We talked to Joakim about some challenges digitalisation poses for retailers.
- Is Digitalization the Solution for retailers? “Digitalization is a key driver in our everyday life and affects retailers in multiple dimensions, but we must also remember that the fundamentals for being successful in retail are still the same independent of the channel. Retailers must understand their customers and provide a range and an experience that is adapted to their customers’ expectations, and they must have efficient operations in all their processes from supply to the store operations.”
- What is your recommendation to retailers? “In today’s omni-channel environment several cost elements have increased; increased marketing spend, increased need for customer support 24/7, new technical solutions to manage web/mobile/social media, new demands on the supply chain and the need to manage customer picking vs store delivery, expensive distribution solutions and changes in the store footprint. The main challenge is that very few cost elements have been reduced and the larger the share of the digital channel the more challenging it gets to manage the profitability.
I would recommend retailers to not just focus on the digital growth agenda, but put a strong focus on the operational elements and aggressively secure a sustainable cost structure to reach the needed profit levels when digital channels increase in importance.”
- How have you recently had an impact that mattered to a client? “We helped a client to develop a new strategy for better managing the scale in the business and a clear strategy on their cost to serve. The project resulted in a new operational model, lower operational cost and a clear cost to serve model for the different channels.”