Digital Transformation Project – Royal FloraHolland

13

October

2016

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Royal Flora Holland (RFH), the world’s largest flower auction, is one of the most traditional Dutch businesses in operation and with Information Technology becoming a vital part within every industry, RFH’s need for transformation has become evident.

The analysis provided in our video highlighted the problem faced by Royal FloraHolland (RFH) currently: the company is losing market share to direct trade whilst also not making an efficient use of their costly assets. These problems result in two main challenges for RFH.
The first challenge is related to the constraints imposed by the auction system. Traders have to be present at fixed times and their final trade value is uncertain. As RFH is a multi-sided platform, it brings together two interdependent groups of customers: growers/suppliers and buyers. The platform is only valuable to one party if the other is present and vice-versa. The loss of large buyers is thus a threat to the long-term survival of RFH. The second challenge, the inefficient utilization of RFH’s assets. This relates to another aspect of the auction system, the short trading period. The fast-paced rhythm imposed by the short trading period leads to all facilities only being used at full capacity during four hours per day and further requires costly contract workforce. Our transformation shall:

1. provide an efficient way to elicit prices that are attractive to both buyers and suppliers
2. attract more growers and buyers by better responding to their needs
3. increase RFH’s global market share
4. place IT at the forefront as a strategic tool to foster innovation and change

Our solution involves RFH developing an online platform accessible to both sides of their network. The platform will hereafter be referred to as “RFH Marketplace”. Growers are able to sign up for the RFH Marketplace and will be certified by RFH. After they passed the one-time certification they can show their products on the online marketplace and decide on their own prices. Products can be traded from the moment the seller publishes his products on RFH Marketplace. These could be a batch of flowers still growing at the farm or flowers already being taken out of the farm. The RFH Marketplace shall enable the growers to connect to the RFH marketplace with their own ERP. The RFH marketplace will also incorporate an online community where forums will be available as well as a news sections relevant to growers. Growers will be able to exchange ideas, solutions and even opinions online. Looking at the long term, RFH could take on an even more digital role to further integrate in an electronic market. There are also other avenues that RFH could take, such as:

– a marketplace with large stocks to provide fast delivery of flowers and plants in stock,
– increase its offering by providing logistics services either inbound, outbound or both
– become a fully-digital company with no more physical activities.
– A copy of the data analyses service which the Global Dairy Trade provides.

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Food Ink: investigating the world’s first 3D printing restaurant

20

September

2016

4.92/5 (12)

On July, 25 of this year Food Ink opened its doors at Dray Walk in Shoreditch, London for the very first time, thanks to its founders Antony Dobrzensky and Marcio Barradas. Food Ink occupies a strong market niche by putting to work the most innovative technologies, like 3D-printing and augmented reality, in order to present the most exquisite interactive edible experience. At the restaurant not only the food, but all furniture (tables, chairs and lamps), utensils and decorations are the product of 3D printing. The restaurant operates utilising talent from various, international areas of: Architecture, Arts, Cuisine, Design, Engineering, Futuristic, Innovation and Technology. Their mission is to be revolutionary and offer an opportunity where one can “taste the future today”. Food Ink’s founding partner “byFlow” is the inventor of the world’s very first “portable multi-material 3d-printer”. These easily exchangeable printer-heads make it possible to print with over 20 different materials and are 64% faster than the average 3D printer meaning you may start printing within 5 minutes. Wall-to-wall visual projections of 3D-printing in combination with AI-composed music provide an immersive environment and a thrilling glimpse of the future. However, the price to pay, to be able to enjoy this unique 9 course meal journey is £250 a head.

Already since the 1980ies, has 3D printing, where a physical object is ‘printed’ from a 3D digital model, been under development. This technology has been rapidly evolving over the last 10 years. Digitally printed food is “the new frontier”. Today, 3D printers are capable of for instance, producing colourful types and designs of candy. Recently, 3D printing has also been introduced into grocery store culinary circles to masterfully print out “designed desserts”. Evidently, 3D technology is continuing to develop and in the future may transform the food industry immensely. By definition, innovation involves disruption. 3D printed food is merging the “demography” and also “culture of convenience”. From fast moving Millennials, to Boomers who search for a hassle-free lifestyle, 3D food printing may not merely change how we eat, but how we purchase what we eat.

Moreover, traditional grocery stores may also feel the change resulting from 3D printed food. In a world of special diets such as: gluten-free and lactose-intolerance, 3D printing may revolutionise the lives of people affected by such constraints. Customised and prepared foods through highly capable printing services at grocery stores may become the new normal. Until everyone has a 3D printer at home, grocers might collect customer’s personal dietary and nutritional information via custom web-portals or customer’s wearables (insulin pumps for diabetics etc.). Imagine recipes informed and personalised through these devices. Amazing, right?

However, in the case of Food Ink, critics have raised the question why anyone would want to pay £250 for food pastes and plastic cutlery. Visitors at Food Ink experience a 9 course meal, produced via live 3D-printing. Yet, details regarding the ingredients of the menu are strictly confidential. Moreover, the 3D-printer used by Food Ink can only process materials as pastes. Sasha Mather (Communications Director of Food Ink) has said: “Meat is tricky to print for sanitary concerns and in terms of generating a genuine texture or ‘mouth feel’.” This limits the types of meals that can be printed, which might be a reason why the founders of Food Ink brought in professionals of the molecular cuisine: Joel Castanye and Mateu Blanch, the former chefs of the famous restaurant “elBulli”.

Personally, I would never pay £250 for a 9 course meal, including limited types of food that can be printed. Even though, the whole experience of being at the restaurant does sound intriguing, I do think there are better and more appropriate uses of 3D printed food. For instance, in space, 3D printing has been used to transform astronaut’s diets. Being able to print food in a way that it exactly contains certain amounts of particular nutrients may also serve as an extremely favourable innovation for people with special dietary needs and/or allergies.
What do you think?

References:
http://www.dailymail.co.uk/sciencetech/article-3685998/Is-future-fine-dining-Restaurant-food-table-3D-printed-cost-250-head.html

http://www.archdaily.com/790985/food-in-is-the-worlds-first-3d-printing-restaurant

https://3dprintingindustry.com/news/food-inks-london-launch-futuristic-frenzy-90048/

http://bigthink.com/disruptive-demographics/from-printer-to-plate-how-might-3d-food-printing-transform-the-grocery-store

http://www.3dbyflow.com/

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Sephora and Social Commerce – “doing things a little differently”

10

September

2016

5/5 (6)

Sephora is an American beauty brand and cosmetics retailer and also an innovative global business which has been known to “do things a little differently”. The launch of Sephora’s website occurred already in 1998, allowing them to operate as an early player within electronic commerce (Bornstein, 2014) and later also social commerce.

Social commerce is the combination of e-commerce and social media. It is a term often used to describe new online retail models or marketing strategies that incorporate social networks and/or peer-to-peer communication to drive sales (Indvik, 2013). The global social commerce market has an estimated size of $30 billion (Euromonitor, 2015). Moreover, it shows impressive growth potential of almost 200%
(Smith, 2015). It was forecasted to represent 5% of online retail revenue in 2015 (Morison, 2014) and expected to grow further. Social commerce offers a unique approach by disrupting traditional marketing taxonomies of bought and owned media. With this new, “earned” concept, customers are no longer customers but rather become “fans” of the brand. Although, these new social media outlets (SMOs) have a somewhat narrow reach and a somewhat homogenous audience, they offer an immense business opportunity. This development constitutes a completely new customer relationship for businesses, which they need to learn to develop in order to leverage the great potential offered by the Internet and social commerce especially. In fact, this potential goes beyond basic user acquisition. It creates a soil for more cost effective R&D, customer service and data management. Data generated and measured through social platforms can, in turn, be leveraged for future marketing efforts and product launches.

In 2012, Sephora released an application, optimising mobile sales leading to a 167% increase in orders, which now accounts for approximately a third of mobile traffic. The most important and best developed parts of the website were incorporated in this application, allowing for an improved and unique customer experience ultimately leading to increased sales and customer loyalty (Cameron, 2013). Sephora’s revenues were €1.94 billion in 2012 (Sephora, 2016). In 2013 these revenues, according to Forbes, increased up to over $4 billion. This is said to be due to the launch of Sephora’s online store, currently serving approximately 1700 store in 30 countries in the whole world (Loeb, 2013).

In 2010 the Sephora team developed a platform called “Beauty Talk” where customers could engage with each other, whilst remaining anonymous and safe (Ofek & Berkley Wagonfeld, 2012). The interest in the platform was high from the beginning. Yet, the Sephora team wanted to encourage users to share their knowledge and experiences more and, thus, they created a “leaderboard” with 35 levels ranging from newcomer to beauty master, depending on the amount of a user’s posts. Upon registration for the “Beauty Board” users register an account and build a highly personalised profile based on their demographics and preferences. This generated data is one very important outcome of implementing social commerce models (Mau, 2013). With the help of the personal data, Sephora gains access to entirely new opportunities of customer interaction. Firstly, this personal data allowed the company for more specific personalisation of their products, the shopping experience for their customers, and their marketing efforts. Hence, social commerce empowered the delivery of personal brand experience (Tode, 2016). Furthermore, the collected personal information transforms anonymous customers into recognised entities. Once individuals are entities, marketing strategies can be personally targeted to each individual customer. In fact, data collection assists Sephora in enriching the user’s experience with the brand. Additionally, big data grants the entity complete control over the online customer experience. Next to the ease and comfort within product search and selection due to personalisation, the company can establish a close trust relationship to their customer base.

The platform was developed in collaboration with a company called Lithium. According to Lithium’s chief Michael Wu, the platform has over 400 metrics, which are being used to track users’ engagement. This reaches from content engaged with, up to the general behaviour on the platform of the user. Sephora, thus, gains knowledge about customers’ social relationships and preferences concerning their purchasing (Ungerleider, 2014). Hence, Sephora also understands how to utilise their customers in a way that they and also Sephora, itself, retrieves maximum utility as explained by Bridget Dolan, Head of Digital at Sephora: Consumers are “the best sales people we have in our stores because these women really know about beauty – they really love it” (Fiorletta, 2014).

The resulting social network enabled Sephora a whole new way of customer service: peer-to-peer reviews. They gained more accurate problem descriptions and frequently asked questions. Moreover, they were able to recognise and react proactively to developing trends. These inter-customer reviews do not only save manpower for Sephora, they can also give access to new ideas and methods. As a result, they can offer higher quality customer service to other channels (Tode, 2016). It is important to mention that Sephora did not stop their online efforts after implementation of their own social media sites. They continue their role as an early adopter and are, thus, able to tap into new opportunities as soon as they come up. What do you think?

 

Bornstein, J. (2014). How Sephora Reorganized to Become a More Digital Brand. Harvard
Business Review. [online] Available at: https://hbr.org/2014/06/how-sephora-reorganized-to-become-a-more-digital-brand/

Cameron, M. (2013). Sephora’s World Leading Digital Platform. The Social Media Monthly. [online] Available at: http://thesocialmediamonthly.com/sephoras-world-leading-digital-platform/

Euromonitor, (2015). Internet Retailing in Germany. [online] Euromonitor. Available at: http://www.euromonitor.com/internet-retailing-in-germany/report
Fiorletta, A. (2014). Sephora Drives Advocacy With BeautyTalk Program. [online] Retailtouchpoints.com. Available at: http://www.retailtouchpoints.com/features/retail-success-stories/sephora-drives-advocacy-with-beautytalk-program

Indvik, L. (2013). The 7 Species of Social Commerce. [online] Mashable. Available at: http://mashable.com/2013/05/10/social-commerce-definition/#AeP5T.YaSOq7
Lithium, (2015). The Sephora story.

Available at: http://www.lithium.com/why-lithium/customer-success/sephora

Loeb, W. (2013). Sephora: Department Stores Cannot Stop Its Global Growth. Forbes. [online] Available at: http://www.forbes.com/sites/walterloeb/2013/04/18/sephora-department-stores-cannot-stop-its-global-growth/#33a34332286f

Mau, D. (2013). [online] Fashionista.com. Available at: http://fashionista.com/2014/03/sephoras-social-shopping-platform-is-here

Ofek, E. and Berkley Wagonfeld, A. (2012). Sephora Direct: Investing in social Media, Video, and Mobile. 1st ed. Cambridge: Harvard Business School, pp.2-24.

Sephora, (2016). About Us | Sephora. [online] Available at: http://www.sephora.com/contentStore/mediaContentTemplate.jsp?mediaId=10800104

Tode, C. (2016). Why brands could own social commerce, not the big platforms – Mobile Marketer – Social networks. [online] Mobilemarketer.com. Available at: http://www.mobilemarketer.com/cms/news/social-networks/17474.html

Ungerleider, N. (2014). How Sephora Discovered That Lurkers Are Also Its “Superfans”. [online] Fast Company. Available at: http://www.fastcompany.com/3035236/how-sephora-discovered-that-lurkers-are-also-its-superfans

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