Rik Klercq (EK Retail): 'Data Standardization is the Big Challenge'
When it comes to retail, Rik Klercq knows the ropes. He grew up in a family of entrepreneurs and together with his brother he ran the family business set up by his great-grandfather in the northern part of the Dutch province of Noord-Holland. Now, several decades later, in his role as Director of Digital Information & Technology, Klercq uses his knowledge for the approximately 4,000 independent retailers that fall under the umbrella of EK Retail Netherlands, a European retail service organization that until recently bore the name Euretco and to which formulas such as do-it-yourself chain Hubo, sports chain Intersport and book chain Libris are affiliated. In a conversation with Marc Boumans, partner at operational consultancy Valcon, Klercq explains how he manages to get all those affiliated retail entrepreneurs to join him on his digital journey. ‘If you want to be successful in retail, you need to get your technology right.’
You grew up in a 'retail family'. What knowledge from that era is still useful in your current role?
‘I learned that you do not have to work everything out in detail. The most important thing is to try things out and continue learning. Start small, and if it does not work, try something else and keep going. If it works, expand it. This pragmatic way of working, or ‘trial and error’, is something I am trying to incorporate into my current work. I have also learned the importance of factoring in the expertise and personalities of the people I work with. I try to find out what people are passionate about and I try to play to everyone’s strengths.’
To what extent has the retail sector changed over the past few decades?
‘The funny thing is that in essence, nothing has changed at all. Retailers are still busy serving clients and maintaining client relationships as effectively as possible. How do you approach clients, how do you ensure they choose you and how do you make sure they come back to you? Attract, serve, retain and stay relevant – that was and still is the core of this business. But extreme changes have taken place within the entire environment. Nowadays, you have to be everywhere at the same time: Both physically in stores and on all channels through which the client could possibly come into contact with you. 15 years ago in retail, technology was something that was nice to have, and now it’s become essential and a top priority. If you want to be successful in retail, you must have the right technology in place.’
What’s the biggest challenge, in your opinion?
‘The biggest challenge now is to use that same enthusiasm, expertise and persuasiveness that retailers have on the other channels, to empower them and to support them where necessary. Both in stores and online. There is still a lot of work to be done. In this sector, the digital side of things is still too often reduced to just a website and a web store. That is not enough.’
Do you know your clients well enough?
‘Of course, as a retail organization we are in constant dialogue with our retailers, so we can listen and establish new and existing end consumers’ needs and how we can meet them.
The retailer's clients can be divided into two groups: Emotional clients and transactional or rational clients. The latter know exactly what they are looking for. They have been running for years on the same Asics shoe and after a while they want exactly the same model or an improved version, against the best conditions and the best price. Emotional clients have also been running on Asics for years but are also interested in what else the market has to offer. What are the trends? Which shoe best suits my running style? What are the product stories? Those clients needs guidance and advice. Emotional consumers are the consumers we and our affiliated retailers want to serve. That is where we can add value.’
And how do you ensure that the client chooses your stores in 2022?
‘That is the big challenge. To answer that question, I keep coming back to the old, familiar retail game: Making the right offer, approaching clients, attracting and serving them. That is what we did then and what we continue to do now, only in lots more ways. So we try to convey the same enthusiasm and persuasiveness online as we do offline. Although there are – of course – differences between the various sectors, such as sports and fashion or DIY, the concept is the same. It always starts with the product and relevant content that stands out. It sounds like a cliché, but that is how it is. No story no glory. It goes beyond ‘picture-price’ and a bit of text.’
How do you make your platform stand out from other providers?
‘What makes our retail entrepreneurs unique is that they have a local presence. Our entrepreneurs know their clients and vice versa. The owner of an Intersport store also supports their local soccer team on Saturday mornings and has connections with the clubs and the community. Large online companies do not have that, which is exactly why we stand out. We believe very strongly in local ties. That is what our affiliates stand for.’
How can you monetize that edge? Do you have an example?
‘Our entrepreneurs within Libris are a good example. They write their own reviews for the books they sell. The in-store specialist then gives their personal opinion about a book: They have their own story. It seems a small detail, but it makes a world of difference. A personal review is unique content and therefore worth much more than the standard text given by a publisher or newspaper review that every store can access.’
At EK, you are now dealing with a large community of diverse retailers who will also have their own views on what does and does not fit digitally. How can that be managed?
‘That is a journey that takes many years. Of course, initially there was also skepticism about our facilitating role, or an attitude of “we will see”. But the coronavirus pandemic in particular has accelerated things enormously. In the years leading up to it, we had to do a lot of missionary work in order to convince retailers, but when stores closed due to the lockdown, I did not need to do much in order to convince retailers to become members so that we could support them in setting up a strong online proposition and in matters such as delivery and a good supply chain. And then the phone calls suddenly started coming: “Rik, we want to join your platform now.” Covid was a huge push. The pandemic has fundamentally changed the sector. For example, we used to supply 80% of goods from central warehouses and 20% locally. That has been completely reversed: We now supply 80% locally and 20% centrally. In that sense, the involvement of local entrepreneurs has increased tremendously.’
That is actually a contradictory trend. Lots of parties actually want to centralize the supply chain in order to lower the costs...
‘It’s mainly about creating the ideal mix and efficiency. How do you organize your company so that it works best from a sustainability and cost efficiency perspective? For example, local delivery initiatives emerged during lockdown. Why wait a few days for PostNL if an entrepreneur’s son has a scooter? At first, you really wonder how you are going to organize it digitally. What are we going to do with Track and Trace? But on the other hand, clients appreciate it enormously, so let it go. Technology is a concern for later.’
You now have many formulas, from Hubo through Intersport to Libris. Can you serve them all in the same digital way from your department?
‘Our formulas do indeed stand out at the front, with their own identity and marketing proposition. At the back end, we mainly try to look for similarities. Each formula needs a product information system, each formula needs a payment service provider and each formula needs to organize parcel delivery.’
So is that a matter of copy and paste?
‘If only that were true, we could have gained even more speed. Ultimately, these are all complex integrations, each with their own challenges, but at least we do not have to reinvent the wheel each time. We can use the experience and knowledge we gain from one platform for another.’
Currently in your work, a lot depends on the axis of data. What are your biggest challenges in that area?
‘It is notable that there are large differences between the sectors in which we are active with EK. Each sector has its own stage of digital maturity. The book sector is much further advanced than the housing sector, which is still organized along fairly traditional lines. These different stages of maturity automatically bring different data challenges in each sector. In fashion, much can and needs to be done in terms of content enrichment and setting the right standard for the sector. That is actually the great overarching challenge – data standardization.’
At EK, you have chosen to involve IT more in daily business operations. Why is that?
‘It always clashed a bit between the digital people with the big digital innovative plans and the IT people. They were two separate worlds. Traditionally, IT mainly wants to maintain and manage processes properly – it is a bit conservative, safety first and all that. On the other hand, there also needs to be room to experiment and innovate within the company, and quickly try things out. That makes IT people a little nervous. By bringing these two groups together, the entire process becomes a joint responsibility. It was an immediate win-win. From both sides, there is more consideration for what is needed and how we can or cannot embed it into current operations. You trigger both groups to think about each other's scope, exchange knowledge and share experiences. It creates a common agenda and ensures that you take action together. Before, that was very different. By embracing user-friendly techniques such as citizen IT, we have also secured much more of the mutual connection. We can now experiment without it immediately having major consequences.’
If you had to do that whole digital operation all over again now, what would you – given today's knowledge – do differently?
‘I would bring the front end and back end parties together sooner. Both parties need each other in order to be successful. I would also focus more on data. How can we best organize and standardize data? Previously, the order was not always quite right. Then we started working on innovation, while we did not have the basics right. We had built a great web store, only to realize that we actually had no content at all. Our most important lesson from recent years was that the first question should be about what you want to convey to the client. What is going to make the client feel enthusiastic? How can you attract the client? Just like it used to be, really.’
What can you contribute digitally in terms of sustainability?
‘We have already taken several initiatives in terms of delivery, for example. We can make deliveries using bicycle couriers, or the client can collect products by bicycle from the local retailer. We are also working to reduce the number of returns. Most returns in the fashion and sports sectors are returned because the size is incorrect. There is still much that can be improved, for example by using smart size tables or 3D scans so that the client can literally find the best fit.’
Will the physical store still exist in five years?
‘Of course! Even large online companies like Coolblue and made.com see the importance of physical stores nowadays. But physical presence will always need to be accompanied by a strong, active online presence. We believe that combination to be key to a successful business. You buy a pair of jeans online and you pick them up from the fashion store the next day. And the sales assistant will have picked out a nice jacket or shirt for you – based on your previous orders, of course.’
Where do you hope to be in terms of digitization in five years’ time?
‘In five years' time, the basics really need to be in order. And what I mean by that is data and streamlined processes. Once we have that in place, we can free up even more time to provide added value, enrichment and innovation. In five years, a 360-degree client view should be the standard. We will be more relevant, because we will approach clients in a more personal, i.e. more targeted, way. If I always buy blue pants, retailers should not send me a mailing containing red jackets. That would miss the point. As a client, I want to receive a targeted offer containing promotions that are relevant to me. Technology will take care of that.’
This article was published in Management Scope 08 2022.
This article was last changed on 28-09-2022