Wednesday, March 18, 2015

How The Fnac Succeeded by Embracing Multi Channel Retailing

Radio Classique had a very interesting radio show on February the 28th about the Fnac and how the retailer succeeded to transform itself to thrive in the new high tech world. 

Indeed, the Fnac had to face the very same challenges both electronics and cultural goods retailer had to face. The challenges that made companies like Barnes & Nobles or Radio Shack hit the grown lately.

Indeed, the concept of Fnac is to spread culture both by medium (show tickets, but also TV, radio, PCs, cameras...) and by art itself (CDs, books, DVDs, Video Games, etc...). When both of those categories where hitted hard by Ecommerce, a lot of people were questionning how the retailer could compete with its new environment. 

Indeed, it seemed difficult to compete with Emerchants, who were able to have large product range, aggressive pricing, and foremost could deliver customers home.

After 4 consecutive years of declining sales, the Fnac delivered a 41 millions € profit. 

How Did The Fnac Managed To Overcome Those Challenges?

As the narrator says, the fnac has set up a strategy and was able to implement it successfully, which is easier said than done. It succeeded in blending its brick & mortar retail network and its Ecommerce website to secure a smooth customer experience. And it was difficult. I remember when I used to work at the Fnac back in 2005, the after sales service used not to deal with goods bought online, as it was an activity which did not come from the store (it seems ackward, but trust me, still nowadays, a lot of store networks react like that). Both the Ecommerce and the brick & mortar departments were at war.

The store people are now incentived on the online results, which helped people to understand the interest to have a strong online presence. Hence, retailers should understand and embrace the transformation of commerce, and not try to hide it by giving to retail network goals that are inachievable as they don't take into consideration the rise of online purchasing.

As Georges Plassat of Carrefour says, brick &  mortar retailers have an edge on Ecommerce companies: they own a store netwok.

One of the other key factor of success is its brand equity, which relies on a high shopping experience, with a strong loyalty reward programs, which people appreciate.

The Fnac should be considered as a modell worldwide of an electronic goods retailer which thrive during the e-commerce era.