Case Study: Value Building – RETAIL

E-Commerce has helped many bricks and mortar operations remain competitive and market leading. In this case study we highlight how we helped a quasi-e-commerce retail operation turn into one of the most powerful digital players in their sector within Australia, while allowing the owners to stop working past 5pm on most weekdays and completely gain back their weekends.  We worked with this client over an initial period of 3 or so years. The overall effect was a more profitable, valuable business.

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Industry: Niche Retail.

Business Model: B2B and B2C – supplying products.

Established Business: 10+ years.

Reach: National.

E-Commerce Capability Pre-engagement: Quasi-E-Commerce – that is, a website that had listed products for sale, however, prices were not displayed, no payments were taken via the website and other such issues.

Business Size: Revenue of ~$3 million per annum at the start of the engagement; 5 staff. Revenue ~ $10 million towards the end of our engagement with them.

Engagements

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Engagement #1:Develop a strategic business plan using customer insights research and competitor analysis for inputs.

The business was stagnating in terms of growth. In addition, several headaches such as stock control and order fulfilment (and other process challenges) kept negatively affecting profitability.  The first engagement was to help develop a business strategy to propel the business into serious growth mode, while addressing the headaches. We conducted customer insights research and competitor analysis as part of this process.

Engagement Outcomes:

1. We began with a deep dive diagnostic to assess the business, providing a clear understanding of its current state, including challenges and opportunities.
2. Completed market research.
3. Conducted competitor analysis.
4. Using these inputs, we developed a 3-year growth strategy with the owners, highlighting several key priority areas for the business.
5. Created a tactical implementation plan from the growth strategy, detailing what needed to be done, by whom, and by when.

Engagement #2: Help implement the tactical plan with an initial focus on operational redesign and full-scale Digital Transformation of the entire organisation.

At the heart of the implementation plan was a Digital Transformation project. We guided the management team in understanding e-commerce trends, preparing them to take the next step in their business journey.

Second Engagement: ~12-months in Duration

• Conducted a business process review and re-engineered processes.
• Redesigned operations on an interim basis while technology was being developed.
• Documented website and system requirements (scoping).
• Assisted in agency selection.
• Managed the implementation project.
• Provided training and change management.

Engagement Outcomes:

We achieved a successful digital transformation, turning the business into a modern e-commerce operation. While details are confidential, key achievements include:

1. Developed and implemented a multi-layered digital transformation strategy.
2. Improved business processes, eliminating manual data entry and double handling, speeding up operations, increasing order capacity, and reducing process-related errors.
3. Seamlessly aligned customer, administration, warehouse, and logistics processes, reducing order fulfillment errors to nearly 0% and enhancing the customer experience.
4. Enabled data capture across all key metrics.

Overall Business Impact:

• Revenue increased by 75%; net profit increased by over 50%.
• Sales conversions through the website significantly increased.
• Enhanced data capture and monitoring improved marketing effectiveness, increasing ROI per marketing dollar spent.
• Despite revenue growth, headcount only increased by 0.5 full-time employee, and management no longer needed to work evenings and weekends thanks to the new systems.

This transformation resulted in significant gains, making the business more efficient, profitable, and scalable.

Engagement #3: 12-month Growth Implementation

Following the Digital Transformation, we undertook a 12-month mentoring program with the client, during which time the sales and marketing components of the growth strategy were successfully actioned. During this period, we helped the client implement structured monthly management meetings and provided them with training around all aspects of digital business management, digital marketing, and sales management.

By the end of the engagement the client had adequate knowledge to be more than capable managing the new digital business they had transformed into.

Overall outcome:

• ~3X REVENUE

• ~5X PROFIT

• Significant increase in valuation, we estimate ~6X in a space of about 3 years

We were brought back in for a further engagement lasting about 9 months a couple of years after completing the prior engagement. Today this business is one of the key players in their industry, having come leaps and bounds since our first meeting with them.