Client Profile
Our client is a leading media and stationery retailer. Previously, the majority of their sales were processed through offline stores. However, the company maintained a notable online presence and wanted to leverage this to enhance their multichannel sales through brand segmentation.
Challenge
The retailer aimed to bolster their online sales, with half of this increase projected to come from an enhanced loyalty program, and the remaining 50% from the introduction of new product categories. Leveraging their well-established brand was crucial for this expansion. The company needed strategies to support the profitable growth of their online commerce, both through their proprietary platform and an innovative marketplace solution.
Solution
We conducted a meticulous analysis of both offline and online sales data to comprehend the patterns in purchase rotation and frequency. We then engaged in price, margin, and stockholding modeling across the supply network to define a Just-in-Time (JIT), dropship sales, and distribution model. Subsequently, we established a multi-fascia approach to eCommerce based on brand and pricing segmentation.
Additionally, we created a dynamic and surge pricing model and developed an automated supply chain solution, optimizing supply chain efficiencies and sales solutions.
Results
Our strategy led to the successful launch of three high-performance online sales platforms, each serving similar categories but with a significant price-point variance. This facilitated a substantial improvement in working capital via the ‘pay on sale’ eCommerce business model integrated with an automated supply chain.
Stockholding was reduced by 30%, leading to 20% savings in inventory through the introduction of a multi-channel drop-ship model. The sales balance was achieved at 50:50:50 – evenly distributed among online, offline, and new categories (introduced through subscription marketplace).
Conclusion
This case study demonstrates the power of strategic brand segmentation and the careful leveraging of established brand presence for successful online sales expansion. The fusion of meticulous data analysis, efficient supply chain solutions, and strategic pricing models allows for profitable growth and enhanced multichannel sales.
