“Technological progress will never be as slow as it is today”
Impressions from the TrendArena (Day 2)
In my previous article I summarized the first day of the Internet World Expo. With this text I would like to look back on some selected lectures of the second day.
The big ones eat the small ones – Perspectives in a platform world
On Wednesday morning, Lars Hofacker, Head of E-Commerce Research at the EHI Retail Institute, gave an exciting insight into his research on platform economics in Germany.
- E-commerce continues to be a growth market. However, market concentration is increasing noticeably (especially with regard to generalists as well as the fashion and consumer electronics industries).
- Above all, companies with strong sales rely on their own platforms. However, external platforms also offer prospects for small retailers.
- Cross and omnichannel strategies are mainly pursued by chain stores. Across all companies, only about a quarter of dealers currently have such offers in their portfolios.
Platform economy and no end in sight: The next stage in digital retailing
The lecture by Dr. Holger Schmidt from the TU Darmstadt followed a similar course, but placed the topic in a more global context.
- There are three generations of platforms:
- Marketplaces (1998-2006)
- Share Economy (2006-2013)
- Data and ecosystem driven platforms (2013-today)
- Third generation platforms are growing mainly via their partners and therefore have a tendency towards exponential growth. Business models designed for linear growth are no longer keeping up.
- In their platform strategy, European companies are still concentrating on becoming a first generation platform instead of starting directly with the third generation. This is one of the reasons why Europe has so far completely underestimated the platform business model. Only 3% of the market share is currently held by European companies.
- Platforms such as Amazon and Alibaba also earn a great deal from their additional services (e.g. cloud services, online marketing, finance, logistics, payment, digital media, etc.).
- The platform economy is now beginning to expand into the B2B sector. There are some interesting approaches in this sector in Europe (e.g. Crowdfox), so the battle is not yet lost. But here, too, numerous Asian competitors are developing.
- One problem is that hardly any high investments are made in Europe. However, these are necessary in order to create globally relevant platforms.
Headless, cloud-based or on your own server? Strategic decisions in the selection of e-commerce software
The panel presented by Martin Groß-Albenhausen took a slightly more technical approach. The Deputy Managing Director of the Bundesverband E-Commerce und Versandhandel (bevh) discussed with Florian Schneider, Head of Operations, Platform & Content Management at garden retailer Dehner, Nicole Wehner, Managing Director of MAC IT-Solutions, and Nicolas Speeck, owner of SchwarzGold Consulting, the right choice of software for online retail.
- Dehner initially decided to create its own platform for e-commerce, which is separate from the conventional retail systems. For this platform, Dehner uses SaaS and the cloud, as there is no manpower to operate everything itself.
- For Speeck, standard software in the cloud is an 80-20 solution that is particularly interesting for smaller retailers. As soon as it has to become more dynamic or more innovative, it can be useful to have your own solution because you can’t progress with standard software. In addition, standard software quickly loses its updatability if customizing is too strong.
- Speeck sees an API-based headless approach as the way of the future, especially for large retailers.
- From Nicole Wehner’s point of view, retailers are now more willing to go into the cloud. Innovations in the offered software solutions are discussed in advance with the customers. For many customers, however, the stability of the ERP system and their own processes is particularly important.
- Florian Schneider confirms this for Dehner. A stable ERP is the foundation on which new features can be built. In any case, Dehner does not see itself as a fast mover, but as a fast follower. The goal is to be the first competitor to implement promising features in its own industry.
- On the subject of innovation, Wehner also expressed the suspicion that technological progress would never be as slow as it is today. This means that development is becoming ever faster. Retailers cannot have the task of providing the resources and teams for this. Rather, the IT partners are obliged to support their customers.
#FORWARDBEAUTY: How Douglas is shaping tomorrow’s online retail
Vanessa Stützle, EVP Digital Business & Omnichannel at Douglas, then described how an established retail company can position itself in e-commerce using the example of her company.
- Douglas is the German market leader in the beauty segment both offline and online. Nevertheless, the company faces a number of challenges:
- External competitors (including Pure Players such as Amazon and Flaconi)
- Internal challenges: E-commerce has long not been understood as a core element of the company. This was another reason why Douglas had to contend with flattening growth.
- Some time ago, online retail therefore became a central component of the company’s strategy.
- First step: “Fixing the basics” (bringing the old Hybris system up to date in order to regain speed in product development)
o Improve Page Speed
o Stabilize shop at high load
o Design the shop responsively
- Further measures:
o Content production (videos, model images, user-generated content)
o Push omnichannel offers (e.g. redirect online customers to branches before Christmas as soon as timely delivery is questionable; promote ratings by e-mail or push message to Beautycard customers)
- In addition, the online perfumery Parfumdreams was acquired. As a result, Douglas partially expanded into new markets and gained access to new customer groups.
- Future strategies:
o Become a marketplace
o Start Media & Data Sales
o Become technically more modular and faster
Outlet Shopping 3.0: from offline to online to offline – How to digitize a luxury outlet?
Dr. Stefan Hoffmann, Managing Director of Outletcity Metzingen, which emerged from the factory outlet of Hugo Boss in the 1970s and attracted more than 4 million customers from 185 countries to Swabia in 2017, provided a glimpse into the special market of outlets shortly afterwards.
- Outletcity Metzingen pursues two different conversions – on the one hand the footfall in the brick-and-mortar outlet and on the other hand the orders in the online shop.
- Only registered users can use the online shop. In this way, the discounted prices of the brands are to be protected. In addition, the online shop pays attention to a good product presentation – it should not give the impression of a discount battle. In addition, more brands are represented online than in the brick-and-mortar Outletcity in order to offer online customers as much variety as possible.
- The company is also responding to the fact that customers are preparing their visits to Metzingen online. This can be seen, for example, in the personalisation of newsletters. For example, customers living further away from Metzingen are offered better vouchers and discounts than customers from the immediate vicinity. After all, a trip to an outlet center involves a lot of effort.
- With regard to the footfall, Outletcity Metzingen wants to change from a pure Landlord to a digital service provider. Therefore, an app will be launched in April to help customers find parking spaces and the desired brand shops. Customers will also be able to collect points while shopping.
- The loyalty programmes are designed differently for DACH and international customers. After all, international customers only visit Metzingen once in a lifetime or come back years later.
- It is also a technical challenge to equip the shops managed by the different brands in such a way that customers can collect points as easily as possible.
From shop to platform: The example of Schuhe24
Dr. Dominik Benner, CEO of Schuhe24, had a special story on how a brick-and-mortar retailer can transform itself. After taking over his father’s shoe shops, he realigned the company and created Schuhe24, a platform designed to support the small brick-and-mortar shoe retail in particular.
- In the meantime, around 1,000 shoe shops are connected to Schuhe24. For them, the platform manages the processing of online orders placed via Schuhe24, customer contact, dispatch management, data quality, payment and much more. In this way, retailers can participate in e-commerce with little effort.
- The customer target group is in particular women between the ages of 40 and 65, for whom it tends to be important to support the brick-and-mortar retail.
- From a technical point of view, it is often a challenge to connect retailers, as they sometimes only have an ERP system. However, since the platform is dependent on an automatic exchange of information in real time with the various ERP systems, Schuhe24 has to cooperate in particular with the manufacturers of these systems in order to implement appropriate interfaces.
- In addition, Schuhe24 also supports its retailers with other offers such as conferences, support for social media activities, omnichannel approaches, individual web shops, etc.