LEGENDS & REBELS
Mastering the Art of Digital Breakthrough
The “Retail Summit – Port of Thoughts” that took place for the fourth time in Hamburg on September 29, 2016 has become an institution. The topic this year: How can the digital breakthrough succeed and what can “old foxes” and the “young savages” learn from each other?
Manage the digital breakthrough in retail
The 4th “Retail Summit – Port of Thoughts. Legends & Rebels. Mastering the Art of Digital Breakthrough” took place in Hamburg on September 29, 2016. Speakers – well-known entrepreneurs, academics and trend researchers – and more than 350 representatives of the retail industry discussed the opportunities and challenges of digitization.
This year the question was: How can the digital breakthrough succeed sustainably given the fundamentally different circumstances? And what can the various players, established businesses and young start-ups, learn from each other? The event was hosted by the media companies Eversfrank Group, Comosoft GmbH (a specialist in database software media products) as well as Ebner Stolz.
EXCELLENT SPEAKER 2016
The bricks-and-mortar trade needs to reinvent itself
“The future of German trade will be app based and mobile,” stated Prof. Dr. Gerrit Heinemann from the University of Applied Sciences Niederrhein in the introduction to his presentation. Almost 80% of all Germans go online today to compare prices, research availability or to read other customer recommendations. Yet, as Prof. Heinemann found, this development is still frequently ignored or even rejected. Prof. Heinemann further warned that the multi-channel customer is even sometimes seen as robbing retailers of valuable time by requesting support without then making a purchase. As he sees it, what is urgently needed is a “new offline”, a “smart shop” in which app-based online retail business is the benchmark.
According the Christoph Wöhlke from Budnikowsky, the online pharmacy and drugstore site, it’s all about true client centricity and no longer about customer orientation. The FMCG market is one that is hotly contested, its assortment is interchangeable. As Mr. Wöhlke sees it, only those who adopt a strategy of customer centricity will survive. He mentioned two Best Practice examples that could not be more different: his greengrocer who greets his customers by name and fulfills their every wish – from the procuring of a special product to free delivery to the home. And Amazon that uses a complex technical infrastructure to address and provide services for the specific customer. The road Budnikowsky would take: decentralization in urban microlocations and a location-specific customer approach.
Ina Dittmann from Hawesko agreed, stating that only through addressing customers directly is it possible to differentiate offerings from the competition in all-channel business. Her advice: the dealer, specifically the online retailer, must again assume the role of a specialist supplier. Because a perfect product or punctual delivery is no longer enough to satisfy the customer. Customers want intensive advice and support.
Direct targeting and marketing instead of the scattergun approach
Given the flood of online newsletters and banners that are often perceived as a disrupting nuisance, businesses have to consider taking a different approach if they truly wish to reach their customers, according to Gerhard Märtterer from the Eversfrank Group, a participant in the podium discussion together with Uwe Büning, GMC Software Technology, and Martin Voigt of Xeikon. Instead of serving all channels in the same way and spreading resources too thinly, he recommended synchronizing the different channels and specific targeting. It should then be possible to raise the conversion rate by simply using realtime advertising. For example: 48 hours after cancelling an online purchase, the customer receives a web response postcard that provides a new prompt based on individual information from his last search.
Dino Scheidt from Shopkick also recommended addressing customers individually. A good feeling and a functioning product – emotion and function – no longer suffice for customers. The customer of today also wants to participate. This is precisely where businesses could start, e.g. with localized incentive marketing, e.g. in which stationary retailers offer premiums, coupons or timed limited discounts through mobile realtime applications as a true virtual omnichannel offering. This could be also be nothing more than entering a store briefly and scanning a product. According to Dino Scheidt: “We not only provide customers with information. We mobilize, reward, and inspire them.”
From property economy to experience economy
Alexander Salzer of Liganova also stated that in a world in which the importance of products and brands is shifting, experience is becoming a central concept. He sees attitude replacing status and a definite decline in brand loyalty. In the end, he says, it is always about the seamless multi-channel consumer experience. It is this which is the decisive KPI which in opinion needs to be measured and optimized.
Predictive analytics – knowing what the customer is asking for
Otto, a company best known for its mail order business, now turns over 90 percent of its business volume online, according to Michael Sinn, Director Category Support for the Otto Group. He has found that by using a learning analysis and forecast tool that Otto can precisely predict demand. This not only reduces stock holdings, it also improves truck availability to over 80 percent and also cuts delivery times from an average of seven days to two. It also lowers the rate of return and, combined with dynamic pricing, has led to a double-digit increase in sales. Otto Group Media has specialized entirely in user-based marketing. CEO Torsten Ahlers explained how campaigns are developed for specific target groups and are placed, for example, through synchronization with social media, as POS or as package inserts.
IT compliance is fundamental
When it comes to data, the topic of security is never far away. Holger Klindworth, the responsible partner for the IT division at Ebner Stolz, revealed how important data are in the age of the internet of things, of mobile payment options and Big Data. Using RFID chips, goods can already be identified and tracked without contact. For businesses that rely on customer data, the correct handling of data, IT Compliance, is becoming ever more important. Holger Klindworth summarized the situation, saying: “Only those businesses that successfully reconcile speed, quality and compliance in the digitization process will be able to compete on the market.”
“Fail fast, fail often” – the culture of failure
Keynote speaker Ian K. Karan, entrepreneur and retired Senator for Economy and Labour for the City of Hamburg, spoke about “Lessons Learned from Rags-to-Riches” recollecting the highlights and low points of his career in business. As he sees it, it is possible to learn more from failure than from success. He stated: “My success is a sum of all my failures,” and recommended: “Fail fast, fail often.” He would wish for an environment in Germany that is more welcoming to entrepreneurs and that also includes failure. This is the only way that more young people would have the courage to found their own company.
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