Digitization in retail: transformation from classic “store retailer” to “new retailer” with store plus digital retail business

Client:
Following the strategic realignment of Leder & Schuh AG in 2015 – 2016, the company is focusing its activities on the HUMANIC and SHOE4YOU sales lines. The SHOE4YOU store network was significantly expanded in 2016/2017 and now boasts around 60 locations.

With HUMANIC, LEDER&SCHUH is represented in Austria, Bulgaria, Germany, Croatia, Romania, Slovakia, Slovenia, the Czech Republic and Hungary, and with SHOE4YOU, the home market of Austria is served. The company currently operates 206 stores.

In addition, HUMANIC is represented by the eShop www.humanic.net in Austria, Germany, Slovakia and the Czech Republic. An important milestone in 2017 was the launch of the “yourHUMANIC Club” customer club.

Situation:
The buzzword digital transformation affects all industries in today’s economy. Retailers are under particular pressure, however, and have to find a balance between stationary and online retailing. Leder& Schuh AG with its HUMANIC and SHOE4YOU brands is one of the largest shoe retailers in Europe and has taken on a pioneering role in this field. With the help of a GOiNTERIM manager, the transformation from a classic “store retailer” to a “new retailer” with store plus digital retail business was successfully accelerated.

Digitization places very high demands on trade and retail. Here, the customer has high expectations of the shopping experience coupled with expectations of online retail and digital solutions. This requires new processes, linking of all company divisions and, above all, a strong and flexible logistics service to be able to meet these requirements.

In the course of realigning the business model of Leder & Schuh AG with the brands Humanic and shoe4you, future digital & technological developments and opportunities were defined with a management consultancy and a digital strategy was developed. The LEDER & SCHUH Group, one of Europe’s largest shoe retailers, operates more than 200 locations and generated sales of approx. 374 million euros. Mr. DI Thomas Weber, CEO of Leder&Schuh AG, emphasizes “with the digital transformation, we are pursuing the goal of inspiring our customers – behind this are people who think and act in an entrepreneurial way and together successfully shape the future”. Technology is not the only focus of digitization. The aim of digitization is to comprehensively align and design all areas and processes of the company to provide a high level of customer experience.

Implementation & Project Task:
To implement this strategy, a Chief Digital Officer was sought at short notice in April 2018 to drive the transformation from a classic “store retailer” with initial digitization initiatives into a “new retailer” with store plus digital retail business. This position should be responsible for the development and implementation of the digitization strategy, the Digital Retail Business Model and projects derived from it. The aim was to provide LSAG with optimum support in introducing the new digital topics, to make them productive quickly, to develop them further and to ensure a transfer of know-how. In order to quickly get into the implementation of the digitization strategy, which requires appropriate experience and energetic entrepreneurship, an interim manager was sought for this position through GOiNTERIM, an international provider of interim and project managers. For such projects, an interim manager is not only a helpful implementer, but with his view from the outside he also brings new perspectives and ideas into the organization. This helps to realize the transformation process quickly and successfully. “We have very extensive experience in the area of digitization and adaptation of business models on an international level,” says Dr. Martin Mayr, Managing Director of GOiNTERIM, “It requires managers with extensive experience, years of expertise in transformation projects and implementation strength.”

Rafael Baer, who has many years of experience in digital sales, was commissioned as interim manager via the interim management consulting company GOiNTERIM. His expertise lies in sales/marketing, consumer internet and especially in the international scaling of e-commerce companies. His industry focus is on digital media, tourism and e-commerce. He gained his more than 17 years of professional experience on an international level in various management positions in the travel and e-commerce industry as managing director and start-up founder.

Results:
As an industry outsider, Mr. Baer quickly learned LSAG’s processes and procedures and accelerated omnichannel digital activities through design, development and implementation across all of the company’s business units. He uses an agile start-up approach and consistent digital thinking.

In daily business, he managed the e-commerce, customer club and customer service departments. In addition, he was responsible for the individual omnichannel strategy projects, which were the top priority in LSAG’s strategic direction and 100% supported by the full board. In parallel, it is a criterion for success that GOiNTERIM actively supports and accompanies the project throughout its entire duration. “One of our partners accompanied the project as a sparring partner for the manager as well as the board of directors of Leder&Schuh AG,” says Mayr, “thus we can support the project optimally through our know-how and network.”

The challenges for the CDO at LSAG were at the same time the success factors, e.g., anticipating and boldly breaking new ground, being highly transparent and trustworthy, offering unique and personalized customer experiences by using agile methods. The transfer of expertise and enhanced digital competence of employees was particularly important. Because what is often overlooked is that the technological revolution, i.e. digitization, requires a profound cultural change.

Since the strategic importance and significance of digitization in the company had already been widely communicated by the management, the first measures and projects were quickly launched. Firstly, a relaunch of the humanic.net website was launched to ensure the site’s mobile capability. Secondly, a virtual shelf was created in the stores, which customers can use to order out-of-stock items. These items are then conveniently delivered to the customer’s home. In doing so, Mr. Baer relied on close cooperation with all internal departments, especially IT and Sales, and was in close daily contact with them. A test was also set up to sell exclusive Humanic items via the Amazon marketplace. This test was implemented at very short notice with a lead time of 8 weeks.

Parallel to the activities, the organization was further developed with the recruiting of digital know-how carriers for the e-commerce area. Rafael Baer also assisted in the search/selection for the replacement of the interim position.

One milestone in optimizing the customer experience was the implementation of the option to send items to customers directly from the store. This means that product availability can be increased even further in all channels.

Mr. Baer brought numerous approaches that have already proven successful in other industries. What stands out is his understanding of how to implement digital measures in a way that fits the company and bring people along for the ride. In his professional manner, he challenges the company to put its processes to the test from the customer’s point of view and to adapt them to digitalization.

This digitization project was a great challenge for the Leder&Schuh Group and a process for the entire company, which we have met. All employees here supported the process and actively accompanied the change.