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E-commerce has great advantages for traditional businesses, especially in times like the one we are experiencing, however, there are important challenges that must be taken into account, said Eduardo Paulsen, co-founder of Ben Franck .
During the live class “E-commerce opportunities for traditional companies” , organized by and IEBS through the HomeSchool initiative , Paulsen said that one of the main challenges is to generate a good experience through the digital world.
For this, it is important to maintain consistency between communication and show the attributes of the product, whether descriptive, virtual or even physical.
Another challenge, he said, is implementing an omnichannel strategy, which requires companies to develop a much more robust value chain, more advanced infrastructure and an organizational structure that is aligned to change.
But, how can a traditional business structure this omnichannel model? Paulsen shared some of the experiences he and his team went through during the creation of Ben Franck, a Mexican lens brand that started as an e-commerce and now combines online and offline experience, that is, it has an omnichannel strategy .
The company was founded in 2015, when Eduardo and his partners studied their master's degree. Five years later, today they have 23 physical stores and an innovative business model that has allowed them to gain market preferences.
The Ben Franck co-founder attributes his success to saying, “We have a different business model than the traditional one, in which we focus a lot on the brand and we have mixed online and offline very well.”
He explains that traditionally, going to buy some glasses was a “horrible” experience. The stores look like pharmacies and the interaction is limited, you are not allowed to touch the product, which is locked or behind a counter, and on top of that, the person who attends you makes you feel sick.
“The glasses were sold as a necessity, ignoring that they are also an accessory. In addition, traditional retailers offer designer brands at very high prices, or little design, “he explains. Ben Franck's commitment then was to offer a different shopping experience .
The entrepreneur comments that they were born online because in terms of investment, this model is cheaper, but warns, “what you save in store, you should consider as an investment in marketing strategy.”
“People don't buy if they don't get on your site, and they don't get on your site, if you don't invest in marketing. The marketing strategy is like your income ”.
Later, Ben Franck was able to open physical stores. In these five years of operations, they have realized that whoever attends a physical store had 80% prior online interaction.
“This makes the shopping experience different. The online is important to sell, but also for the consumer to interact with the brand and then complete the purchase via the store, “he says.
Another of their secrets was to offer a single price on their products: 1800 pesos and how do they do it? Eliminating intermediaries. This way they were able to kill two birds with one stone: they reduce costs and control the experience throughout the client's journey.
Paulsen explains that when you buy glasses you face two problems: selecting the glasses and the eye exam. So they put in place some options to solve it. In their e-commerce they have a test that recommends models. In addition, you can order three models so that you can physically test them at home (you leave a guarantee deposit that is 100% refundable).
Previously, eye exams were done in partnership with independent doctors, they did not sell glasses, but now with physical stores, these two aspects are solved: “An advisor helps you select the style according to face shape and style, you can try the lenses traditionally and we do the exam right there. ”
“To connect with customers, you must have consistent and efficient communication. Remember that omnichannel is keeping the customer experience constant across all channels.”
Create an omnichannel customer-focused experience
The entrepreneur recognizes that electronic commerce has its advantages, such as the fact that Mexico is the country that grows the most in this channel. By entering e-commerce you have instant access to a regional or global market. You also have more metrics and better customer insight. Your fixed costs are lower (rent, inventory and personnel).
However, there are challenges that you should take into account, such as the one that is more difficult to connect with the customer, trying a product and you must prevent possible fraud. In addition, you must take into account higher variable costs (shipping and marketing). Remember that omnichannel is keeping the customer experience constant across all channels.
Additionally, it is important that you define the financial levers of your business. In the case of Ben Frank, Paulsen explained that they had to take into account aspects such as shipping costs, inventory costs, probability of purchase and even probability of theft (due to the evidence sent home).
What should you think about when setting up an omnichannel model? What omnichannel is looking for is that the experience in the different channels is consistent and uniform. A multichannel model has many models, but they are disconnected, each one gives you a different value proposition and in an omnichannel model, they are all aligned to give you a complete and consistent service.
Source: Eduardo Paulsen
In order to have an omnichannel program, it is necessary to define a strategy and build the pillars to support it. To do this, follow this route:
- Define your strategy. Here the objectives of an omnichannel program are established, you understand the client's need, you map their journey, define the role of each channel and maintain constant experience and communication.
- Product offer. You determine the products and services by channel. Sometimes you cannot have the same number of products in a physical store as online.
- Pricing. You establish the pricing strategy. You define if you have a different price on each channel.
- Service levels. You take stock of service levels against associated costs.
- Supply chain. Can your supply chain support interaction between channels? Do you need your supplier to deliver faster or have inventory? If you have it, where are you going to store it?
- It / Data. Build the necessary infrastructure and make the channels communicate so that there are no problems, for example, that a product is purchased online and that it no longer exists.
- Human Resources. You align the incentives in the organization to avoid conflicts of interest. For example regarding commissions.
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