Retail Management - Conforama


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Retailing Management: Conforama case study
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  • Retail Management - Conforama

    1. 1. Agenda CONFORAMA case study Wafaa Yeyuan Zhufang Tiphaine Charlotte 28th March 2013
    2. 2. Agenda Agenda 1 Business Analysis 2 On-line Consumer behaviour 3 Consumer Complaints 4 Implemented Solution – Core Idea 5 Implemented Solution – Step 1,2,3 6 Digital Further Optimization 7 Conclusion
    3. 3. Business Analysis Conforama – Position Position of Conforama We are Key Discount Retailer. What Conforama lack in Digital Marketing - Value Conveyor Except discount price, our company is lack of other value conveyors. Price is not enough. Need to reinforce in selling-service, delivery service and after-sale service quality - Customer Experience The product selling in Conforama is high-involvement product. Even on-line store, customer might takes long time to compare in price and advise. To overcome the discrepancy of client expectation and reality product, we can solve this problem by offering service in live chat
    4. 4. Business Analysis Conforama – Position IKEA BUT Background - Swedish company (1943) - French company (1972) - Manufacturer, Retailer - Retailer - 42 purchasing centers in - 200+ stores France 36 countries (1300 vendors) - Own design teams - 280 stores in 26 countries Strategy - Value Sharing - Word of mouth - User-oriented design - Full linear line from design to retail CONFORAMA - French company (1967) - Key Discount Retailer - Oversea department in Europe - 200 stores France - Customer experience in- -Discount price store by providing digital devices - New concept stores “But City & But Cosy”
    5. 5. Consumer Behaviour Characteristic and Desire of our consumer Characteristic of On-line Consumer The consumers who purchase on-line are focus more on the service, transparency of price and the convenience to comparison. What motivate client in online purchasing? - Convenience: Easier searching engine - Product: More selection and comparison - Low cost: Discount & free shipment or return - Better service: faster shipment or in-store pick up
    6. 6. Consumer Behaviour Difference between Physical Store & On-line Brick & Motar stores On-line store Product - High involvement & more expensive - Low involvement and less expensive Service - Need expert advice & explanation - Details information & introduction -Immediate response for questioning -Longer decision time and delivery time to rent van with costly -Update new product -Update special offers on-line -Easy to compare the products online with other stores -Convenience ; delivery to home Quality - Higher demand - Prefer to take trial before purchase - Want to visualize real product -Lower demand comparatively -Always high brand loyalty clients --Can visualize products with pictures and simulations + comments After-sales -Quick response service in store Service with -Face to face discussion -Solution offer customer -Quick response -Problem discussion -Solution offer
    7. 7. Consumer Complaints What exact desire on-line customer need? 95% negative sound on Conforama on the Internet Here are the main concerns Department Problem Product  Quality complaints Delivery  Overlong delivery time  Asymmetric information  No way to track order Customer Service  Inefficiency  Insufficient attention on customer complaints  Lack of live chat system Communication  Inefficient and blur value delivery  Negative impact of word-of-mouth Apparently, discount is no longer enough to appeal our customers once Conforama fails in tackling these issues. What we need to think Short Term: Existent problems must be solved. Long Term: a strong brand loyalty should definitely be built by CRM system since brand loyalty can minimize the negative impact generated by any unpredictable mistakes.
    8. 8. Solution Core Idea Support Department Product • • • Problem CommunicationSolving Short-term • • Marketing Department Long-term Optimize QC system Delivery Clarify value Establish community Process The pyramid towards loyalty • Loyalty Building Optimize information system Optimize logistic Customer Service Reorganize CRM system Relationship From a vendor to a mentor
    9. 9. Solution Pyramid to build loyalty: Step 1 – Step 2 – Step 3 In our short and long term solution, we proposed to adjust our digital marketing in 3 steps: Step 1: Pre-purchase – prevent customer complaints Step 2: In-purchase – develop customer confidence Step 3: After-purchase – build customer loyalty: 3 2 1 Build customer loyalty Develop Customer Confidence Prevent Customer Complaintss STAGE Achieve Customer Delight Satisfy Unstated Customer Needs Meet Basic Customer Requirement DISCIPLINE PROCESS
    10. 10. Solution – 1st step Meet basic customer requirement 1. Sales Service – Answer for client inquiry As feedback from shopper, most of them desire to get answer rapidly. Hereon 3 main immediately solution Customer expectations Sales service Solutions Reason Expected Result 79% of online shoppers hope their questions can be answered immediately. Apply living chat software to reply customers directly 56% of shoppers who love chat are more likely to buy form a website with a live chat Solving their problem directly Ask for feedback after one sale transaction Answer email within 2 hours Prevent complaints Increasing conversion rate Increasing average basket
    11. 11. Solution – 1st step Meet basic customer requirement 2. Sales Service – Perception from Passive to Active On top of quick response, we suggest to optimize our website design to be more friendly and easy shopping. Customer expectations Website design Solutions Reason Expected results Friendly and intimate online shopping atmosphere Changing expression Customeroriented psychology Customer would be more intended to ask for help Service Concept Relocation We need to alter existing “A votre écoute” to “Je vous écoute” service concept. It helps to improve the bad service image from passive to active & positive.
    12. 12. Solution – 1st step Live chat system Online shoppers are more craved for credibility as the products aren’t virtually visible. They need more personalization. 79% of online shoppers state they hope their questions can be answered immediately. 91% netizens show the most effective and efficient way of communication is live chat. Live chat system is good entrance of customer data mining. More personalization
    13. 13. Solution – 2nd step Satisfy Unstated Customer Needs Sales Service – Diversification in delivery and leadtime Understand customers’ implicit desires could help to reinforce their confidence, therefore we provide some concrete solutions: Customer un stated expectations Solutions Expected Result 77% of customers hope for free shipping Provide free delivery service when attained specific purchasing amount (For example:500 euros ) Reinforce customers confidence Increase average basket  Efficient delivery Improve logistic service Introduce tracking package system (applied both in physical and online store) Shorten delivery process Easy to track order Shorter waiting time Pick-up in store Point de relay More flexible delivery choice
    14. 14. Solution – 2nd step Shift of Relationship by Experience From a vendor to a mentor Product Proposer Functionality ‘This website works really well’ Familiarity ‘The website understands me’ Solution Advisor Familiarity Experience Hierarchy Value Clarification Life Mentor Evolution of word-of-mouth ‘I love to share the story of this website!’ Evangelism ‘This website is a part of me’ Internalization Internalization Savant friend
    15. 15. Solution – 3rd step Aligned shopping experience More Personalization More Social ecommerce More Mobile Shopping More Uninterrupted Cross-Channel Vendor Live chat Customer ID Front office Synchronized Information Customer DATABASE Sales evaluation Problem Detecting Back office
    16. 16. Information System Customer ID system A unique ID is employed as Identity in Conforama Information System CUSTOMIZED DATABASE Basic information Transaction information Request information Tracking information Information save/load Brick Click Customer ID CBA Synchronization Triangle Symmetric information App Customer ID will be the key to open all the customized information in this information triangle. Due to our central database system, we are able to load customized information before the service and finally we can realize uninterrupted crosschannel service with the synchronization of information.
    17. 17. Service evaluation Achieve Customer Delight After Sales Service – Answer for client inquiry An effective and efficient service evaluation circle is suggested to work on service/product quality monitoring. Customer potential Customer satisfaction
    18. 18. Problem Detecting A digital community is proposed to be created at both external and internal extent. By a variety of communication tools, we’re able to hear from our customers in time as to our services as well as goods. Meanwhile, internal systems will employ all the internal resources to find solution for each specific problem or a series of homogeneous problems. 1.Connecting to Customer ID 2. Focused on the steps involved in producing the product or service 3. In control of the steps involved in producing the product or service 4. constantly working to understand and order all that is happening.
    19. 19. Agenda THANK YOU
    20. 20. Online Issues Different digital tools for Conforama communication Conformation has a 95% negative e-reputation mainly because of their on-line services: people complain about the delay of delivery and even about the quality of the products. People not satisfied at all don’t hesitate to share their anger on the social media which impacts the e-reputation of Conforama. • The website where the consumer can compare, choose and buys its product • Social media (Facebook fan page, Twitter account) • SAV after-sales service dealing with the issues about the purchases and the delivery of the items ordered on-line
    21. 21. On-line solutions Proposals for online issues • • • • • Need to improve the client relation and communicate clearly with them on the social media. It is important for consumers to feel that what Conforama wants is to satisfy with the clients : be active on the Facebook page and consumers blogs. Create a page dedicated to after-sale service in order to be constantly in touch with the clients Follow the consumer from the beginning of their purchase process before the sale with search engine optimization => make Conforama appear in search results during the purchase : make the website attractive and easy to use : do not hesitate to emphasize the special offers, make special offers exclusively on-line after-sale service : communicate with the client : real-time following of the items purchased by e-mail (the consumer can know whan the product is sent to him and when it will receive it. For social media: Conforama has to respond to angry consumers and give them discounts and special offers to repair the potential problems. Show that it is reactive and answer the consumers.
    22. 22. Marketing Communication Analysis Conforama and Competitor IKEA BUT CONFORAMA 1. Through Ambassador clients 1. Through trendy header face 1. Through network of value IKEA focus value and prefer WOM. Their ambassador clients will spread out information to potential customers through a one to one interaction. Customers selecting this kind of product always take higher involvement - longer learning process and expertise advice – like trendy header (not only word of mouth). Only utilize the network in “discount price” value of Conforama 2. Through its products 2. Through a customer experience 2. Through its products or reinvented + community discount management Applied visual marketing Always focus on Discount (experience marketing) and customer cognitive learning want. Emphasize the product performance rational benefit
    23. 23. APPENDIX SWOT – Conforama and Main Competitors IKEA BUT CONFORAMA STRENGTHS - Leader and Global brand: good brand awareness - Concept: strong and well designed - Product: renewable and recycle, wide variety 10000+ and good quality - Price: compelling pricing and good value - Service: hard wearing and long-lasting. Customer can pay more for it elsewhere. - Stores: large provide space to showcase products and carry supporting inventory - Environmental Friendly – sustainability WEAKNESSES - France brand - New technologies : new website and involvement in social media - New concept stores: “But City & But Cosy” - Reinvention of the customer experience with digital store devices and community management - France brand - association with international celebrities to reach out to the customers - Seasonal attractive promotional offers to attract consumers - High brand loyalty in consumer minds especially in premium target group - Has a strong workforce of over 13000+ employees - some products are poor quality - some items may be too involved for the average customer to assemble - Outmoded and old fashioned brand - Rising raw material cost causes increase in prices of products - Brand penetration globally is less
    24. 24. APPENDIX SWOT – Conforama and Main Competitors IKEA BUT CONFORAMA OPPORTUNITIES - soft economy makes low price - Gain market share against competitors furniture even more appealing for - Create proximity and consistency consumers - many traditional furniture retailers have gone out of business - Rising popularity of online shopping - Expanding into specialized retail store catering can provide specific service to consumers - More advertising and marketing would help to increase visibility - After collaboration with other brands, brand hopes to make more choice available -Global expansion would help to increase brand presence and brand awareness THREATS - growth of competition - economic crisis - not all consumers are able to pick up, transport and assemble the furniture - Strong competition (Ikea) - Kind of satured market with the financial crisis 1.The customers have a higher bargaining power and low switching cost 2.Competitive environment in terms of prices and availability