Debenhams operates primarily in the retail industry which is characterized by intense competition and fast changing dynamics. Presented below is an insightful discussion on the factors which provide Debenhams a competitive advantage over its rivals.
Debenhams has been one of the successful UK retail markets which has a comprehensive multi-channel presence. Especially in online market the company competes on a large scale with players like John Lewis. The company has a very clear focus on digital retail environment. According to the company digital is the engine of growth in the UK and a significant opportunity overseas. And there is no scope of doubt that in the future the digital strategy will play a major role in building brand ranges for its online customers first and then there will be focus on the store ranges based on insight from customer segmentation and online catchment profiles. The company through digital distribution now wants to broaden its customer reach by targeting a different customer demographic, who might not otherwise shop at Debenhams. As a part of this strategy it will include a big extension of its programme to include other parties to sell it products like Amazon.
In recent times when retailers have a strong inclination of giving a good buying experience for shoppers, shoppers are increasingly buying experiences rather than stuff. However amidst all this it’s clear that product is still at the heart of what Debenhams does. Keeping product in the core of is strategy it is going after the big growth categories. With high quality and diverse product offerings the company now aims to be even bigger in beauty, despite already heading towards being a £1 billion presence in that segment. The company is now targeting the larger slice of the “highly fragmented” £4 billion beauty services pie although it’s already the market leader in premium make-up and the number two in premium beauty overall. As per the company the focus is to deliver differentiated and distinctive brands, services and experiences both online and in stores which will drive customers to the stores more frequently and as a result of simplified operations it will be able to serve them better and make better use of the resources. The company apart from its regular offerings are now trying to build the brand image by investing in full-price marketing to build brands with their own brand equity and also with international appeal.
The company has various initiatives which are mainly focused to create a unique buying experience for the customers. For example the Meet me @Debenhams initiative which has services like VIP access to in-store events and diversified food and drink offers will encourage consumers to spend more leisure time in its stores The idea is to transform the store culture “being functional and reliable to make it also engaging and sociable, linking it with other services, such as personal shopping.” Technologies like trial some Click, Collect & Play departments, linking with personal shopping services are some of the other initiatives which the company is focused to crate this seamless shopping experience for customers. The objective of the company is to ensure that shopping with Debenhams should be effortless, reliable and fun whichever channel our customers use. The company is aligned to the trend that whole ‘experiences v/s stuff’ and the idea of shopping as a leisure activity.
Operational efficiency and company sales targets are a result of close collaboration between operations and marketing as compared to a high concept campaign that fails to stand up to scrutiny on a practical levels. Debenhams has employed strategies to improve replenishment time and reducing stock options de-clutter stores through direct-to-floor distribution. Strategies like single warehouse systems will lead to an efficient and streamlined supply chain which will help in maintaining a decent lead time for the company as a result will help in making products available to customers on time. Apart from this supply chain costs play an important role in product costing strategies, Debenhams having an efficient supply chain helps it to keep its costs low thus place its products at par to competitive prices.
The company’s brand value and reputation can be highly affected by how it plays in the market and what it does in the sustainability segment of the market. Be it becoming environmentally sustainable or adopting methods like sustainable sourcing companies adopt various strategies which cater to this need of the market. Debenhams offers numerous sustainability and ethically-orientated products, including 100% organic teas from the English Tea Shop. Apart from product perspective the company has a strong focus on environmental aspects as well; the company has targeted to reduce the energy efficiency by 10% by 2020. The company has partnered with an agency called TRIAD to reduce the carbon emissions, and has reduced it by 255 tonnes within 3 years. Debenhams is also a part of compliance scheme as per EU battery directives and pays a share towards battery recycling, the company also offers storage facilitates for battery recycling in UK as well ROI stores.