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Omni-Channel Transformation Swimming against the Culture Tide and Transforming an Entire Business hybris Game Plan 2014 4 November 2014

Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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When we hear the term “Digital Transformation,” we often think of technology…of systems…and processes. But the foundation of digital transformation is often more about culture change than technology. No one knows this better than Heritage Foods Group executives Damon Childers and Bryan LiBrandi. Hear their inspirational story about transforming a deep-rooted culture adverse to change; about swimming against the tide, and leading an entire organization from outdated business models to the forefront of innovation. Gain insights into their battles and challenges; their revelations and ultimate victories – victories that led not only to the launch of what is now a thriving e-business – but a whole new culture of innovation.

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Page 1: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Omni-Channel TransformationSwimming against the Culture Tide and

Transforming an Entire Business

hybris Game Plan 2014 4 November 2014

Page 2: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Omni-Channel Transformation

Introductions

Damon Childers EVP and President of eCommerce

Bryan LiBrandi SVP of Strategic Marketing

Page 3: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

Omni-Channel Transformation

Leads

to Creation of

HeritageParts.com

Page 4: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Omni-Channel Transformation

Founded in 1987

Heritage Foodservice Group is the largest distributor of replacement parts for commercial kitchen equipment

Rapid growth filled a market void; Heritage posted +20% year-over-year revenue increases for the first 25 years

Page 5: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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The Foodservice Industry

Single source replacement parts provider for more than 800 OEMs of cooking, refrigeration and dishwashing equipment

Serve widely diverse customer categories with over 1.2 million commercial kitchens in the U.S.

Omni-Channel Transformation

Independent Restaurants

Restaurant Chains

Hotels

Cruise Lines

Amusement Parks

Schools

Universities

Corporate Offices

Hospitals

Nursing Homes

Corrections Facilities

…and more

In most cases, the service tech “turning the wrench” is our customer

Page 6: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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We are B2B, but we are really retail:

+120 Customer Service Representatives in call centers in U.S. and Canada

Our parts specialists help customers identify the right part and make sure the part gets out the door

We serve customers one part at a time:

1.4 parts / order

$260 / transaction

Omni-Channel Transformation

Service Branch LocationsParts Warehouse LocationsFW HQ & Main Warehouse

Page 7: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Change Management

On December 1st, 2011, Heritage Food Service Equipment was acquired by private equity, The Jordan Company

The previous rapid sales trend had flattened, but management believed there was much more room for growth

A new management team was put in place to take the company to its next level in growth and performance

Omni-Channel Transformation

Page 8: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Our Strength and Our Weakness

Previous ownership believed introducing eCommerce would weaken Heritage’s value proposition of Best-in-Class Call Center

Personal service was the backbone and culture of the company

Sales, service, customer relationships and tribal knowledge of parts and equipment were wrapped up in our people’s experience and capabilities

Omni-Channel Transformation

Page 9: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Competition Offered eCommerce

Competition had an 8 year head start bringing eCommerce to market

• Branding, Sales and Relationship Management

• SEO / SEM Marketing

• Advanced Product Content

Omni-Channel Transformation

Page 10: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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The Challenge

Even though we essentially created and innovated parts distribution in the foodservice industry –

We had become Marketing and Technology Laggards

Our business model and culture had become a barrier to future innovation

Omni-Channel Transformation

Page 11: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Initial eCommerce Strategy

Our Original Premise:

• eCommerce customer was a separate, smaller (but growing) customer niche

different from Heritage’s traditional, call center customer

• Stand up ecommerce as a new independent brand

• We commenced market research as we began building an eCommerce site

Omni-Channel Transformation

Page 12: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Built eCommerce from Scratch

No Content

Develop rich data for 120,000 SKUs –weights, dimensions, images, pricing, and

links to fits models and technical documentation

No Platform

Find the optimum eCommerce platform

Deficient Systems

Telephone, desktops and ERP all needed to be upgraded and integrated to bring

eCommerce online

Omni-Channel Transformation

Page 13: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Market Research

Proved DifferentlyOur research indicated that the traditional, call center customers and eCommerce customers were One and the Same

Customers desired an omni-channel solution, enabling their purchase journey to provide solutions that fit the needs of the problem

50%-60% of online customers shop the part online, then call the call center to make the transaction

Insight: The customer wants to be confident they ordered the right part and it will ship on time as promised

Omni-Channel Transformation

Page 14: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Why We Chose hybris as Our

eCommerce Platform?Relevant B2B Platform Experience and Functionality• Multiple experiences required for multiple classes of customer / user

• Product data more complex: multiple prices, multiple catalogs, product security

• Account management required: roles and permissions, cost centers & budgets, sales reports, credit management, sales quotations

• Order processes more complex: standing orders, credit checks, open to buy POs, approval processes.

Enterprise Scalability

Omni-Channel Solution

One Technology Stack for all Commerce

Viable Front-End Business Platform

Omni-Channel Transformation

Page 15: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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We Changed Direction• Create an omni-channel offering, call center and eCommerce, under one brand, Heritage Parts

• Focus on integrating eCommerceand call center to better serve customer journey

• Extend the hybriscockpit, with added customization, to the entire Customer Service floor

• Develop a higher level of integration between eCommerceand ERP than previously thought

• The change in direction delayed our eCommerce launch

Omni-Channel Transformation

Page 16: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Project Blue Fire(Commercial Transformation Initiative)

Goal: Stand up omni-channel offering in 6 months (Jan – July 2014)

Rebrand Heritage Food Service Equipment to Heritage Parts

Upgrade telephone, desktop and ERP

Integrate hybris Platform, eCommerce and CSC, with Contact Center

Omni-Channel Transformation

• Communication (chat, text, email and call)

• ERP (transaction, shipping, customer data and product data)

• Marketing (Exact Target and SEM)

Page 17: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Challenges

Customization to fit contact center processes and enable B2B transactions

• Ventured into unexplored territory

• Integration with Sage MAS500 ERP

• High level of customization resulted in time delays & cost increases

• Managing down growing bug list

Not internally equipped with appropriate resources

Maintaining communication between Heritage, Razorfish, and hybris Managed Services

Adoption by Customer Service team

Omni-Channel Transformation

Page 18: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Accomplishments

Go Live: August 8

Completed rollout to customer service contact center

– Small team training for 6 weeks

– Adoption slow due to bugs and performance issues

Month 1 – eCommerce was 1% of net sales

Month 3 – Doubled #visitors

By EOY – eCommerce forecasted to reach 4% of net sales

Omni-Channel Transformation

Page 19: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Omni-Channel Transformation

www.HeritageParts.com

Page 20: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

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Next Steps

• Settle into the system

• For eCommerce and Cockpit, reduce bugs and improve performance speed and stability

• Advance eCommerce functionality to provide competitive advantage

• Aggressive search marketing to grow new prospect database

• Evolve our culture and business model from call center to omni-channel offering

Omni-Channel Transformation

Page 21: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

Thank You

Page 22: Byran LiBrandi, Damon Childers, Heritage Foodservice Group, Swimming Against The Culture Tide And Transforming An Entire Business

Heritage Parts5130 Executive BlvdFort Wayne, IN 46808

+1 800 458 5593HeritageParts.com