On June 12 and 13, the EHI Retail Institute hosted the Omnichannel Days, where retailers, manufacturers and service providers shared their experiences of integrating stationary and digital business for the seventh time. With the event location "Die Halle Tor 2" in the west of Cologne, the research institute had chosen an extremely suitable setting for this exchange of opinions.

After all, there is probably no setting that better reflects the balancing act between the glorious past and the new challenges that trade is currently facing than the purist industrial charm of rusty steel and cracked concrete in the old factory building. Arrested in the past, the numerous speakers of the EHI Omnichannel Days did not present themselves at all. Rather, they showed numerous practice-oriented ways in which successful trade can still be possible in the era of the GAFA economy. A few impressions and notes of selected lectures I would like to present in this article.

 

 

Topic Complex I: Innovations in the Omnichannel Business

"Omnichannel of Innovation - Concepts in Collaboration with Start-ups"

In view of the dynamics in the trade, which were primarily driven by the GAFA companies, Tim Ole Jöhnk gave the opening speech, which was logical, as he lives and works door to door with the GAFA companies. With his Sunnyvale-based employer Plug and Play, Jöhnk specializes in networking innovative Silicon Valley start-ups with established companies.

  • Innovation needs openness. After all - even in retail - everyone is in the same boat and working on the same challenges.
  • Plug and Play therefore initiates industry-specific innovation platforms in which companies can exchange information on these challenges.
  • Within these platforms, startups can apply and introduce themselves. The partner companies select the best concepts, which Plug and Play then supports.
  • Objective: Startup can concentrate on its idea and validate it together with its partners.
  • Example of best practice: Europe's first cashless electronics store in Innsbruck -> Cooperation between Saturn and the startup Mishipay initiated via the Innovation Platform

"The Age of Assistant - How Interactive Technologies are Revolutionizing Commerce"

Shortly afterwards, Martin Wild, CIO at MediaMarktSaturn, also discussed the experiment in Innsbruck.

  • The insight from the concrete project: cashless markets still irritate customers, but from Wild's point of view they are still the future.
  • For this reason, cashless payment is to be integrated into existing Saturn stores in the near future.
  • Saturn has ignored digitization for a long time, but now wants to orient itself to the American culture of innovation. (Experimentation - sometimes failure - learning)

In the same talk, Christian Bärwind, Industry Leader Retail - Strategic Partnerships at Google Germany, also gave an insight into the changes in customer behavior to which retailers must respond.

  • Customers today have access to countless pieces of information, but have become more impatient at the same time.
  • The customer therefore needs support in coping with the flood of information.
  • Personalization and assistance systems can help here.

"Conversational commerce, chatbots and voice assistants - what does the future hold for shopping?"

Antonia Ermacora, co-founder and CEO of ChatShopper, who has developed "Emma", a chatbot that specializes in product searches in the fashion sector, has already provided an insight into the work on such assistance systems.

  • Focusing on a specific requirement is central to the development of a bots. Otherwise, the danger of getting bogged down is great.
  • Product search using a chatbot over Decision Trees does not work from Ermacora's point of view. These are becoming too complex. Natural Language Understanding (NLU) is also a problem.
  • Therefore ChatShopper tries to develop a self-learning system. Data is required for this. However, data quality and quantity are the biggest problems.
  • ChatShopper therefore makes a lot of effort in labelling the products. Based on the product images, the crowd can assign tags to the products so that the database for the chatbot becomes larger.

 

Topic II: Practical Experience from Omnichannel Transformation Projects

A central part of the lecture program were reports of experiences in which decision-makers from various retailers reported on their change processes in the direction of Omnichannel.

"'Classic' meets 'Young&Wild' - how a classic stationary retailer successfully implements an e-commerce project"

In their talk, Oliver Oliver Breitfeld, Head of E-Commerce, and Andreas Iken, Head of Information Management, reported on how they launched an e-commerce project within the grown structures of their employer dodenhof.

  • dodenhof is a late adopter with regard to online trading. For a long time, IT was only considered a cost factor. Therefore, the lead of the competition must now be made up. Speed of implementation is therefore of the utmost importance.
  • The company had an old and complex system landscape, which first had to be modernized. In addition, three very different business models (furniture, fashion, technology) with individual requirements are united under the dodenhof roof.
  • First milestone: Creation of a stable ERP foundation that integrates the commonalities of the three business models. For this purpose, a template-based approach was chosen in which the scope was largely known. -> Focus on plannability
  • Second milestone: A more agile approach to the e-commerce project based on the integrated ERP. -> Focus on quality
  • The result is a stable foundation with flexible interfaces. The hybrid project approach proves to be suitable for dodenhof within this project.

"From Platform to Omnichannel."

While dodenhof had to discover the digital world for itself as a stationary retailer, Christian Pietsch, Managing Director of Gusti Leder, took the opposite path. Started as an Amazon dealer, he has been pursuing an Omnichannel concept for some time now.

  • Sales via Amazon and other platforms are becoming increasingly difficult: good rankings have to be paid for more and more frequently. In addition, Asian dealers who do not pay sales tax are flooding the marketplaces. In addition, more and more manufacturers are also entering the direct sales market.
  • Possible solution to this problem: brand building, e.g. through unique concepts, viral marketing or offline strategy (incl. added value for the customer).
  • Gusti Leder has recently opened nine branches. The entertainment factor is also taken into account here: customers can do handicrafts free of charge with leather generated from returns. Goal: Don't open stores the way stationary merchants would.
  • Conclusion: There is still room in the niche in this way.

"An all-round successful shopping experience with marketplace and grocery shop."

In an interview with moderator Lutz Spannuth and EHI expert Lars Hofacker, real.digital managing director Dr. Gerald Schönbucher then reported on the digital activities of the retail group.

  • 2016: Takeover of the Hitmeister marketplace by real. Schönbucher was at that time managing director of Hitmeister.
  • Hitmeister brought the marketplace technology and dealers as well as the start-up culture into this connection. real had the stationary business and a strong brand to offer.
  • It was important from Schönbuchers point of view that Hitmeister was not completely pressed into the existing IT systems at real. Instead, links were only created where it made sense (for example, in merchandise management).
  • It was also important not to play the teams off against each other. Instead, attempts were made to combine the best of both worlds.
  • Now, in real terms, it would like to try to position itself in the market through hard (broad range, good prices, convenience) and soft factors (proximity, humanity, goodwill).

"Omnichannel Services at Brax."

On the second day of the event, Marc Freyberg, Head of Marketing & E-Commerce at the East Westphalian apparel manufacturer Brax, described how the omnichannel topic presents itself from the point of view of a manufacturer.

  • Brax has its own sales channels (stores, online shop, outlet) as well as retail partners.
  • Brax plays the entire range of Omnichannel offerings (Click & Collect, Reserve & Collect, Instore Return, Instore Order) in its own sales channels.
  • Instore Order is the most exciting thing for Brax. This service offers sellers the opportunity to significantly reduce the number of customers who do not buy anything due to missing goods.
  • Reserve & Collect also offers possibilities. The customer's shopping basket can possibly be enlarged during the sales talk.
  • In addition, the external trading partners should also be enabled, e.g. by providing interfaces that enable virtual shelf extensions.
  • Brax's credo: It doesn't matter where your own products are sold. The main thing is to sell them.

 

Topic III: E-Food

The organizers of the Omnichannel Days also gave the online food trade a lot of space. In addition to the already mentioned competitor real.digital, Picnic, Flaschenpost and myEnso were also allowed to present their concepts.

"When the milkman rings"

The concept of the Dutch online supermarket Picnic has already been frequently discussed in recent months. In his lecture, co-founder Frederic Knaudt once again promoted the advantages of the business model.

  • The traditional milkman is the model of the Picnic model.
  • Customers can order food until 10 pm. Picnic then orders the ordered goods in exact quantities from its suppliers. A large warehouse is therefore not necessary. Waste is reduced.
  • Based on the orders, a fixed route is planned for the next day. In this way Picnic can reduce the delivery slot to 20 minutes. The customer therefore only has to be available for a short period of time for delivery.
  • Due to the cost savings (no supermarkets, no garbage, efficient route planning) Picnic can also offer a free delivery.

"An innovative beverage delivery service delivers within 120 minutes only."

Dieter Büchl and his company Flaschenpost, on the other hand, have specialised in the exclusive supply of beverages. In an interview with Lutz Spannuth, he talked about the peculiarities of this complex business model.

  • Message in a bottle promises its customers free delivery within 120 minutes.
  • Drinks are thus ordered "on demand". This is why it hardly ever happens that the courier drivers do not meet the customer. This saves costs.
  • For route planning, Büchl has developed algorithms that calculate as accurately as possible the point in time when a driver has to drive off in order to meet the 120 minutes. The aim is for the driver to be able to transport as much goods as possible on his route.
  • The "on-demand" concept consequently means that customers can only order drinks from 9 am to 9 pm.
  • The focus on beverages has also been a unique selling proposition in Germany to date. This addresses a product group whose purchase is no fun in stationary retail.
  • The salaried drivers also know what to expect as beverage suppliers. The customers thus do not reap any "nasty looks" from the courier driver when they have heavy beverage crates delivered to them. This is not always guaranteed by other e-food suppliers and reduces the customer's inhibition threshold.

"Customer Centricity - A Small Revolution in the E-Commerce Supermarket"

In the concluding presentation of the EHI Omnichannel Days, Norbert Hegmann, founder and CEO of myEnso, presented his concept of an online supermarket.

  • myEnso is committed to consistent customer centricity. The customers can actively participate in shaping the offer, make decisions and can even become partners. The company expects a special loyalty from this.
  • For example, customers can contribute ideas for new features and product listing. The community decides afterwards.
  • In this way, for example, functionalities such as the navigation wheel, which is intended to imitate the roaming gaze of the customer in front of the supermarket shelf, have already been created.
  • Customers can also make suggestions for new business models, such as supplying customers in nursing homes.
  • For this form of customer participation, myEnso cooperates with the market research company Kantar TNS. To date, 1.5 million euros have already been invested in market research.

In addition to these thematic contributions, the polarizing lecture by Spryker founder and Kassenzone operator Alexander Graf at the end of the first day of the event provided discussion material. Under the motto "Innovate or Die", he drew an extremely challenging future scenario for the retail trade.

  • The trading of products generates less and less contribution margin. Margin-based business models are therefore coming under increasing pressure.
  • Simply growing is not enough. Amazon is growing by 10 to 15 million US dollars per day in Germany alone. Provocatively speaking, a small inner city dies every day.
  • Linear strategies (such as omnichannel, stationary upgrading or cultural change) are doomed to failure from Graf's point of view because they have neither customer orientation nor dynamics.
  • In today's dynamic world, advance planning is as worthless as accumulated knowledge, as framework conditions can literally change on a daily basis.
  • With this paradigm shift, however, large organisations in particular, which stand for plannability and empirical knowledge, have considerable problems.

 

Possible strategies:

  1. You have to be able to learn to forget and replace meticulous planning with quickly implementable Test & Learn.
  2. Customer access is of central importance. This must be secured.
  3. Technology must not only be seen as a means to an end, but must also become a business tool.