THEME: DIGITAL MARKETING
By Luise Urth Krog
That was one of the key points when LederIndsigt spoke with Peter Boris Kreilgaard, head of marketing at coop.dk. We talked about achieving success with digital marketing, how Coop differentiates itself in order to compete with competitors like Amazon and why it isn’t enough to “just” have a web shop.
Peter Boris Kreilgaard is the head of marketing at Coop.dk Shopping. When he first began working for Coop two years ago, the marketing division consisted of 3 people, and as Peter says:
- When you are three people its limited, after all, what you can do in terms of marketing activities.
Since then the marketing division have grown to 20 people. And with 20 people Boris Kreilgaard and the rest are capable of much more.
One of the things that have had the biggest impact on their success is timing. The organization have been running their web shop since 2000, approximately, but it was not until the hiring of Kreilgaard in 2014 that marketing was a serious area of effort. And according to Kreilgaard this was an important observation, because it didn't happen until then the fundamental business of the web shop was in place.
- From CEO level there was a clear belief that the sales processes were in order. Processes and systems, categories and buyers, among other things. Logistics and other things were also in place. What wasn't in place yet was the marketing division
As he says,
- It makes no sense to create a great marketing muscle before we've created our basic business.
If we want to create an efficient marketing effort there are two things we must know how to do, besides having a full marketing toolbox. First of all we need to know what is going on digitally.
- You have to know what goes on out there. What kind of tools are there, how the digital market works, how the digital advertising market works. You have to be deeply involved. It's a skill that's impossible to do without. I really value that.
The only way to find out is through hard work. You have to go out there and find all the information on the internet, on YouTube, in different digital and non-digital forums, in white papers etc. There is no other way, he says.
- This is not the old days where reading the marketing bible was enough. Kotlers book ‘Marketing Management’. Once you'd read it and understood it you were well prepared. This is no longer enough. Of course, you need a marketing background. But you must invest in having thorough knowledge about digital tools.
And this is a process that never ends. Peter Boris Kreilgaard emphasizes that even though you are doing well today, new digital tools are being launched tomorrow. And then you have to start all over again.
The other thing you must work with in order to create a successful marketing effort is your ability to think business. Peter Kreilgaard illustrates this with an example:
- If my CEO comes to me tomorrow and says: ‘Now I’ll give you 100 euros more on the marketing budget for 2017, what will you give me in return?’ Then some will answer: ‘I will create a media plan where we will be getting TV time, some digital advertising, SoMe and you will get something on print’. But this is not the answer he is looking for. He would much rather that I told him: ‘I will spend some money on an effective marketing plan. This will yield a turnover of 105 euros in year one, 107 euros in year two and 109 euros in year 10. And that gives us a profit of 22%.
So you have to view your marketing effort as a resource. As an investment.
- The most interesting thing for the CEO, is how much money do I get in return? elaborates Kreilgaard.
For Coop’s digital marketplace results have been good for the past two years. As Peter says,
- We make a nice profit. We have a big turnover and we are certainly one of the biggest competitors in this country.
A result that is strengthened by Coop’s presence both online and with physical stores. When we ask Peter whether the organization experiences that their digital platform cannibalizes their physical stores (if they lose turnover in the physical store because people do their shopping online instead, or the other way around. Also called the Omni-Channel Effect), his answer is actually “on the contrary”. Their numbers show the opposite.
- We see that people who also do business with us digitally in fact spend more money in the physical stores (..) Lots of people, when they come to collect their products in the store, also buy the products that they need for their everyday lives while they are here. So there is definitely a strong Omni-channel effect which should not be underestimated.”
But where to begin, we ask. And the answer is immediate:
- You have to start by spending energy figuring out, what do I really want? What is my strategic platform? Why am I in the market? And this is interesting – what do I basically want the customers to think of me? Why should they purchase from me?
For it is no longer enough to simply have a product or a unique service. Those days are long gone.
- Back then, where you had a unique competitive advantage in the shape of a specific brand or service, that is really difficult nowadays where amost everything can be copied/improved instantly, he says.
To stand out on the market you must focus on something different. You have to know what kind of need you fulfil for a certain group of customers.
In order to figure this out, Peter Boris Kreilgaard mentions a line of strategic questions you have to consider:
A very common mistake is to start by considering which technical solution we want to choose. And this makes perfect sense, says Kreilgaard, because those are easy to make these days.
- Well, basically I would claim that within 12 hours you can create a web shop without any skills. Because there are so many solutions out there that are plug-and-play.
- That is not the challenge (…) Those days where simply being present online gave you a competitive advantage, those days are long gone.
And there’s a perfectly good reason for that:
- Like we also talk about in coop.dk Shopping: We are competing with a lot of people. If you are in the market for a bicycle. You may browse coop.dk shopping. But maybe you are also looking in physical stores. But you might also be looking online at some nice Italian designed type of bike that you can buy in Turin (…) So we are in competition with a lot of countries, a lot of companies. All the time. So you have to stay on edge.
- There are so many parameters you must excel at if you want to be really successful at this game.
In order to manage that challenge there must be a skilled merchant behind the screen.