Mastering Digital Disruption in Retail

DIGITALTRANSFORMATION
IN 7 STEPS
MASTERING DIGITAL DISRUPTION IN RETAIL
BASED UPON THE DIGITAL TRANSFORMATION OF

We are Duval Union Consulting, a consultancy
company that helps companies master digital
strategies and transformation.
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We wrote a book on
Digital Transformation.
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MASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAIL

In this presentation we will
show you how we helped
Belgian retailer Torfs master
digital disruption.PLEASE NOTE THAT ALL INDICATIONS ARE FICTIONAL
MASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAIL

DIGITAL IS TRANSFORMING THE WORLD
Torfs is a a Belgian retailer in shoes. The organization has more than 70 stores in Belgium.
The company originates from the end of World War II. After a period of selling shoes on  
the marketplace in Mechelen, founder Karel Torfs decided to start Schoenen Torfs in 1948  
and opened four stores together with his wife.
The company went from father to son and in 1986, Wouter Torfs (son of the third generation) came in play.
Under his charge the family company grew out to become an established retailer in Belgium, best known
for its family values and motivated employees. Therefore, Torfs has been elected Best Employer & Best
Workplace in Belgium several times.
Retail companies, however, have quite some challenges with new challengers and that’s why Torfs &
Duval Union Consulting have worked together to master the digital transformation of Torfs.

DIGITAL IS
TRANSFORMING
THE WORLD

We have reached a stage in
digital evolution where
“online” is no longer a
gimmick at the sideline of our
activities.
Digital and online services are evolving at an unseen speed and this speed
continues to increase with new trends like social and mobile media.
40
30
20
10
0
First commercial available year
1870 80 90 10 20 30 40 50 60 70 80 90 10 151900 2000
Electricity (46)
Telephone (35)
Radio (31)
Television (26)
PC (16)
Mobile phone (13)
The web (7)
1873
1876
1897
1926
1927
1983
1991
Technology Adoption
(Years until used by one-quarter of American population)
source: singularity.com

Digital in all its forms is transforming
the very essence of the world we live in.
Sectors that did not anticipate transformation
and “lost the game”:
‣ Music
‣ Classifieds
‣ Print
‣ Photography
‣ …
Sectors currently transforming  
at high speed:
‣ Media
‣ Retail
‣ Recruitment
‣ Communication
‣ …

After 20 years of online activity,
the world is realizing that digital
technologies are changing the
way we do business.
MASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAIL

TO SURVIVE DISRUPTION YOU NEED TO BRING DIGITAL FROM
THE SIDELINES TO THE CORE OF YOUR ORGANIZATION.
THE BUSINESS
DIGITAL
(at the
sideline)
DIGITAL IN
THE CORE

THE
BUSINESS
DIGITAL
(at the
sideline)
DIGITAL IN
THE CORE
DIGITAL IN
THE CORE
DIGITAL IN
THE CORE
DIGITAL IN
THE CORE
IF IT’S NOT POSSIBLE (YET) TO INTEGRATE DIGITAL IN THE CORE, YOU SHOULD
START NEW DIGITAL FIRST BUSINESSES NEXT TO YOUR TRADITIONAL COMPANY.
THE BUSINESS
DIGITAL
(at the
sideline)

TV
RADIO
PRINT
BILLBOARDS
DIRECTMAILING
DIGITALMEDIA
SALES
MARKETING&COMMUNICATION
SERVICE&SUPPORT
HR
IT
PR&EXTERNALCOMMUN.
R&D&ENTERPRISE2.0
DIGITAL TRANSFORMATION
THE REAL POWER OF DIGITAL IS HAPPENING IN A TRANSVERSAL WAY THROUGHOUT
YOUR ENTIRE ORGANIZATION AND IS IMPACTING EVERY DIVISION IN YOUR COMPANY.

IN ORDER TO
CHANGE THE
WORLD?
HOW BIG SHOULD CHANGE BE?

HOW BIG SHOULD CHANGE BE IN ORDER TO CHANGE THE WORLD?
12.000
10.000
8.000
6.000
4.000
2.000
0
2007
2008
2009
2010
2011
-2.000
2,0%
0,0%
-2,0%
-4,0%
-6,0%
-8,0%
-10,0%
-12,0%
-14,0%
Millions
Sales
Net Profit
Rate of Net
Profitability
(c) ZoneBourse.com - Thomson Reuters
EASTMAN
KODAK
COMPANY

KODAK STOCK EVOLUTION

EARNINGS BLOCKBUSTER VS. NETFLIX
1,750
1,500
1,250
1;000
750
500
250
0
JAN 2007 JAN 2008 JAN 2009 JAN 2010
Blockbuster
Netflix
Source: CNBC
Millions

Waves of Digital Disruption
1995+
Music
Photography
Video Rental
…
2010+
Print Media
TV
Travel
HR
…
2015+
Banking
Healthcare
Automotive
Retail
Education
Telco
…
2020+
All Safe havens
will be subject
to digital
disruption
…

DISRUPTION IS REAL, DEAL WITH IT!
DISRUPTION
MODELING
TRANSFORMATION

DIGITAL
TRANSFORMATION
MODELING

DIGITAL TRANSFORMATION MODELING
Digital Transformation Modeling is a pragmatic methodology that
allows organizations to run through a set of exercises and workshops to:
‣ clarify the possible impact of digital on their activities
‣ create future scenario’s and a strategic transformation mission
‣ create a positive roadmap of business ideas to build your own future
‣ permanently monitor and identify trends that can speed up
transformation

THREE
QUESTIONS
TO ANSWERMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAIL

1. WHAT IS HAPPENING NOW?
2. WHAT WILL HAPPEN NEXT?
3. WHAT ARE WE GOING TO DO?
THREE QUESTIONS TO ANSWER

1. WHAT IS
HAPPENING
NOW?MASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAIL

THE GLASS HOUSE THE PACKAGE THE FROG THE GATEKEEPER THE TRAVELLER THE PARTICIPANT THE CYBORG
Step 1.
External analysis - Getting insights and understanding of the drivers of
digital transformation
To kick off the digital transformation of Torfs, detailed insights and understandings about what is happening in and
beyond the world of retail today were needed. This phase of the transformation is inspirational as it opens the
eyes of the stakeholders of the company and gives a strong sense of what is already happening in the industry.

THE GLASS HOUSE
THE PACKAGE
THE FROG
THE GATEKEEPERTHE TRAVELLER
THE PARTICIPANT
THE CYBORG
A world with increased transparency and
higher accountability, with a new form of
proximity and the need for responsiveness…
… a world in which large monolithic
structures are challenged by new
(smaller) players, operating online,
worldwide and according to new rules…
… a world in which traditional
partners becomes competitors
and where everyone is trying
to by-pass someone else…
… a world in which we have new opinion
leaders deciding what is important and
what is not: new experts, our peers, but also
driven by technology…
… a world in which mobile access is
dominating everything else. Where people
have access to everything, everywhere,
every time they want it…
… a world in which people
want to participate and
co-create the future…
… a world in which technology
becomes part of everything we do,
where every object (including ourselves)
is connected to the internet.
This is the world
we live in today.
THE WHEEL
OF CHANGE

Retailers are becoming more transparent towards consumers.
There is a high demand in taking greater responsibility.
The distance between consumer and company is getting smaller.
Consumers demand a greater responsiveness of retailers.
Communicating with consumers occurs bi-directional.
Humanized organizations are thriving.
Authenticity has never been more important than today.
THE GLASS HOUSE
Step 2.
External analysis - The changing world of retail

THE GLASS HOUSE
Step 2.

Competitors are ‘unbundling’ or ‘rebundling’ their supply.
New players are attacking traditional retailers through ’appiﬁcation'.
There is an immense long tail in retail.
People want more personalized products.
Buying products has become an experience.
Speed is elementary, we want things now.
Price is a big differentiator.
Disruptors bet big on (self)-service.
Traditional players aren’t as scalable as the new players.
THE PACKAGE
Step 2.

THE PACKAGE
Step 2.

Former partners and dealers are bypassing you by going
directly to the consumer.
Traditional services are becoming more virtualized.
Customers have far more options because of the huge
fragmentation of touchpoints.
THE FROG
Step 2.

If you can sell expensive cars online,
you can sell anything online.
THE FROG
Step 2.

New gatekeepers change your position in the market.
People tend to buy what is being recommended.
There is a good is good enough attitude amongst your clients.
Employees and customers are becoming important ambassadors for
brands in retail.
THE GATEKEEPER
Step 2.

TRADITIONAL GATEKEEPERS
Crowd-sourced opinionsPeers as news distributorsAutomatic algorithmsNew “experts”
+ + + +
THE GATEKEEPER
Step 2.

The location of retail is shifting vastly towards online & mobile.
Smartphones make the process of consuming much easier.
People are becoming an empowered self due to mobile technology.
Instant gratiﬁcation changes the rules: we want it here & now.
There is a new way of working for your employees and your
customers.
Mobile ecosystems are introducing contextual awareness.
THE TRAVELER
Step 2.

THE TRAVELER
Step 2.

Communities are setting the tone in retail.
Gamiﬁcation is introduced in retail to drive customer loyalty.
Digital technology is making it easier for consumers to collaborate.
New players are using the (ﬁnancial) power of the crowd.
The sharing economy is changing the world forever.
THE PARTICIPANT
Step 2.

THE PARTICIPANT
Step 2.

Devices are becoming smart(er) because of the Internet Of Things.
Wearables are becoming mainstream.
People as quantiﬁed selves are consuming in different ways.
Robotics are improving logistics in retail.
Smart ‘big data’ is playing a bigger role than ever in retail.
Consumer monitoring is being implemented at light speed.
THE CYBORG
Step 2.

THE CYBORG
Step 2.

Step 3.
Internal analysis - What is the impact of digital
disruption on Torfs?
In this phase we scored the performance of Torfs on each driver. This shows our client how big the impact of digital
disruption is (or will be), how well they are performing and how vulnerable they are for new, disruptive players.
IMPACT

Step 3. Internal analysis - What is the impact of digital disruption on Torfs?
Monolithic vs
atomic
Appification
Long Tail
Personalization
Experience
Speed
(Self-)service
Scalability
Bypassing
Virtualization
Fragmentation
of touchpoints
New gatekeepers
Recommendations
Good is good
enough
Ambassadorship
Place
Utility
Empowered self
Instant
gratification
New way of
working
Contextual
awareness
Community
Gamification
Collaboration
Power of Crowd
Sharing economy
Internet of
Things
Wearables
Quantified self
Robotics
Data
Monitoring
Transparency
Responsibility
Proximity
Responsiveness
Bi-directional
Humanization
Authenticity
We measured how well Torfs scores on each of the drivers and which
of the drivers are most impactful for Torfs.

Step 3. Internal analysis - What is the impact of digital disruption on Torfs?
The impact analysis we conducted, learned us that Torfs already has built up some strengths over
the years. The organization has always been doing well in terms of being transparent, accountable
and a human company.  
Combining these elements of The Glass House with offering a great service, results in a strong
network and a good relationship with the customers.
 
Despite these upsides, we’ve found that Torfs is still facing numerous challenges to compete with
new, digital (and disruptive) players in retail such as Zalando.  
The company will need to take relatively big steps, however we see that Torfs will be able to make
the leap forward and transform successfully towards a hybrid company where digital innovations
and traditional values meet each other halfway.

2. What will
happen
next?
MASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAIL

2. WHAT will happen NEXT?
Step 4.
Internal analysis - Scenario planning
We do this exercise to combine the several digital disruptions and fragmented impulses into clear future scenarios. Each of these
scenarios are realistic, are situated within 5 years from now and will give Torfs insights in their own, possible, position in the future.
For the scenario planning, the two most impactful metaphors of digital transformation were chosen by Torfs. Together we worked
the future scenarios.

Step 4.
Internal analysis - Scenario planning
HIGH DISRUPTION METAPHOR 1
LOW DISRUPTION METAPHOR 1
LOW
DISRUPTION
METAPHOR 2
HIGH
DISRUPTION
METAPHOR 2
NO CHANGE
HYPER
DISRUPTION
DISRUPTION A
DISRUPTION B

Step 5.
Internal analysis - Most likely to happen Scenario
After writing down the possible, future scenarios for Torfs, we -together- chose the plot which seems most likable to
happen in the retail industry from Torf’s perspective.
With this scenario in mind, we painted a more detailed picture of what will happen in the retail industry and how
this will translate towards the different groups and generations of consumers for Torfs.
NO CHANGE
HYPER
DISRUPTION
DISRUPTION A DISRUPTION B
CLICK TO LEARN MORE ABOUT THE DIFFERENT
GENERATIONS IN DIGITAL TRANSFORMATION

Step 5.
Internal analysis
Most Likable to
happen Scenario
Together with Torfs, we’ve
wrote a detailed scenario that
describes the future of Retail
and the company’s position in
this scenario.
A WORLD
… where online
retailers explore the
ofﬂine world & vice
versa … with a lot of
fragmentation,
unbundling & new
retail formulas
… where new
business concepts of
retail thrive
… where
retailers are
providing customers
with online & ofﬂine
experiences
… where
digital players
invest in
automatization,
personalization &
big data
… where brands
still need retailers to
effectively reach
consumers
… where
retailers can
maintain & reinforce
the relationship
with the
customers

3. What are
we going
to do?

Step 6.
Business cases - Development of
business ideas
The last step of the digital transformation of Torfs is the
creating a longlist of business ideas focused on the most
likely to happen future but keeping all four possible
scenarios in mind.
This list is only a snapshot in time but Torfs can now start
integrating and implementing the new business ideas in
the company’s broader strategy and the complementing
tactics of the organization, knowing that they’re armed
against digital disruption.

Step 6.
business ideas
Together with Torfs, we’ve brainstormed about business ideas for the company considering the
designed scenarios and the (position of Torfs in the) future of Retail.
These business ideas were mapped on a realistic roadmap, consisting of business activities which rely
on the classical strengths of Torfs (being a human & local retailer) to create a strong digital storyline
and customer experience throughout online ánd ofﬂine.
We strongly believe that this hybrid approach offers Torfs (and in addition all retailers) great chances
to successfully counter attacks from challengers such a Zalando and others.

Step 6.
business ideas
Developing new business ideas is not an easy thing to do.
Click on the banner to get inspired by 10 business models of hyper disruptors.

Step 7.
Next steps - Digital leadership development
After the development of business ideas and integrating these ideas into a
realistic digital roadmap, it is crucial to develop digital leadership and
implementing digital into the existing structure of the organization. We
develop digital leadership in three steps:
1. Digital Leadership Assessment 
Mapping the “as is” situation and recommending building blocks to
move towards the ideal “to be” situation. 
2. Digital Leadership Development 
Designing a program to improve internal skills and knowledge. 
3. Digital Leadership Retention 
Identifying and securing (new) digital leaders within the company.

Step 7.
Next steps - Digital leadership development
CIO COO CbsOSalesMkt
CDO
Virtual Digital Leadership Team
Outside
world
Digital Ofﬁcers
DIGITAL OFFICE
Digital Leads
Digital Network
Board of Directors
Shareholders
CEO
In our book “Digital
Transformation” we’ve described
several new roles and teams to
incorporate digital transformation
within companies.

Step 7.
Next steps - Trendwatching
Because digital transformation and disruption are
recurring powers it is needed to keep track of
evolutions in technology and retail.
After the digital transformation of Torfs it is thus needed to
monitor all new trends and keep our eyes on the
possible scenarios to make sure that our client is able to
change course in a fast but well thought way, which is
aligned with the business strategy of the company.

SEVEN
STEPS TO
REMEMBERMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAILMASTERING DIGITAL DISRUPTION IN RETAIL

WHAT IS HAPPENING NOW?
WHAT will happen next?
WHAT are we going to do?
1. Get insights and understanding of the drivers of digital transformation
2. Know the changing world of retail
3. Measure the impact of digital disruption on your company
4. Create realistic future scenarios
5. Paint the picture that is most likely to happen
6. Develop business ideas according to the scenario(s)
7. Develop digital leadership, implement digital in the company & monitor trends

“Substance, approach and especially style made Jo Caudron and his team the
perfect ﬁt to align the members of the entire management team in our digital
transformation. It was a unique experience, which resulted in a shared vision of
the management.
Initially only a handful of believers truly led the digital transformation project
internally. Because of the workshops, however, the transformation mission has
secured and gained widespread support throughout the company. We’re fully
convinced that this support is an absolute must to really set things in motion.
Starting today, everything will change. All colleagues - regardless of levels,
departments and structures - will work together in new and different ways.
Open, forward-looking, no-nonsense but keeping both feet on the ground.
The best is yet to come!”
Barbara Torfs
Director of Marketing  
& Communication

CLICK IF YOU NEED
HELP WITH YOUR
DIGITAL TRANSFORMATION

Want to learn more?
Read more on Digital
Transformation in our book!
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Mastering Digital Disruption in Retail

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