The 3 priorities of retailers and brands

The 3 priorities of retailers and brands

12 Nov 2020

Author:Cédric Ducrocq, Diamart Group

Being retail consultants gives us the chance to understand what retailers have in mind: the questions our clients ask us says a lot about their priorities.Here at Diamart (Ebeltoft France), 3 types of projects seem to dominate:

  • Digital transition: if the goal remains the same, retailers all want to strongly accelerate their transformation. During lockdowns, they have been able to establish new practices (such as contactless click & collect, ship from store, …) in a very short time. Emergency breaks the rule. As a consequence, CEO’s feel confident that they CAN change much faster, and that store teams will follow. Our new company, Diamart Now, is shaped to answer those needs: accelerate digital projects.
  • Recovery: many retailers struggle, facing tough times. Helping them to convince bankers or to build survival plans is not that exciting, but we are proud to help companies navigate through this storm.
  • Business models transformation projects: This third type of project deserves a few comments. From a financial point of view, some retailers have not suffered that much from the crisis (food sector, DIY, etc.). They have the resources to think about their long-term strategy and consider that their "usual" process of continuous improvement will not be sufficient. They need deeper changes.

This is actually not really about “innovation”, but about achieving a fast and deep transformation towards a profitable omnichannel model. Here are 3 examples of questions many retailers have in mind:

  • Omnicanality profitability: if the weight of your online turnover would jump to 50% instead of 10%, what impact will this have on your profitability? If this is more of a problem than good news, then it's time to address the question! You have to stop undergoing the omnicanal transformation and turn it into a value-creating ambition.
  • Stores network: How many stores do you need to keep? Under which format? We all keep saying that the physical network is your best chance. Actually, it is more certainly your main fix cost… How to turn it into a strength? Do you need larger stores providing exciting experiences? Or less expensive stores allowing you to keep hundreds of them?
  • As we all claim that human relationship will be the key, how to combine this evidence with the huge gains in terms of costs and efficiency that automation can bring?

The depth of this transformation requires massive capex reallocations. The rule is easy to formulate and tough to execute: improve your efficiency on daily costs… and invest massively on transformation!