Let's reinvent sales and marketing!
For the first event of the year, let’s start with a conference.
Being cordially invited by the SMA (Sales Management Association), I had the pleasure to attend their first meeting of 2015, welcoming Cédric Ducrocq, founder of the Dia-Mart Group as guest speaker.
In approximately an hour, Mr Ducrocq conducted a quick read of his last book “Inventer le commerce de demain” (Invent tomorrow’s retail business). As usual, it was worth to attend (also for the networking at the event).
The start of a new era
One of the fun things for a consultant is to announce the end of an era, and a total disruption. According to Mr Ducrocq, we are facing such a moment in retail.
The speaker gave a few examples of retailers who experienced some difficulties in the past years, and of others knowing an impressive growth (e.g. Zara, Leclercq…). He also qualifies the successful food retailers as being real UFO’s as these aren’t the type of retailers you might expect (e.g. Mercadona, Colruyt…).
In his book, Cédric Ducrocq takes a closer look at the signs of the disruption, illustrates them with numerous examples, and invites the reader to reinvent sales and marketing.
Seven trends which retailers must integrate tomorrow
Let’s take a look at the different trends retailers must take into consideration to adapt themselves to the disruption they are facing:
- Create desire: retailers shouldn’t solely answer needs. They must go further and create desire and envy. For example, Hema makes everyday objects more desirable through visual merchandising
- More customisation: Consumers are expecting and looking for more personal services. However, according to our speaker, no retailer has yet found the formula to make mass-customisation.
- Consume more ethically: Organic, bio, ethical… are words we all know. For non-food, these are more words than actions. In food, concepts such as Wholefoods star t to be successful.
- Offer more experiences and stimulations: In the 70’ stores were designed to be functional and efficient, not to be seductive. Today, retailers should really implement seduction in their concepts. For example, IKEA or Eataly are stores we.
- Brand content: In this aspect, Mr. Ducrocq opposes multi-brand to mono-brand concepts(of course there are levels in between). The difference is in the intensity towards the brand. Multi-brand formats exist for many years and are doing mass-market. However, some brands are launching their own stores (e.g. Nespresso, Danone yoghurt bars, …). For the brands going for this adventure some obstacles and difficulties needs to be tackled. To name a few, obviously, their concept can’t become a big competition to classic retailers. But also, they need to make their brand temple profitable, which is not always easy. Finally, they have to master IT-management, HR management etc, aspects that classic retailers already master for years
- Low-cost price opportunity: Here is another big trap to avoid: it’s not because you increase your brand intensity, that you automatically can increase your prices. You have to ‘kill’ others by creating turnover. For Cédric Ducrocq, the new successful retailers are barbarians such as Primark for example, with high marketing intensity, and low prices.
- E-commerce and omnichannel: Of course, omnichannel is present in the debate. For the founder of Amazon, shopping is a commodity; people have better things to do than spend time shopping. For our speaker, stores must offer to consumers what online can’t offer, meaning stimulation and emotions. To present the same as online would be a mistake. As an example, let’s think of the failure of Internet displays instore. If a consumer wants to check something online, he’d rather do it at home, comfortably. However, to equip your sales personal on the point of sales with tablets to help them, there is an added value. Another successful example of integration on the point of sales are the pre-order displays at McDonald’s
Can a retailer reinvent itself?
In fact, all this thinking process brings us to that essential question: can the retailer reinvent in order to be competitive tomorrow? According to Cédric Ducrocq, some retailers managed (e.g. John Lewis, Hema, Best Buy, …) and for others it’s more difficult (e.g. Carrefour…).
The methodology to adopt is to make a selection in your retailer-DNA: keep the elements that made you successful, and eliminate or transform what can be. But bear in mind that the thinking process is not enough, you also need to beware of governance issues. The failure of a transformation mostly comes from management issues, not from the technical marketing exercise. Everybody in your organisation must be in line with the implementation. A short-term financial view is here to avoid.
What to remember?
Convinced that we are facing a period full of disruptions, I agree with Cédric Ducrocq when he speaks about retailer-DNA. It’s obvious that you can’t just blindly rush into the new technologies and all the new trends. One must know them, follow them, study them, and adapt to them. But too often, we rush into these without fully studying if there will be an added value in the end. Disruptions and (r)evolutions are daily events. The real exercise is to keep an eye on one’s vision and mission. Strategy is the one you must adapt according to the disruptions.
All in all, here is a book («Inventer le commerce de demain» by Cédric Ducrocq) and a network (SMA) I recommend you.
SMA Sales Management Association
Cédric Ducrocq : President Groupe Dia-Mart
Founder of Groupe Dia-Mart (50 persons, 7 million Euro turnover) : Dia-Mart Consulting, Côté Clients (clients studies) and UX In Situ (retail design and merchandising).
PDG of Dia-Mart Consulting: invent the retail of tomorrow, optimise today’s performances.
Author of different books on retail, among which "Distribution: inventer le commerce de demain", Pearson, 2014
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