar experiences to Amazon but without investing in disproportionate structures for their activity.



Other innovative initiatives for fashion

  • Wider development of the size range maintaining same model
  • Incorporate, in a selective way, men products among women items taking advantage of the fact that more than 40% of men products are bought by women
  • Literal description of products evolution to “tactile” descriptions that compensate the no physical presence of the product
  • Private brand sponsorship, promoting in a simultaneous way incomes from third brands

But not all Amazon initiatives become successful. The Amazon branded “Style Code Live” TV channel for interactive purchases has been cancelled after one year try out period without good results.

With Amazon new fashion patterns, clients are having the chance to try new experiences in their purchases, some of them will be demanded to other competitors in physical store environments as they will get used to.

MHE, retail consultancy, works for brands and retail chains in strategy and operations in omnichannel environment.

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Amazon confirms strong bet on Fashion sector while launching the new private label FIND in 5 european countries (including Spain) during this AW 2017

Amazon surtido vestidos FIND

  • After 5 years selling external clothing Brands Amazon and testing around 7-10 different private labels targeted to specific Market segments has officially launched this Autumn-Winter a full women/men collection under the private band “FIND”.
  • MHE, retail consultancy, has analysed in a detailed way using the proprietary benchmarking tool “Market Mapping” the FIND women clothing product assortment vs the main clothing specialist chains in Spain such as Zara, H&M, Mango and Primark. The scope has been the assortment width, product mix, price architecture and colour architecture. In addition an objective end use and fashion style position segmentation has been elaborated. This report contains the main conclusions when comparing FIND with Zara, H&M, Mango and Primark.

Assortment Width

  • Amazon-FIND position in terms of number of options and average selling price is very close to the Market leader ZARAWidth and price assortment Amazon



  • It is not the case that FIND only offers basic product at entry prices. FIND proposition is FASHION (not only commodity clothing) and a price range equivalent to the one in H&M


total price architecture Amazon FIND MHE MM


  • Tshirts is one of the strategic product category where FIND covers the full range of selling prices.
  • In terms of number of different price points, FIND has the highest number among the analysed competitors.Tshirts Amazon

Product Mix

  • Product mix offer proposed by FIND makes a higher emphasis on Dresses and Tshirts vs other retail chains
  • Top/bottom ratio is substantially higher in FIND vs total market taking advantage of better suitability to sell online these product categoriesProduct Miix Amazon


Colour Architecture

  • Only 25% of FIND options are represented in “fashion” colours. In this way, fashion risk is mitigated and it plays fashion image perception against reality game. By far, black (with 30% of the total options) is the most frequent colour
  • This colour architecture matches the policy implemented by other global players (Zara, H&M and Mango)Colour Architecture Amazon

End Use and Fashion Style position Segmentation

  • MHE has defined and objective visual images grid segmenting end use and fashion style positions. The it has been applied to the assortment online of the different retail operators analysed.
  • Amazon-FIND assortment is clearly concentrated on casual and soft casual segment and updated style position in a much higher proportion that the other operators.
  • In this way FIND avoids dilution and impact when discarding other market segments while concentrating on a reduced number of segments.E Fashion Style segmentation Amazon

Importance of design/style/taste and other qualitative attributes. Centralization

Zara Madrid Noviembre 017

  • To have a good strategy and assortment planning is an important step but not enough to succeed. Operational centralizations of companies such as Amazon may face some difficulties to adapt, specially women fashion, a single design and managed European assortment to such a different local tastes of countries like United Kingdom and Spain.
  • This difficulty is not unique for Amazon, in fact other global clothing specialists have gone already through this process.
  • Taking into account that Amazon gets the best results in new products/services after a period of 5-7 years of activity from the start we forecast that FIND has come to remain in the Market. This will continue…

MHE, retail consultancy, works for major Brands and Retailers in commercial strategy and operations in an Omnichannel environment.

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Continous increase of e-Commerce sales participation in all retail sectors than comes with an slight Ebitda reduction during the last five years


Restoration Hardware

  • Tell me in which retail sector you are and I will tell you what percentage of your sales should come from eCommerce (from 4% in mass market sector up to 22% in leisure/technology . Also what growth perspective you should have.
  • MHE, retail consultancy, has analysed the results and eCommerce performance in 55 retail chains representatives of major sectors such as fashion, leisure/technology, home, health and beauty and mass market formats in USA during the last five years (2016-12). This market provides good and consistent data and available to the public. 



e-Commerce participation  as a % of total salesTarget-electronics-Interior

  • e-Commerce already represents 9% of total sales in the whole group of retail chains selected
  • Leisure/technology sector keeps on heading the group (22 %) without any surprise in the sales
  • Starting point was not very similar depending on which sector you are but as time goes on, a convergence of major retail sectors can be perceived. Home sector, with an outstanding +23% eCommerce CAGR sales growth is catching up quickly
  • Health & Beauty are coming closer and closer in many aspects and eCommerce is not an exception for this merging trend.



e-Commerce CAGR sales growth  per retail sector in period 2016-12 

Yearly growth rates across sectors can be grouped in three bands:

  • Home goods with 23% CAGR
  • Leisure/technology with 16% CAGR
  • Fashion, heath and beauty and mass market with 11-12% CAGR


Impact on Ebitda

  • Ebitda has suffered an small erosion during the period 2016-12 reaching 6% of sales in year 2016
  • Negative correlation is shown below between eCommerce sales share and achieved Ebitda. This reduction can be caused by several factors including lower prices, higher operation costs (certainly at the incipient eCommerce phase) and potential store sales productivity linked to eCommerce cannibalization


“Winners” segment

  • We have identified a group of retail chains (winners) that are over performing in the period of 2016-12 to check how eCommerce is doing in these organisationsulta-beauty
  • e-Commerce sales mix (15%) in 2016 is much higher than the average for the whole companies group (9%)
  • Winners are enjoying a higher substantial CAGR in sales over the period (2016-12). What really makes “winners” different is the CAGR sales growth for their physical stores 12%. Therefore, it is clear that their good performance is not only based upon eCommerce activity but improving significantly also their stores productivity
  • On the other hand, Ebitda has suffered during the same period from 19% on sales to 16% in year 2016

Future developments in the retail sector will not be purely eCommerce based, spite of its continuous sales growth. The transformation should include as well a clear physical store improvement task.

The main challenge ahead in a growth mood will be to sustain the current Ebitda (as % of sales) and satisfying at the same time new Omnichannel customer expectations.


MHE retail consultancy, works for major brands and retail chains to improve strategy and operations in an Omnichannel environment.

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