When British retail veteran Graham Harris was recruited as interim leader of the fast-growing Dutch online department store Wehkamp in April 2019, he found a business in dire need of a makeover. For years, Wehkamp had prioritised growth over profit by offering low-margin sales at relatively high cost. The site had amassed millions of customers, but it was still losing money and had no strategy to compete with online retail giants such as Amazon and Zalando.
“Wehkamp had morphed itself a bit towards being a platform but without the real capabilities of those other platform businesses. The digital skills were there, but they were not balanced by retail skills,” Graham recalls.
“The minute I turned up, the lights went on for me, and I thought, ‘this is a great opportunity’. I could see very quickly that if we acquired the retail skills to match our digital skills, we could make this business hugely more successful,” he says.
With 30 years of retail experience under his belt, Graham could see that the project facing him would be a perfect fit for his skill set. He presented plans to Wehkamp’s owners for a “quick change of direction” and was invited to stay on as CEO permanently.
“My plan was to dust down the brand. Wehkamp is a very well-known business, but it was time for me to turn it into a well-loved business,” Graham says.
Curated and efficient
His first task was to create an “inspirational place to shop” – and to remove clutter and excess choice. “We can’t have an endless selection of products,” he says. “We’re not trying to be a never-ending Amazon equivalent. We want a curated range.
We want to display it inspirationally on our website through photography, videos and reviews, making it a brilliantly exciting and relevant place to shop.”
Graham strategically depopulated Wehkamp’s bloated fashion categories and built up the home and beauty sections, encouraging the site’s three million customers to shop across categories, not just within them. He also led a charge to boost operational efficiency at Wehkamp’s distribution centre.
Slight adjustments to processes of picking, boxing and delivering products unearthed previously unseen avenues to profitability. “Our business is huge but also sophisticated. We can pick 165,000 items and dispatch 40 trucks in a day with just 28 pickers. Our automated warehouse does almost all the work,” Graham says.
“This year won’t be a year of growth, but our decline is flattening, and we expect to see profits over the next two to three years.”
Business has been growing so rapidly at Wehkamp that, for the first time, Graham sees the need to implement merchandise planning systems, which are usually reserved for bricks-and-mortar retailers with multiple locations.
“The goal is to put out all our stock including, ultimately, by marking down what’s left at the end of the season. We need to be able to clinically forecast our purchasing and our sell-through because the warehouse, while it’s one stocking point, could be a point of failure. If it overfills and we’ve got the next season’s stock coming in, that crossover is very hard to manage,” he says.
I think if we can use our operational excellence to give customers a great experience, suppliers will want to connect with us as their preferred channel to market.
In addition to eliminating overstock, Graham sees stock management as crucial to Wehkamp’s success over the next few years because of its effect on the company’s positioning.
“We’re not trying to be a marketplace where we just pass an order for something to a third party to fulfil. We’re not an endless platform or a search engine. This is what drove Nike away from Amazon – they want their brand equity controlled,” Graham says.
“So, while we currently manage four million items in our warehouse, our systems for moving and ordering merchandise serve as a key competitive advantage,” he adds.
Competition with the major online retailers remains fierce, but by setting Wehkamp apart through meticulous curation and strategic ordering, Graham is accomplishing the company’s true goals.
Wehkamp is an online department store with no physical retail locations. The company was founded in 1952 and started as a mail order business. In its very early years, Wehkamp sold mattresses and bed textiles via advertisements in magazines; it has since grown into one of the largest ecommerce players in the Netherlands. In 2019, Wehkamp welcomed more than 500,000 visitors a day and handled more than 11 million shipments during that year. Its revenue in 2018/2019 was €661 million.
“I think if we can use our operational excellence to give customers a great experience, suppliers will want to connect with us as their preferred channel to market,” he says. “Our aim is not to be the biggest but one of the strongest. We see ourselves as a regional gem.”
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