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Study: Retailers not optimizing customer data for omnichannel success

BY DSN STAFF

CHICAGO — While numerous retailers have collected years of customer data, only 9% are leveraging the information in a structured, usable way, according to HRC Advisory, a retail advisory firm and unit of Hilco Global. The finding was revealed Monday as part of HRC’s latest retail industry study, which found that outdated organizational structures and processes, non-integrated IT platforms and a lack of a clear roadmap are major barriers preventing customer data in enabling a retailer’s omnichannel efforts.
 
“Retailers are inundated with consumer data and research, but the reality is the vast majority are not able to effectively use it,” said Farla Efros, EVP/COO of HRC Advisory. “Despite the impact of fast moving competitors like Amazon, more digitally savvy consumers and a volatile economy, many retailers are still planning and managing their businesses based on traditional brick and mortar practices. The changing dynamics of today’s retail environment require new approaches to meet the challenges and opportunities presented by today’s consumer, and retailers need to update and integrate their organizations accordingly to avoid the lost sale.”
 
Significant findings of the report include:
 
  • Only 9% of retailers studied are effectively leveraging their vast amounts of customer data in a structured way as part of their merchandise buying and planning processes. 87.2% of retailers in the study plan to focus on more effectively using customer data to grow sales, but only 65.4% are actually in the very early stages of such efforts;
  • Retailers aren’t operationally structured for omnichannel. Most retailers (87.2%) surveyed said they have taken initial steps toward or are planning to initiate an organizational change to better integrate processes across all purchase channels. But for 88.2% of retailers surveyed, e-commerce operations and marketing largely remain separate silos;
  • Inventory isn’t being fulfilled effectively. 84.5% of retailers surveyed (across all sectors) said they are focused now or over the next 12 months on enabling new fulfillment options to avoid the lost sale. However, only 10% of retailers surveyed have the capabilities to effectively fulfill from store, which is a way for them to contain fulfillment and return costs, as well as avoid some markdowns; and
  • Retailers have not found the right balance between online exclusives and product available in all their channels. Less than half (42.5%) of the retailers surveyed said they had or were exploring “online exclusives” beyond color and size extensions to new categories and brands, while 66.2% of retailers are primarily focused on size and color extensions to address the realities of constrained brick and mortar space and slow inventory productivity.
In addition, 78.2% of the retailers surveyed have efforts underway to clean up, organize and integrate various sources of customer data, and 74.3% of the retailers have migrated to the same prices across all stores and channels.
 
However, as many as 45% of retailers are considering varying prices across channels and stores post initial markdown. Less than 15% of retailers have started to make the necessary changes to planning and forecasting processes to reflect the impact of new fulfillment capabilities.
 
“First and foremost, retailers need to recognize there has been a meaningful shift in power toward the consumer, resulting from today’s numerous ways of purchasing and much increased price transparency,” Efros said. “In order to mitigate this shift and maintain market share, retailers need to adequately differentiate on the right combination of unique and/or exclusive products that are valued by the customer, while providing exceptional service and a compelling in-store experience that can’t be matched by newer pure play online competitors.”
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Coty’s CEO resigns

BY Antoinette Alexander

NEW YORK — Coty announced on Monday that CEO Michele Scannavini has stepped down from his role at the company and resigned from Coty's board for personal reasons.

Coty's chairman, Bart Becht, will become interim CEO, working with Coty's executive committee to ensure a smooth transition and oversee major decisions at the company. The company plans to immediately begin its search for Scannavini's permanent successor. Becht will remain as chairman of the company once a permanent successor has been appointed.

"I want to thank Michele for his many contributions during his career at Coty," stated Becht. "Michele has been a material part and key contributor to Coty's success over the past decade. We would like to thank him in particular for taking Coty public through a listing on the New York Stock Exchange and developing a clear strategy for Coty's future.  We will miss Michele's professionalism and humanity; we wish him the very best as he moves on to the next phase of his career."

Becht joined the Coty board as chairman in 2011. From 1999 to 2011, he served as CEO of Reckitt Benckiser, a consumer goods company in the field of household cleaning and health and personal care. Becht also held a variety of marketing, sales and finance positions at Procter & Gamble. 

Becht added, "Coty is a great company and leader in the global beauty industry thanks to its extraordinary group of talented employees and strong portfolio of category-leading brands. It is also a company that is well positioned to extend its leadership in the beauty industry in a way that drives shareholder value over the long term. To achieve both, the board intends to put in place a permanent CEO who will further accelerate Coty's progress towards its stated strategic priorities of growing Coty's power brands across the globe and implementing its global efficiency plans. We believe both a clear focus on and execution of these priorities should help drive both profitable growth and shareholder value. "

"I feel honored to have led Coty through an important chapter of its history and proud to have contributed to the success of the company over the last 12 years," stated Scannavini. "It has been an extremely rewarding adventure, developing great brands and leading a group of exceptionally talented and passionate people. I wish Coty and my long-time colleagues the brightest future and many more years of success."
 

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China Securities Regulatory Commission approves Alliance Boots stake in pharmaceutical distributor

BY Michael Johnsen

ZUG, Switzerland — Alliance Boots on Monday announced that China Securities Regulatory Commission has approved the group's investment in Nanjing Pharmaceutical Company Limited. This approval, following the authorization recently received from China's Ministry of Commerce, paves the way for the completion of the investment in the coming weeks. 
 
As a result of the investment, Alliance Boots will become the second largest shareholder in Nanjing Pharmaceutical Company Limited with Board and operational management.
 
In September 2012, Alliance Boots announced that it will acquire a 12% stake in Nanjing Pharmaceutical Company Limited, through a private placement, for a total consideration of approximately £56 million ($91 million in today's dollars). Nanjing Pharmaceutical Company Limited, listed on the Shanghai Stock Exchange, is the seventh-largest pharmaceutical wholesaler in China with sales of around $3.3 billion in 2013.
 
Alliance Boots first entered the Chinese market in 2008 through its joint venture Guangzhou Pharmaceuticals Corporation, which operates in complementary geographies and continues its successful development.
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