Blog 7 | CEO’s about their response to the new normal

By News, Retail

Through an exchange of letters, Marjon Kaper (CEO ANWB Reizen) and Erik-Jan Mares (CEO Zeeman) provide answers to four questions posed by Bram Gilliam and Jasper van Rijn (IG&H Retail), focusing on how they address and institutionalize the challenges and changes they are facing as a result of the corona crisis.

During one of his first press conferences on the corona crisis, Mark Rutte emphasized the measures introduced in our country were of unprecedent scale. All of a sudden, our main concern was focused on feeling safe, whether at work, in shopping streets or on holiday, something we never experienced before. Safety currently comes in the form of a 1.5-meter society. A society in which we always keep our distance and a travel ban applies to many countries. At the same time, the need for personal contact and interaction is bigger than ever, in order to motivate employees and retain customers. It feels like a contradiction and creates a challenge for organizations to add social value to their offerings. It does not only require adjustments in communication towards customers, on the shop floor and within the supply chain, but it also requires adjustments in the organization itself.

1.5-meter economy
Today, we are aware that the measures stabilizing the spread of the coronavirus will have a structural impact on our society. The Dutch government asked all branches to provide action plans on how to rebound business, while guaranteeing safety of customers and employees. A strict entry policy, clear store routing and high tolerance in rebooking of travel plans are examples of the rebound plans in your branches. Personally, it makes me wonder what the 1.5-meter economy does with the people behind these plans. I can imagine it takes various approaches and requires scaling up at different paces for every single business unit, from head office employees to front line staff and travel guides. This brings a high level of complexity.

What actions did you take to make your employees feel safe and secure?  

Erik-Jan Mares
This question takes me back to March 13th, the day that the coronavirus reached our country and things changed. Up to then, Zeeman only experienced some delayed inbound shipments from China, but from that point onward it became clear the virus was going to have a much bigger impact. To make things more complex, Zeeman is operating in seven different countries, all reacting differently.

The most important thing we did was communicate frequently to keep our teams informed and simply to show that we care. ‘We can imagine how you feel, that you are scared or uncertain and that you wonder why your store is open or not‘ – these are all examples of topics we wanted to talk about. We mostly worked with videos to get across a more personal message. Next to that, I personally visited 19 stores (1 in each of our Dutch regions) in the first three days of the lockdown to show our support and to really understand what was going on. An intensive, but very rewarding thing to do.

Afterwards, people felt a little more confident and at ease. In this crisis, safety and business continuity seem to be on opposing sides. This brings up a discussion which you can move away from or directly address and we tried to do the latter one.

Marjon Kaper
What a strange situation we are in, right? Who could have imagined that the entire organization (in our case over 300 colleagues) would work from home for more than two months? After Mark Rutte announced that we “should stay at home as much as possible”, we quickly arranged that all our colleagues, including the ANWB Reizen customer contact center, could work from home. In the first weeks, there was a lot of work to be done. As ANWB Reizen, we are active in tour operating, camping and leisure activities (a day out, walking and cycling in the Netherlands) and we run ANWB Golf. In a short time, we had to cancel all organized trips and activities, inform our customers and repatriate 2000 travelers from all over the world. All this was achieved from the attics, kitchen tables, or living rooms of our colleagues.

This experience made me realize that you do not have to be physically together to get things done, and that there are endless possibilities to work remote. I believe that leadership and creating trust are always important, but the physical distance created by this crisis poses the real challenge. In times like these it is more important than ever to be transparent and approachable. We try to create continuous insights into how we are doing as a company and emphasize that we are part of the larger ANWB, which is a healthy organization with healthy financial buffers. Also, we have continuous and open contact with the works council, having constructive discussions on a weekly basis. We regularly communicate to our people through vlogs and blogs and next week we will be meeting with senior management to catch up on the latest details. We have a great way to enable all levels of the organization to speak up on what is on their mind, through our internal social platform “ANWB talks”. The platform offers the opportunity to discuss and share all kinds of topics. This can be a specific group, in terms of interest, but also top down. We encourage colleagues to respond and interact here.  

Now, it seems that we can meet each other again soon, in person. We prepared a plan in which approximately half of the employees can come to the office, considering the 1.5-meter distance. We aim to maintain the efficiency that working from home has brought us, reducing travel time and traffic jams as much as possible. The office is increasingly becoming a place where you want to be, every now and then, especially to meet your colleagues, but not a place where you must be present every day to sit behind your desk at 8.30.


Leadership
Managing and supporting employees has become top priority in organizations due to the corona crisis. Organization leaders are called upon to lead organizations through the crisis. This requires a delicate balance between masculine (a directive and decisive approach) and feminine (focusing on connection and intuition) leadership styles. On the one hand, leaders must project calmness and control to remove uncertainty of employees. On the other hand, inspiration and trust must be projected to keep employees motivated and confident. We see examples of organizations doing their utmost best to inform and involve employees. For example, CEOs who take the time to share thoughts and developments with their organization through weekly of even daily video messages. Moreover, we see decisions being made fast and decisively, for example in expanding e-commerce capacity.

In your opinion, what are the key leadership traits you rely on in times of crisis?

Erik-Jan Mares
My preferred leadership style is to give trust and responsibility to the team. However, in times of crisis, I temporarily switch to a more directive and decisive style. The management team participated in a training last year, making the team well-prepared for this switch in style when the crisis hit our country. Still, we discussed as a team how to allow for fast decision-making and consciously decided that this would centre around very few persons only. I think the whole team appreciated this discussion, including myself.

One example is on the communication we discussed earlier. I had a clear view of how I wanted to bring that forward, in what tone of voice and with clear focus on empathy, which I guaranteed by personally staying on top this. Currently, the responsibility is fully back with the team. So, if you ask me, the most important leadership quality required during a crisis is decisiveness, hand in hand with keeping the human dimension (‘menselijke maat’)

Next to that, leading by example is a practice I strongly believe in. You do not know what goes on in the minds of others, if you have not experienced it yourself. Creating visibility, showing that you care and starting a conversation. In this way the store visits I talked about earlier are very important for me as they provided a real opportunity to be in touch with so many people.

Marjon Kaper
In general, I do not think there is a big difference between leadership during a crisis or leadership during “ordinary” times. As a leader, I believe it is always important to indicate the direction in which the organization is going, that you make quick decisions and communicate them, as well as being approachable and accessible to your colleagues. The current situation does present additional challenges to the leaders of the organization. For example, communicating with the right tone or remaining visible and approachable, as mentioned above, are more challenging from a (physical) distance, when everyone is working remotely. As management, we write blogs and record weekly video messages for our colleagues. We also try to pay special attention to the social aspects of working, for example by organizing digital drinks. Fortunately, we are not unique in this and we see many organizations around us who do this.


Culture 
“Only a crisis produces real change”, economist Milton Friedman once said. Changes, which typically take years, are now gaining momentum. These changes become visible in many areas. There is an increasing demand in home delivery, children are following online classes and elderly know how to use digital channels. A similar movement is shaking up organizations. A digital working environment is slowly becoming the new normal, possibly bringing structural benefits. New partnerships arise, deeper as well as wider into the supply chain. These changes seem to be accelerated by employees showing a greater amount of decisiveness and focus. In my opinion, the challenge is to institutionalize the positive side of these changes to unlock a structural, more efficient way of working.

Could you describe how the Corona crisis changed the culture within your organization and how you attempt to institutionalize the positive aspects?

Erik-Jan Mares
The culture of Zeeman focuses on frugality (‘zuinig’), on genuine care of people, resources and society. We are a family business with a high level of involvement, acting differently and being a little bit headstrong (‘eigenzinnig’).

At the start of the crisis, the way of working at Zeeman changed drastically. It used to be slightly old-fashioned: for instance working from home was not done commonly. Currently – and I believe that this will continue after the crisis – attending a meeting at Zeeman is possible regardless of your workplace.

Next to a new way of working, the ability to focus on a few things only enormously increased. We have always been a very lean organisation with the ability to act quickly. However – now more than ever – our focus is on ‘getting things done’. We switched from thorough and deliberate decision making, to fast, less comprehensive, but still thoughtful decision making. Herein, the key is to focus. Prioritize and focus on the three things that matter most. An example is the application we use to share the videos I referred to earlier. Within a week, we launched this application, an introduction which usually takes much more time. How to preserve these changes in the future is ‘the million-dollar question’, since the list of possible projects is already growing. Leadership can help in prioritizing and serving as an example. However, the main question is whether the organisation is ready and whether people are capable and willing to internalize this way of working.

Marjon Kaper
We definitely see acceleration in digitization. Some processes digitized at an accelerated pace during the past weeks and it is fantastic to see how skillful we have become with organizing digital meetings. A cultural change I observed, is that remote working has increased the need for trust that you must have in your people. I sincerely hope that the amount of traffic jams in the Netherlands will reduce, as a result of increased amount of trust and responsibility we give to our employees in deciding how, when and where to work. Now, the corona crisis reinforces that trust, even among managers who might have found this difficult in the past. I hope we can continue to assume that people are motivated to work to the best of their abilities. Ideally, we would only come to the office because we think it is valuable for certain activities or meetings, and not as a habit.

I also see positive changes in our way of working. We are in the middle of a transition of our internal organization and are merging a number of business components. Since January 1st, colleagues have taken up their new positions and we see that people are getting to know each other quicker and seek cooperation more easily since the crisis requires us to do so, for example in repatriating customers. The crisis is disastrous for our business, but it is an accelerator for our transition.

The big question remains, how do we hold on to these positive effects? Personally, I intend to never schedule a meeting again for which people require to be stuck in traffic; from now on I will always take that into account. I understand that this will be challenging, but in my opinion, this requires leading by example and persevere.


Social impact
While physical distance between people is greater than ever, social connection is intensifying. People look out after each other more. Spontaneous support initiatives for neighbors or local entrepreneurs arise and additional gratitude to healthcare staff is shown. Moreover, grocery shopping is no longer a daily activity, but a fulfillment of primary needs. The corona crisis puts society under a microscope, resulting in enlarged focus on the societal role of organizations. A study done by Nielsen, tracking changes in consumer behavior caused by corona, also indicates this. It shows consumers have an increased interest in the supply chain, demand increased transparency and prefer buying more local. Changes like this evoke reflection and ask organizations to think about what they truly want to represent. I am curious to what extent you reconsider your positioning in order to (re)connect to the changing world.

Does this crisis affect the role you want to fulfill in society and your company’s purpose? 

Erik-Jan Mares
Prior to the Corona crisis, Zeeman already had a clear vision of its purpose and role in society. Our way of working, with its human dimension, is who we are and what is being reinforced by the crisis. The paradox of balancing between people’s health/safety and business continuity is a topic we already discussed at Zeeman. When the government decided to keep the Dutch stores open, we felt the obligation to continue offering our products, while guaranteeing safety for employees and customers.

Another example is our CSR policy. We were already investigating how to reuse materials and increase local sourcing. From a CSR perspective, it makes no sense to circulate goods by sending them back to China to recycle. As a result, we need local facilities that can do this close by. The crisis confirms that the things we started are more valid than ever.

To be honest, the crisis is an opportunity for Zeeman to strengthen its position. We mainly focus on slow fashion, basic products that have a permanent rather than a seasonal profile and are offered at discount rates. The amount of people interested in slow fashion with great value for money might only rise as a result of the crisis.

All in all, I believe that our companies purpose together with the mentality of our people is going to make us emerge even stronger out of this crisis.

Marjon Kaper
The purpose and mission of ANWB is to let its members go out or get on the road, carefree and with great pleasure. By carefree, we mean for travelers, as well as with the least possible impact on the environment. For this reason, we compensate for CO2 emissions of all trips that members and customers make with us through ANWB Reizen. Obviously, this is not enough yet. We strive for further sustainability of the tourism sector. This was already our vision and it is strengthened by the current crisis. We do expect consumers to be more critical of travel organizations, airlines and hotel chains after the crisis, but we do not consider adjustments to our purpose necessary.

With special thanks to Marjon Kaper and Erik-Jan Mares,

Bram Gilliam
Director at IG&H
E: bram.gilliam@igh.com T: 0622564054

Jasper van Rijn
Partner at IG&H
E: jasper.vanrijn@igh.com T: 0653376760

Authors:
Myrthe van Hoek (myrthe.vanhoek@igh.com); Marijn Reiff (marijn.reiff@igh.com)

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How Retailers can rebound from the Corona crisis | 2) Fight now to take advantage later

By News, Retail

Five imperatives for retailers as they battle the Corona crisis, addressing most immediate challenges that simultaneously strengthen their future position.

It has been two weeks since the Corona outbreak has derailed the Netherlands through unprecedented measures to limit the spread. The Dutch government uses a ‘flatten the curve’ approach to fight the virus. Measures like social distancing, working from home and closure of restaurants are starting to have a stabilizing effect on the outbreak according to RIVM. Meanwhile, these measures are shaking up retail like never before.

The virus has major implications for every retailer. Both different immediate actions and preparation to rebound must be undertaken. We listed five immediate imperatives for retailers in their battle against Corona, that simultaneously strengthen their future position.

1) Use data to re-establish critical business performance

The Corona virus creates uncertainty. Uncertainty about the speed at which the virus spreads, about regulations that might be imposed, and about how long the current situation will last. For retailers, a key immediate challenge is how to deal with uncertainty in demand patterns. Customers show different and sometimes irrational behaviour. They are buying online instead of in stores due to contamination fear, they are hoarding in supermarkets out of fear for a total lock down and they are buying products to cook, sport and entertain themselves at home, since restaurants and sport clubs are closed.

In the meantime, retailers have switched to crisis mode and focus mainly on business continuity, trying to re-establish control. Decisions (e.g. around inventory) have to be made fast and are sometimes made based on business intuition or rule of thumb, rather than data driven. However, especially in these times it is of immediate importance to step up fact-based decision making. Step one is to establish access and structure to all available data (from the massive number of sources most retailers have) and turn this into sound business intelligence and relevant insight. With the level of uncertainty higher than ever, new well-structured insights are the only way to re-establish control. For retailers who do not yet have their data management and business intelligence capabilities in place, this is the time to rapidly set it up. A crash team can improve predictability of changing demand patterns step-by-step, even within few weeks. Such a team should include data science & IT and closely collaborate with buying & merchandising, and channels. Rapid roll-out of real time dashboards can facilitate decision making within critical retail processes such as online customer engagement, promotion management, supply chain planning and store merchandising.

2) Deepen customer understanding to rebound to the new reality

ING bank investigated the changes in Dutch card transactions. Their research shows a decrease in the number of transactions with 24% on March 20th this year, compared to a similar day last year. Toy stores, supermarkets and DIY see an uplift in the number of transactions (+10%; +5%; +2%), where all other retail segments show a decline, including restaurants & bars and clothing stores (-81%; -72%). This emphasizes that customer behaviour is radically changing, possibly structurally. Retailers must develop insight in demand changes to understand the new reality. Not having a grip on customer needs hurts everywhere in the business, from customer contact to product availability and prioritization of projects. For some changes, like the increase of online shopping, it is likely they will last not only during the crisis but also long after. However, other changes in demand will stay erratic and are dependent on the developments and measures the virus will bring us. In preparing for the rebound, retailers must not only respond to these customer demand changes but even outpace competitors in adjusting to the new reality. Time to find new growth opportunities.

The key to customer insight is understanding customer behaviour and identifying disruptive shifts in the customer journey. With customer insight comes the possibility to segment and develop tailored solutions. Think for example of a differentiated service for elderly people, where it is possible for them to chat or call with staff to place orders, instead of placing them online. At the same time, it helps control buying behaviour of your customers towards targeted outcomes. For example, a supermarket in Denmark came up with a pricing trick to stop the hoarding of hand sanitizers by pricing the second bottle of sanitizer 25 times as high as the first one.

To adjust the supply chain to the new normal, developing predictive analytics based on customer demand patterns is key. Since demand is erratic, only point of sale data is not a good parameter for future demand. Instead, predictive analytics reflecting new demand patterns are needed to adequately adjust buying plans, intake orders, stock management policies and allocation rules. Intensive cooperation between store planners, replenishment planners, category managers and purchasers, together with these data and analytics, makes it possible to prepare for the rebound.

3) Scale e-commerce by leveraging store network and investment in logistics capacity

Changes in demand as well as governmental measures have major implications on the utilization of retailer infrastructures. Food retailers suffer from an overburden of their distribution centres and reach their logistical as well as their technical maximum capacity for e-commerce. Conversely, various non-food retailers are closing their stores to protect their staff and customers’ health or because of a dramatic decline of traffic. Both situations ask for creativity and flexibility in the deployment of existing infrastructures.

Most non-food retailers face (a period of) further underutilized store infrastructure. To stay relevant to customers, focus shifts from offline to online sales. Not an easy task when stores used to be the main channel. If retailers succeed in having customers find their way to their website and shop online, they face a next challenge in scaling their logistics. A solution in this case might be to use the store network as customer fulfilment centres, so called ‘dark stores’. This relieves the existing logistics network. Alternatively, retailers can be creative and think about helping others. As does fashion giant H&M, who is offering up its supply chain to help hospitals reduce their medical supply shortages, by producing protective medical equipment. Moreover, food retailers reaching their maximum capacities for e-commerce, should try to leverage their store network to provide immediate capacity relief.

In parallel, this is the moment to develop a plan how to scale-up structurally and mature a true omni-channel proposition. Whilst today’s e-commerce hyper growth is driven by Corona regulations, it will likely turn out to be a structural accelerator of shifting demand from offline to online. This provides new growth opportunities for which online pure players are at pole position, just as SARS boosted Alibaba in 2003. Capturing these opportunities requires swift action (a topic we will discuss in our next blogpost). This can involve immediate decisions to prepare investment in mechanisation and capacity, in omni-channel IT integration and where possible leverage suppliers in the network.

4) Turn Corona crisis way of working into structurally more efficiency and responsiveness

Due to the Corona outbreak related governmental measures, people are working from home as much as possible. This requires virtual team collaboration with distributed team members, which was new to many of us. Meanwhile, a lot of retailers are already used to digital collaboration tools such as Microsoft Teams to work together from a distance. It starts to demonstrate core retail processes can be operated with greater efficiency, by fewer and less long meetings with only the minimum amount of people involved.

As a result, we see some immediate implications for retailers. Most retailers by now have re-prioritized and shortened the often very long list of projects that hostage the organization. Now it is time to establish a separate digital project innovation workstream, focused on a very small set of active projects. Think of 5 to 10 for the entire business. As there is an immediate need to deliver these projects within days or weeks rather than months or years, a digital factory has to be established. A combination of low-code software and data analytics is very well suited to cut through these project lead-times and deliver business relief quickly.

Moreover, in running the day to day business, we see an opportunity to use the Corona crisis to overcome traditional HQ functional silo’s and make a structural shift to virtual teams. Through digital collaboration, operating with suppliers in a well-integrated way (and directly on board) is finally possible as well. Making this work requires new dashboards to be created instantly whilst establishing a (new) well-working workflow for core processes like assortment changes, promotion processes and supply-chain planning and replenishment.

5) Last but not least, put people first and keep communicating

With Corona still not at its peak, the health situation of staff is a growing concern. Most obvious, it is important to facilitate frontline staff who are constantly in contact with a lot of different customers, and to optimally protect them against the contamination hazard. Next to that, pressure is high on staff working in the supply chain, with absenteeism expected to increase over the near term. Even at headquarters, where employee tasks seem to be more easily executed from home, concerns are high; if not about one’s own safety then about the safety of others. Day-by-day new insights arise, making it an uncertain time for all of us which should not be underestimated.

A lot of retailers are already taking actions to protect, inform and involve their people. Only if necessary, people work from the office where teams are mostly being split up in several work shifts to prevent spreading of the virus between them. Furthermore, CEO’s provide daily communication about the most recent developments and decisions made. Finally, in a growing number of cases, non-food shops are voluntarily closed to protect their staff. At some retailers, we see rigorous and detailed staff contingency planning to ensure continuity of all aspects of the business. All examples of difficult decisions or time investments to make, but ones that will not be forgotten.

Putting people first is the right thing to do, now more than ever. Customers will remember decisions companies make during this crisis and the effort they put in to deliver goods and services to the best of their possibilities. Being seen to put people first and communicate frequently will create a positive relationship between companies and their customers as well their employees, with long-lasting benefits after the crisis.

Interested in the implications of above imperatives in your organization? Please let us know!

 

Robert Spieker
Partner at IG&H
E: robert.spieker@igh.com T: +31622791962

Maarten Vaessen
Partner at IG&H
E: maarten.vaessen@igh.com T: +31653571666

Author:  Myrthe van Hoek (myrthe.vanhoek@igh.com)

 

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Dutch retailers still rated higher than Amazon and Alibaba

By IGH, News, Retail, Retail

Coolblue has the best customer experience in the Netherlands, according to research by consultancy firm IG&H among 2000 consumers. De Bijenkorf and Bol.com follow second and third. It is surprising that there are no foreign retail chains in the top 5. “Web shops like Amazon and Alibaba do not yet understand the Dutch consumer”, is what retail experts Joris de Bruin and Evelien Kip of IG&H tell us.

“According to the survey, web shops such as Amazon and Alibaba, which are considered the biggest competitors to Dutch shops, do not yet meet the customers’ demands. They can be experienced as confusing and making a purchase often turns out to be unnecessarily complex. This is partly due to the fact of a perceived language gap, and not meeting the high standards Dutch customers have towards user-friendliness of online stores” retail expert De Bruin says.

Previous IG&H research showed that retailers with a relentless focus on personal attention, the right ambiance and inspiring the customer, are most appreciated. “Online, this is what is meant by a user-friendly, attractive website with decision making support. This must be aimed at providing the customer with the right information in order to make the best choice quickly and carefree. Coolblue does this exceptionally well: good filters, extensive product reviews and top-10 choice lists,” says De Bruin. The top 3 is complemented by Albert Heijn and de Bijenkorf, who inspire the customer and create a good atmosphere as well.

It is also worth mentioning that highly-valued web shops outperform the others by means of surprising customers. De Bruin mentions de Bijenkorf and Coolblue as an example. “de Bijenkorf packages all ordered products in a nice box and puts a bow around it for a premium shopping experience. Coolblue has a different approach and provides the packaging with some helpful tips or a dose of humor. It is this kind of small detail that positively surprises the customer. It surpasses customer expectations and that is crucial for a web shop to stand out in the market”.

“Consumer has high expectations for daily groceries”

It is surprising that the supermarkets score just as high as the middle- and high-end retailers on expectations. “Customers do not make a distinction between ‘daily shopping’ or more ‘incidental’ purchases. In both cases, customers remain to have high expectations”, says Kip. In terms of expectations, AH.nl is number 4 and Jumbo is number 6.

On the seventh place we have welcomed a foreign player: Amazon. “Customer expectations for foreign retail chains are not high. Alibaba in particular has a rather low score. Consumers still associate the brand with long lead times and affordable products. The hilarious videos on YouTube in which curious consumers are surprised with a bad buy only confirm that image”, she says.

“Customers expect little service from discount retailers”

Action is number ten, and a retailer operating in the discount, value-for-money segment. “We see the complete opposite as with the retailers from the more expensive segments; a good customer experience is not what the customer expects. The question is whether that is bad. One customer probably gave the best answer: “Action is only about offering the lowest price.” If they continue to meet their strong price proposition, it will not harm them. However, if the general customer expectations in the area of Customer Experience increase further, the question is whether retailers such as Action can adjust in time”, warns De Bruin.

Written by: Evelien Kip (Consultant Retail) and Joris de Bruijn (Manager Retail).
Photo: CoolBlue

Artificial Intelligence… Low-code… Public Cloud… Which technology trends should retailers bet on NOW?

By News, Retail, Technology

Technology trends are rapidly changing the retail sector. Retailers looking to remain relevant in the future must primarily focus on two developments: High Productivity Platforms and Artificial Intelligence. This became clear during an analysis by IG&H.

In contrast to other technology trends such as Internet of Things, blockchain or virtual reality, High Productivity Platforms and Artificial Intelligence (AI) have been identified by Gartner as trends that have reached a mature stage, which enables them to disrupt the retail sector. Both High Productivity Platforms and AI intervene in each link of the retail chain, giving them a new dimension. That’s why IG&H believes that retailers who embrace these developments now greatly increase their chances to remain a frontrunner in their market.

 

High Productivity Platforms; react more quickly to developments

A High Productivity Platform can be based on generating code, as well as on model-driven execution. Low-code, for example, is an increasingly well known High Productivity Platform for software development based on object generated code.

The main business advantage of this technology is the ability to build new functionality quicker and at substantially lower cost, and the success of ideas can be evaluated more rapidly. One method of doing so is ‘rapid prototyping’. Retailers who adopt this trend are able to test new propositions quickly in changing market conditions and with little risk. A striking example is a leading food discounter which temporarily offers a more extensive luxury assortment through an online channel during the holidays. The technology offers countless applications; from small mobile apps to large back-end systems. Because of this, High Productivity Platforms are suitable for medium sized businesses as well as larger multinationals.

The accelerated development of applications shortens the time-to-market with 70 per cent in comparison to traditional packages. This is especially interesting when the development of applications requires customization. In comparison to traditional solutions, total cost of ownership is reduced to a third, a recent study by Gartner found. Next to development time, High Productivity Platforms offer big advantages when it comes to operational controllability in terms of ease of integration, altering applications, and the assurance that applications keep working after the update. All of this against lower maintenance costs.

Boost business with Artificial Intelligence

Data science is a multidisciplinary domain for more effective data gathering and analysis to facilitate better business decisions. Different techniques and algorithms can be applied, such as Machine Learning and AI. Deep Learning, an AI algorithm, is an advanced follow-up technique based on neural networks. Both Machine Learning and AI algorithms are often self-learning, which improves the effectiveness of applications over time and means the complex underlying mechanisms don’t have to be fully understood.

In the current retail landscape, we are increasingly seeing applications supported by AI and Machine Learning. There are ample examples of AI being applied in the chain, from bots in customer service with active customer dialogue, to creating supply chain flow by proactively sending goods to locations even before consumers made their purchase.

Even at the heart of retail, category management, we see AI making a difference with better integral business control. AI can, in contrast to error-prone and often department-coordinated traditional ways of working, make an accurate prediction of sales based on numerous chain factors, leading to better purchasing decisions. Our experience tells us that this prediction is accepted in up to 90% of the cases, leading to higher shelf availability and lower residual stock, in combination with higher efficiency at the department concerned.

In the fashion industry, for example, algorithms are being utilized to predict trends earlier and more precise. With Machine Learning, this enables offering personal discounts to the customer. Through enhanced customer personalization higher conversion ratios can be achieved and purchasing can be done more accurately. This results in lower residual stocks. The urgency is confirmed by the expectation that by 2020 more than 85% of retail transactions will be based on AI.

Dawn of exponential technological developments

Exactly the same reality holds true for us as consultancy. We see that our customers have a need for support with a large number of technologies and trends. To meet this need, our firm has more than doubled in size the last few years in the domains of Analytics and Technology.

The current and expected trends make us realize that we are at the dawn of exponential technological developments. To remain relevant and flexible as a retailer it is crucial to make the right choices. AI… Low-code… Public Cloud… On which technology trend will you bet?

Written by: Iris Huisman (Analist Retail), Michiel van der Werf (Consultant Retail), Sjoerd Norden (Consultant Retail) and Bram Gilliam (Director Retail)

Ruud Schoenmakers new IG&H partner within retail practice

By News, Retail

IG&H expands the retail branch of the company with Ruud Schoenmakers as new partner. Schoenmakers joined IG&H as a consultant in 2005. Since then, he has served both national and international customers in the areas of retail, trade, logistics and financial services.

IG&H is a leading player in business transformations, where new platform technology plays an accelerating role. “Our approach is distinctive because sector experts and experts in the field of technology, data science and organisational transformation work together intensively. I really believe in that. That is why I’d like to join IG&H as a partner for a long time. By combining different competencies, strategy becomes reality and we can help our customers make a difference for their own customers,” Schoenmakers says.

The new partner is mainly involved in the changing digital retail market. In recent years he has developed innovative concepts in several areas, including smart pricing, last mile delivery, new business ventures and agile business transformations. As a sector expert he is also involved in converting traditional IT environments into high performance platforms, making customers more innovative, agile and keeping costs relevant.

Although the head office of IG&H is located in the Netherlands, Schoenmakers has gained a lot of experience abroad. He has worked in England, Poland, France, Belgium, Germany and America, among other countries.

“Ruud has proven to be able to complete major change processes for international customers. He has really helped leading retailers reach a higher level in times of disruption. This allowed them to innovate faster and respond better to customer demand. In recent years Ruud has proven to be a true IG&H person; he looks at the facts and at the same time knows how to create energy in the organisation”, says managing partner Jan van Hasenbroek.

Improve inventory management Wehkamp

By Casestudys, Retail

What did the customer want:

wehkamp.nl encountered challenges in reducing working capital and stock levels while the availability of products remained unchanged. The aim was to improve internal processes and prevent unnecessary investments in distribution networks.

We took into account the following context:

  • Availability on the following day is extremely important for the business model.
  • Mixed procurement NW Europe versus Eurasia.
  • Physical limitations in the network, demanding non-profitable investments if they were not averted.

What was our approach?

  • Short quick scan and design phase to determine approach and improvement potential.
  • Agile, hands-on approach that is result oriented, and in collaboration with management and employees.
  • Weekly stand-ups with direct feedback on improving the results.
  • Focus on the largest suppliers to provide (short-term) evidence for this way of working.
  • We supported teams with data analysis to improve decision making.
  • Multiple preconditions for improving the sustainability of the solution (KPIs and incentives, organisation design, management style, supplier management, etc.)

What have we achieved?

  • In just 3 months, time stocks and working capital were reduced to 25%, the stock turns improved to 60%. The lost sales and operating costs remained unchanged.
  • The incoming receiving capacity in the distribution center improved by 35%.
  • Development of supplier performance monitor.
  • Improved collaboration between sales and operations.

What did the customer think:

“Refreshing, practical approach, with clear results. An advisor who does not only do what the client organisation wants to achieve, and thereby finds a whole new angle of approach.”

Step change in product availability Intertoys

By Casestudys, Retail

What did the customer want:

Intertoys had to contend with poor product availability, which led to a significant loss of sales. The aim was to increase the availability of DC stock from around 50% to over 80%. The company wanted to achieve this before the start of the high season in the autumn, without increasing the total inventory levels.

What was our approach?

  • Intertoys’ assortment, together with the category management team, validated and sorted in order to identify a regularly refillable assortment.
  • Along two tracks – data quality and merchandise planning – we developed quick wins and a sustainable improvement of tools and processes to complement the right assortment with the right stock levels.
  • Development of a commercial approach to sell surplus stocks at minimum price discounts.
  • Merchandising planners trained in their new roles.

What have we achieved?

  • Availability of the DC stock rose from around 50% to over 80% over a period of about three months.
  • Increased data quality to enable a more streamlined operation.

What did the customer think:

“In a dynamic retail context, we wanted to improve the availability of the DC stock and to develop a reliable replenishment process. The IG&H approach helped us to combine quick wins with sustainable improvements in product availability and stock levels. IG&H provided the right structure and transparency for our activities through the implementation of every step of the project “

Optimalisation of a distribution centre for a large Dutch retailer

By Casestudys, Retail

What did the customer want?

For a large Dutch retailer, the DC (distribution center) is essential. Keeping logistics costs manageable guarantees competitive prices, happy customers, and a competitive position. Our customer’s current DC is no longer sufficient, but which products will we put in the new DC, and how, and why? For the best results, we will make these decisions based on hard facts and data so that we can optimally focus on the DC.

What was our approach?

A dynamic model that determines the optimal allocation in real time, for every situation. We have built an advanced Linear Program that optimally allocates all SKUs within the DC. This optimum is determined on the basis of costs (hourly wages & productivity, return percentages, turnover rate, etc.) but also, for example, capacity and the characteristics of the SKUs. All input is fully customisable so that infinite scenarios can be compared.

What have we achieved?

On the basis of the most recent data and desired adjustments, S & OP can optimally set up the DC. S & OP not only has the tools to optimise the current situation, but can also use it for future changes. Capacity problems are already clear in advance because predictions, in combination with the tool, can determine the ideal DC of the future.

What did the customer think?

Practical logistics experts. Good balance between concepts and practical applications.

Strategic frameworks for structural renewal of the product range for non-food retailer Blokker

By Casestudys, Retail

What were the client’s needs:

Clear strategic framework for a structural implementation of a new product range:

  • Addressing the customers’ needs by a structural review of the current product ranges and by adding products that are lacking.
  • Improving the price perception of the customers by rolling out a clear price strategy based on dynamic prices.
  • Expansion of the own brand product range for an attractive margin, realising the quality promise, and giving a price signal to the market.

What was our approach?

  • Design and execution of a category briefing process for a structural review of product ranges based on reviewed category roles and a uniform structure of the customer decision tree.
  • Setting up a process for the identification, assessment, and execution of product ranges that are lacking.
  • Creating a clear and dynamic price strategy which has been further developed into price guidelines that can be implemented for every established price category.
  • Optimising the own brand policy, established at product group level with clear guidelines for the implementation of the private label product range.

What did we achieve?

  • Demonstrated and structural category briefing process in which strategy, format, category, management, and shop experience are all combined to develop a clear renewal of the product range.
  • Clear price strategy that can be implemented, structured up to SKU level
    Optimised private label policy which gives direction for the implementation of the own brand product range.

Omnichannel distribution network design Blokker

By Casestudys, Retail

What were the client’s needs:

Due to crucial organisational changes, increasing online sales volumes, and continuous developments in the commercial propositions and product range, there was an apparent need to restructure the distribution network in order to:

  • Accelerate the desired commercial proposition.
  • Support the omnichannel fulfilment ambition (for example with entirely interchangeable online/offline distribution channels, shop pick-up, shops storage).
  • Improve the efficiency, costs, and capacity of the distribution centre.

What was our approach?

  • In collaboration with the management, we established the scale of the commercial proposition in order to facilitate it by deploying the new distribution network (e.g. the number of SKUs, channel mix, product features).
  • Development of a growth model for logistic volumes
    Assessment of the current distribution structure, identification of problems/bottlenecks, and the execution of a fit-gap analysis with the growth model.
  • Development of future warehouse layout, automation options, detailed processes, and IT/WMS requirements.
  • Development of the business cases for every scenario, including the required investments and reduction of costs.
  • Facilitating boardroom decisions.

What did we achieve?

  • We developed a solid omnichannel concept for the distribution centre where inbound, storage, and picking activities for online and offline flows are integrated and supported by automated processes.
  • Substantial cost reduction of 18-20% on the total distribution costs.
  • The distribution centre has been structured in such a way that it will not just facilitate the current commercial ambitions but also those in the future.

What was the client’s experience:

“IG&H pools thorough logistic expertise and combines this with a pragmatic approach for an effective decision forming process based on facts.”