Transformation of loss-making retailer towards e-commerce pure player
Situation:
- Established retail brand faced unprecedented losses in sales and EBIT
- New shareholder – an international retail group – aimed to transform the business model by:
- Focusing exclusively on digital sales channels
- Targeting younger customer segments
- Funding the transformation through restructuring
- Objective was to turn around the business and establish a profitable e-commerce pure-play model
Actions:
- Analyzed market, consumer trends, and competitive landscape and derive drivers of declining performance
- Assessed e-commerce growth potential and younger segment attractiveness
- Developed e-commerce strategy with clear value proposition, product mix, pricing strategy and points of differentiation
- Refreshed brand positioning and visual identity
- Optimized media mix and campaign strategy for online traffic and conversion
- Curated assortment for target audience preferences
- Implemented competitive pricing and promotional calendar
- Enhanced website content, user experience, and personalization
- Introduced value-added services and seamless customer journeys
- Assessed synergies with parent company in assortment, marketing, supply chain and IT systems
- Redefined organizational model for digital-first approach
- Developed restructuring plan to streamline operations and drastically reduce costs
- Planned and simulated discontinuation of other sales channels
- Established transformation office to manage implementation
- Defined workstreams, milestones, and KPIs for progress
- Prepared social partner negotiations and transition
Results:
- Implemented e-commerce pure-play strategy
- Achieved growth in online sales and market share among younger segments
- Increased brand awareness and loyalty
- Redefined assortment, focusing on high-margin items
- Leveraged synergies with new shareholder
- Streamlined cost structure and reduced cost base by 35%
- Implemented staged transition plan to move from multi-channel to e-commerce only presence
