[Expert Interview] “What are the Essentials of OmniChannel Strategy?” by Jean-François Kleinpoort of Dia-Mart Consulting

 

JF Kleinpoort

Jean-François Kleinpoort, Cross-Channel Director of Dia-Mart Consulting


Jean-François, please tell us about Dia-Mart Consulting.

Dia-Mart Group is a 100% retail group and a member of Ebeltoft Group which is the network of international retail experts.

Our group consists of three companies merged together as Dia-Mart Group:

1. Dai-Mart: Consulting group for large retail chains helping retailers and brands develop their marketing, organisational and digital strategies for the last 20 years.
Clients: Carrefour, Akzo Nobel, E.Leclerc, FNAC, Système U, Crédit Agricole, Manor, Quick, and many more.

 

2. Dia-Mart in situ: We work with retailers to find solutions on visual merchandising and in-store commercial efficiency issues.
Clients: L’Etoile, Halle aux Chaussures, Crédit Agricole, Go Sport, and many more.

3. Côté Clients: We help retailers carry out ad hoc quantitative and qualitative studies and customer surveys to be able to know their customer needs and find effective solutions.
Clients: Auchan, Casino, E.Leclerc, Monoprix, Etam, Beauty Success, Décathlon, Fnac, Kiabi, Castorama, Boulanger, and many others.

 

What are the challenges that retailers face with regards to omnichannel retailing?

Order management system is very complex for retail chains having 50-300 stores, plus several warehouse facilities and distribution centers spread out across the country. Then, we add up the e-commerce site delivering products to customers around France.

Some of the sites are still using very old information technology (IT) infrastructure and platforms. To integrate all these different platforms as one (omnichannel), it could take several years, even at the end of 10 years, the IT integration is still in process. e-Commerce technology changes at a very fast rate so it is a permanent evolution and update of IT platforms.

Since the process is very long and involves some 50-300 stores, investment cost could be between 1-10 million euros, thus long term ROI is inevitable.

 

IT platform consists of?

Front office system refers to functions involving customer interaction. For example, cash register or self-checkout counters. Back office system deals with order management, inventory, product supply, finance, etc. Middle office system interacts and coordinates with front and back office systems.

 

What are the essentials for retailers to be OmniChannel?

We propose to retailers three elements that are essential in omni-channel:

1. The retailer must collect and integrate all information about the clients from all distributors in one database system.

2. The retailer must integrate all product references and technical specifications between physical stores and e-commerce site. There must be only one reference for each product and a content-rich site shared across all channels.

3. The retailer must adopt a transversal organisation since implementing an omnichannel strategy involves “everyone” working across the company. The retailer must break down traditional silos, and replace them with tightly integrated structures that encompass internal processes, human resources, technology and organisation strategy.

 

How do you work out the strategy with retailers?

First of all, we spend the first 3-4 months discussing with the Managing Director, Management Committee members and Department Heads to know their objectives and end-results they want to see. Then, we carry out quantitative and qualitative studies, customer surveys, competitor analysis, and benchmark study of the international market.

When we have the data, we set up brainstorming workshops with our clients to work with them in finding solutions, and redefining their objectives based on the research study.

We then propose a roadmap that integrates tactical action plans with ROI from 3 to 6 months and development of several projects structuring medium- and long-term objectives.

We present a business plan with 3-month, 6-month, 1-year, 2-year, 5-year roadmap, ROI plan and a list of service providers who develop each omnichannel solution and capability.

Our service ends at management, marketing and strategy consulting. The retailer will deal directly with the service providers we recommended to develop and implement their project.

 

What is the investment and ROI like for these projects?

For specialty retailers such as Leroy Merlin, Decathlon, Darty, Boulanger, or Brico Marché, to do their entire e-commerce site (front and middle office), investment is between 1-2 million euros. We try to obtain the ROI in 2-3 years.

However, to revise the back office (i.e. Oracle, SAP) and integrate customer and product database from all distributors and e-commerce site across the country with the order management system, investment could be 10-15 million euros with IT platform development for 4-5 years. ROI in this case is long term.

As I’ve mentioned earlier, these are the challenges of retail chains. There are still huge retail chains in France with an annual turnover of 1 billion euros, and yet with no e-commerce site.

 

Which one to use for in-store POS? Kiosk or Tablet?

There is no “one” solution that fits all. It depends on the ambition, objective and strategy of the retailer. There are two types of objectives:

  1. Develop brand reputation as high-tech, innovative and original, as well as create viral buzz.
  2. Increase sales turnover and obtain ROI.

The solutions for these 2 objectives are completely different. Installing kiosks in some 100 stores would certainly boost the image of the retailer but won’t necessarily have direct influence on sales unless the shopper buys products via the kiosk.

On the other hand, sales associates in some huge retailers are equipped with tablets. They use tablets to check availability of specific products, update customer information, order products that are out of stock, and deliver them directly to the customer’s address. In this case, the function of the tablet has direct influence on sales.

So, when we work with the retailer, we must know first their ambition and then we work out solutions.

 

Is customer’s shopping journey the same for General, Electronics, Fashion, or DIY retailers?

No, there are huge differences in each segment therefore, the omnichannel strategy must also vary. The shopping journey of the customer buying a pair of jeans is different from buying a DIY tool, a bathtub or home appliances. Definitely, we can’t apply one strategy for all.

 

What is the future of retail?

No-channel” retail and further way ahead “Commerce Ubiquitaire.

Dia-Mart & Ebeltoft Groups

What are the advantages of working with Dia-Mart Group?

Dia-Mart is a Group of retail experts who are very reactive to the needs of our clients. There’s no such hierarchical barrier unlike in large companies where a final decision has to go through approvals from several Directors.

We work in duo—a Project Director and a Consultant for each project. We work directly with the Managing Director, Management Committee and Department Heads concerned with such project.

Our team all has experience in retail operations therefore, we speak the same language as our clients and we understand well their daily problems and issues. We are therefore, more apt to provide them pertinent and pragmatic retail solutions.

 

Interviewer and author: Stephany Gochuico

 

 

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