DIGITALTRANSFORMATION IN RETAIL - CASE
STUDY - DUVAL UNION CONSULTING Mastering DIGITAL disruption WITH TORFS

Duval Union Consulting Duval Union
Consulting is a consulting company for a new digital world. We help our clients with their long term Digital Transformation, yet also provide them with all the necessary strategic advice to deal with Digital Strategy, Social Media and day to day Marketing challenges. Duval Union Consulting is based on the foundation of DearMedia and Youmen. DearMedia was created in 2009 by Jo Caudron & Dado Van Peteghem. They grew the company into a team of 8 consultants and in 2015 they decided to become the heart of the Duval Union ecosystem. Youmen, founded by Frederic Vanderheyde & Carole Lamarque, was integrated in the Duval Union Consulting company soon after, to grow the Innovative Marketing expertise. DUC on LinkedInDUC on Facebook DUC on Twitter DUC on YouTube Our Blog jo.caudron@duvalunion.com - dado.vanpeteghem@duvalunion.com - carole.lamarque@duvalunion.com - frederic.vanderheyde@duvalunion.com More info: www.duvalunionconsulting.com

Duval Union Consulting A consulting
company for a new digital world Through a series of workshops we help you to understand digital disruption and offer you a model to shape your own future. GET MORE INFO > DUVALUNIONCONSULTING.COM Need help? Digital Transformation Modeling A model to master digital disruption A book on digital transformation for you to understand and act upon digital disruption. Through the book we share our vision and approach. BUY THE BOOK > DIGITALTRANSFORMATIONBOOK.COM

Belgian retailer Torfs and Duval
Union Consulting worked together to design a digital transformation strategy for the company to master disruption by new players like Zalando. When setting out the (digital) business strategy for the future of your company, it’s key to find answers on the following three questions: 1. What is happening right now in the world and in retail? The world is fundamentally changing, and so is the retail industry. Knowing what causes these evolutions is fundamentally important, the same way as it is to measure the impact of the disruption on your business. We’ve summarized the biggest trends in retail for you to evaluate your current position and the impact of digital disruption on your business. 2. What will happen in the coming years? Once you know what is happening, you need to plan ahead by describing possible future scenario’s and the position of your company in these storylines. For Torfs, we’ve written 4 possible scenario’s and labeled the ‘most wanted’ and ‘most likely’ ones. 3. What are we, as an organization, going to do? In this phase, you’re going to conduct a plan or strategy to master the threats alongside your way: You need to describe the transformation mission, vision & strategy, which will be your guide towards the future and the best way to validate any (digital) business idea. But it doesn’t stop there. To ensure that your organization survives the digital future, you’ll really need to implement ‘digital’ in the core, develop digital leadership and constantly monitor future trends. It seems like there’s a lot to do, and there is. But this is not insurmountable. Start today, give change a chance and disrupt yourself. Before somebody else does. Mastering disruption in retail “The internet is not a friendly place. Things that don’t stay relevant don’t even get the luxury of leaving ruins. They disappear.” - Facebook’s Little Red Book

1. Schoenen Torfs “Substance, approach
and especially style made Jo Caudron and his team the perfect fit for this project with us.” - Barbara Torfs, Director of Marketing & Communication Torfs Torfs is a a Belgian retailer in shoes. The organization has more than 70 stores in Belgium. The company originates from the end of World War II. After a period of selling shoes on the marketplace in Mechelen, founder Karel Torfs decided to start Schoenen Torfs in 1948 and opened four stores together with his wife. The company went from father to son and in 1986, Wouter Torfs (son of the third generation) came in play. Under his charge the family company grew out to become an established retailer in Belgium, best known for its family values and motivated employees. Therefore, Torfs has been elected Best Employer & Best Workplace in Belgium several times.

2. Challenges Retail companies have
quite some challenges with the way the world is (rapidly) changing due to digitization. That’s why Torfs & Duval Union Consulting have worked together to set up a strategy to master the digital transformation of Torfs. On the following pages, we discuss the current market situation and disruptive trends in retail based on our seven Drivers of Transformation. It’s fundamental to understand what is going on at the moment in the retail industry, where it is going and identify critical threats when constructing a digital strategy towards the future. Waves of Digital Disruption After 20 years of online activity, the world is realizing that digital technologies are changing the way we do business. 1995+ Music Photography Video Rental … 2010+ Print Media TV Travel HR … 2015+ Banking Healthcare Automotive Retail Education Telco … 2020+ All Safe havens will be subject to digital disruption …

Retailers need to become more
transparent towards consumers. There is a high demand in taking greater responsibility. The distance between consumer & company is getting smaller and these consumers demand a greater responsiveness of retailers. Communication with clients happens bi-directional due to social media, resulting in the thriving of humanized organizations. At last, authenticity has never been more important than today. 2.1. Glass House // Retailers are becoming glass houses

2.2. Package // Providing experience
is becoming the norm Competitors are ‘unbundling’ or ‘rebundling’ their supply. New players are attacking traditional retailers and we see a tendency towards ’appification'. There is an immense long tail in retail due to the widespread digitization. We see that people want more personalized products and that ‘buying’ in general has become an experience. Speed is elementary: not only did it become a differentiator but it raised the overall expectation of consumers. We just want things here & now. Price is still a big differentiator, offline and online. We see that disruptors also bet big on (self)-service. At last, traditional players lack the scalability that new players do have.

2.3. Frog // The entire
value chain is changing Bypassing is a strong disruptive force in the retail industry. All the elements in the value chain are switching places rapidly: We see manufacturers building their own sales channel, retailers becoming producers and even consumers becoming shops themselves. Traditional (offline) services are becoming more virtualized in an online environment. Customers have far more options because of the huge fragmentation of touch points. The human factor will always remain important, but the combination of online & offline top experience is becoming the standard. If you can sell expensive cars online, you can sell anything online.

2.4. Gatekeeper // New experts
are taking it up a notch Not only traditional partners are becoming bypassers: New gatekeepers are changing your position in the market as well. We believe that ambassadorship marketing is the way to go, also for retailers: employees and customers are important (and probably the best) ambassadors for brands in retail. Never forget that people tend to buy what is being recommended by peers. We’re seeing a ‘good is good enough’- attitude growing amongst your clients. Snapchat for instance: communication that is good, real but not perfectly crafted! TRADITIONAL GATEKEEPERS Crowd-sourced opinionsPeers as news distributorsAutomatic algorithmsNew “experts” + + + +

2.5. Traveller // Mobile shoppers
are smart shoppers The ‘location of retail’ is shifting vastly from local towards online & mobile. Smartphones make the process of consuming much easier. People are becoming an empowered self due to mobile technology: e.g. testing the product in-store & buy it with their smartphone on Amazon. We’ve always wanted instant gratification, but with the mobile evolution, everything has changed rules: We want everything here & now. Besides that, we see a new way of working: for your employees and your customers. And mobile ecosystems are introducing contextual awareness: A mobile shopper is a smart shopper.

2.6. Participant // Harder to
drive retention in a Peer 2 Peer Economy Communities have always been valuable for retailers but it’s only now that brands acknowledge their importance: it’s a great way to drive loyalty. That’s why we see gamification being introduced in retail. Digital technology is making it easier for consumers to collaborate amongst each other and/or with their favorite brands. But we also see that new players are using the (financial) power of the crowd to kickstart their ideas and that the sharing economy is changing the world forever. As digital we’ll get, ‘human’ will always remain important - but in a digitally facilitated way!

2.7. Cyborg // The long
tail is hurting the retail industry On the one hand we’re seeing that retail is becoming smart(er) because of the Internet Of Things, but this could bypass the traditional players on the other hand (e.g. sensor-based passive buying). Wearables are becoming more & more mainstream and are making people quantified selves, which consume in a different way. Robotics are improving (the efficiency of) logistics in retail, smart ‘big data’ is playing a bigger role than ever in retail and consumer monitoring is being implemented at light speed. The future is near. Don’t you think?

RETAIL 2020 OFFLINE & ONLINE
PROXIMITY FRAGMENTATION, UNBUNDLING & NEW FORMULAS NEW BUSINESS CONCEPTS OFFLINE & ONLINE EXPERIENCE PERSONALIZATION, AUTOMATIZATION & BIG DATA BRANDS NEED RETAILERS RELATIONSHIP WITH CUSTOMERS The retail industry is moving towards a world… … where online retailers explore the offline world & vice versa. … with a lot of fragmentation, unbundling & new retail formulas. … where brands still need retailers to effectively reach consumers. … where retailers are providing customers with online & offline experiences. … where new business concepts of retail thrive. … where retailers can maintain & reinforce the relationship with the customers. … where digital players invest in automatization, personalization & big data. 2.8. The challenges for Torfs & other traditional retailers

3. Solution To kick off
the digital transformation of Torfs, detailed insights and understandings about what is happening in and beyond the world of retail today were needed. This phase of the transformation was inspirational and opened the eyes of the stakeholders of the company. An impact analysis of the Drivers of Transformation on Torfs was conducted to assess the possible change to their business as triggered by digital transformation. We then predicted future scenario’s for the Key Transformation Areas of Torfs to understand the possible futures and making them visible for all stakeholders. Together with Torfs, we’ve brainstormed about business ideas for the company considering the designed scenarios and the (position of Torfs in the) future of Retail and mapped them on a realistic digital roadmap. After any digital transformation project it is needed to monitor all new trends and keep our eyes on the possible scenarios to make sure that Torfs is able to change course in a fast but well thought way, which is aligned with the business strategy of the company. 3.1. Our approach - Digital Transformation Modeling

3.2. The outcome of the
Digital Transformation Modeling approach LONGLIST BUSINESS IDEAS does it contribute to our own strategy? does it solve real problems? is there a business case? launch on the mothership or start a zodiac? SHORTLIST VALIDATED BUSINESS IDEAS DIGITAL AGENDA Every new business idea passed ‘the digital transformation funnel’, which we have created together with Torfs, to ensure that it will contribute to the strategy of the company’s transformation and solve a real company/market problem. If the proposed project did fit in the digital strategy and potentially solved a real problem, business cases were set up and decided whether the innovation should be set in place by the company or a corporate startup of the company. The validation process led us to a shortlist of business ideas, which were then prioritized and organized: the digital agenda of Torfs was designed.

3.3. The future of Torfs
Looking at the trends, learns us that Torfs already has built up some strengths over the years. The organization has always been doing well in terms of being transparent, accountable and a human company. Combining these elements of The Glass House with offering a great service, results in a strong network and a good relationship with the customers. Despite these upsides, we’ve found that Torfs is still facing numerous challenges to compete with new, digital (and disruptive) players in retail such as Zalando. The company will need to take relatively big steps, however we see that Torfs will be able to make the leap forward and transform successfully towards a hybrid company where digital innovations and traditional values meet each other halfway. Offering digital experience & the traditional values in the offline world and a top-notch user experience in the online webshop is the way to go for Schoenen Torfs.

3.4. Torfs on Digital Transformation
Modeling “Starting today, everything will change. All colleagues - regardless of levels, departments and structures - will work together in new and different ways. Open, forward-looking, no-nonsense but keeping both feet on the ground.” The best is yet to come! - Barbara Torfs, Director of Marketing & Communication “Duval Union Consulting managed to align the members of the entire management team in our digital transformation. This project was a unique experience, which resulted in a shared vision of the management. Initially only a handful of believers truly led the digital transformation project internally. Because of the workshops, however, the transformation mission has secured and gained widespread support throughout the company. We’re fully convinced that this support is an absolute must to really set things in motion.”

What’s your move? The time
is now… Digital and online services are evolving at an unseen speed. After 20 years of online activity, digital technologies have fundamentally changed the way we live, work and play. And this is merely the beginning. All of these evolutions have a huge impact on our lives. And on the way we do business. Digital is disruptive. Unfortunately several industries and companies didn’t anticipate the digital transformation and “lost the game” along the way. Most companies lack a solid plan of ‘defense’ to cope with the digital transformation. And we’re running out of time. In order to stay ahead of the new players and to keep up with the transformations in the market, traditional businesses need to get prepared in a structural way. We have reached a stage where ‘digital’ and ‘online’ are no longer a gimmick at the sidelines of the business activities. Digital is actually transforming the very essence of business. It moved from the sidelines to the core, from online tactics to business strategy. Because disruption is happening so fast, we believe that the time is now for organizations to transform their businesses for the digital age. What’s your move? “Everyone has a plan, until they get a smack in the face.” - Mike Tyson

DIGITALTRANSFORMATION IN RETAIL - CASE
STUDY - DUVAL UNION CONSULTING Mastering DIGITAL disruption WITH TORFS