Prénatal Case - Part B

Channel Management

Oscar Fernandez Baca

Martina Romani
Ilaria Verunelli
Natalina Wang
Steven Welle

02.07.2021
Question 1.a
Mega store format definition:

Which should be the criteria the management should use to define the location
of the megastore satisfying Piermario Mocchi need of having a forecast of the
future store turnover?
MEGA STORE FORMAT DEFINITION
LOCATION DEFINITION
Our goal in the location definition is to create a “ONE STOP SHOP”, where you can go to make all the purchases for the child comfortably in one and to create
therefore an INTENTIONAL PLACE TO PURCHASE, that do not need to be geolocated in areas of high pedestrian traffic or in city centers hard to be reached.
The consumer goes there on purpose with the intention of purchasing that specific product category, they want to be comfortable in reaching the location and with
the parking.

Having said that, when choosing the location, two models can be used; the RATIONAL or the GRAVITY** model. As it concerns a mega-store a rational
approach will be the dominant model to determine the location of the store.

Mega Stores must therefore be characterized by:

- ACCESSIBILITY - convenient shops to reach both independently and by public transport, large and convenient parking lots designed for mothers who have to
load and unload strollers, no tickets to pay.. etc

- PROXIMITY to stores for complementary products and services (eg Toys Center)

- COHERENT IMAGE AND EXTERNAL COMMUNICATION: which being located in suburban areas must be clearly visible and communicate the new Prenatal
image with appeal (large signs, colors, shop windows that attract attention ..).

** The Gravity approach will be applied on the small stores in the city centres that are more feasible for this approach
Question 1.b
Define the offer to be incorporated in the store defining both the product offer
in terms of assortment breadth and depth (identifying key criteria for the
definition of the two) and the service offer.
MEGA STORE FORMAT DEFINITION
ASSORTMENT: PRODUCTS OFFER
With the concept of "destination store", the rules for product assortment also change. We are talking about a "one stop shop", this implies that the mothers can
find everything they need (or almost) in one go.

As a result of this reasoning, monobrand stores become multi-brand stores in which the textile sector no longer occupies 100% of the assortment. The aim is
to offer consumers a wide range of products, suitable to meet as many needs as possible.
Leaving big space for the Prenatal brand (we could suggest a percentage of presence of 60-70% compared to other product categories), we would integrate
the offer with objects and accessories from strollers to baby foods.

Furthermore, it would be appropriate to divide the product category inside the stores not only referring to diversified goods, but also to the textile sector and others
needs into:
- Clothing
- Food
- Home
- Toys
- Travel
- Hygiene

The categories are further developed in the next slide.

In this way, the purchasing process is simplified and speeded up, and it is possible to divide the staff by departments and thus raise the level of specialization of
these.
MEGA STORE FORMAT DEFINITION
ASSORTMENT: SERVICES OFFER I
The main keys to differentiate from its competitors by using Multichannel strategy is creating value by benefits from integration of various channels. Focusing not only in
products offer but services offer, it plays big part in adding more value to the brand, bringing a better experience in a mass market.
Innovating in services offer in pre, during and post purchase services as:

- Possibility to request appointments before going to the shop and to “book” the assistant who fits that client’s specific needs
- Home delivery services (especially in case of hard goods purchasing)
- Loyalty cards
- Gifts vouchers
- Question and answer desk for new mothers in need of support
- Kids area - where mothers can leave their baby to play while shopping
- Create online registration, private page were relatives and friends can find a list and ideas for baby gifts
- Events with expert on topics interested in breastfeeding, infant nutrition, post birth recovering, parenthood advices, etc..
- Area reserved by appointment for health services like ultrasound, glucose test, fetal monitoring etc..
- We would also suggest adapting the opening and closing times to the needs of a new parent.

The goal is to provide a highly positive experience within the store to increase the quality of the shopping experience and enhance the consumer to shop again.
This is why we suggest that the stores provide highly specialized personnel for each department, a simple availability of products within the stores, a play area for older
children, so that mothers can shop freely and in peace.
MEGA STORE FORMAT DEFINITION
ASSORTMENT: SERVICES OFFER II
In this view it is important to keep in mind that customer is not just a passive person receiving products, he is participating to the creation of the product.
Prenatal should taking into consideration the needs of single customers not only in the creation of new products but also in the Category Management process.
Indeed start working in partnership with suppliers can bring to the can bring an additional benefit to the new Prenatal strategy.

Prenatal mega stores would follow the DESTINATION CATEGORY strategy: buying of product on a specialized shop because consumers consider it important.

Of course there will be a category manager in charge of each specific area of the mega stores.
Question 1.c
Based on your answer on point b): define the best way to manage the offer in
terms of efficient space allocation for both products and services and suggest the managers how to reach an
enhanced shopping experience within the store.
MEGA STORE SHOPING EXPERIENCE
PRODUCT AND SERVICE SPACE ALLOCATION
A well-planned retail store allows a retailer to maximize the sales for each square metre of the allocated selling space within store. Giving customers too many options can lead to
analysis paralysis, and this might mean dropping out of the purchase process altogether.The trick is to give customers just the right amount of choice to appeal to as many
customers as possible, but at the same time not too many options to get them confused and paralyzed to take action.

Geometric/Mixed Store Design

Geometric layouts incorporate the existing structural design of walls, windows, pillars, etc. into the shopping experience.

Similarly, a mixed space combines different elements of various floor plans into one. This is great for Prenatal that sell
different types of merchandise in a single location.

It combines a forced path/racetrack layout with a herringbone. Grocery stores also often combine traditional grid layouts for
their staples with angular or free flow plans in their specialty departments.

Overall, this layout takes the most planning, but it also brings shoppers a customized experience and gives Prenatal more
flexibility and creativity.

From the entrance until checkout desk, every detail has a direct impact to shopping experience. Normally from the entrance of the Megastore, the display window is very
important to attract the customer’s interest in entering and starting the purchase process, it is always linked to the main trends of the season and to the combination of different
product mix.
The Kid-friendly area, is alway located in an open area where parents could reach them easily during the shopping experience and checkout area.
The main categories section are divided by stands of clothing, home accessories, toys, food, travel accessories and hygiene products, well designed and allocated with an
alignment from one section to another through the design of walls, colors, indications and lighting.
Assistance and information are provided in each categories section by well-trained employees throughout the shopping experience when the customer needs it.
 MEGA STORE SHOPPING EXPERIENCE
WAY TO ENHANCE IN-STORE SHOPPING EXPERIENCE
Prenatal’s managers have the power to draw customers and increase sales by using a lot of methods to create an incredible in-store experience:
TECHNOLOGY
- Prominently display
information about store apps
and have associates trained to
provide personal support.
- Using QR codes to give
customers extra information
about products, or even about
specials events that aren’t
otherwise advertised, can keep
them coming back to see
what’s new
DETAILS
- Avoid “freshening” the air with - Investing in training the
heavily perfumed scents that
smell too much like medicine.
- Keeping floor as clean as
possible and last but not least
dust-free shelves and spotless
mirrors also make a good
impression
- Regular changing regularly the
main window display
EMPLOYEES
employees and activating
customer touchpoints
- Improve checkout, on the
busiest days, fully staffed
registers are the solution. Or
Keep customers engaged
during the checkout process by
having associates answer
questions or direct traffic to
keep the lines moving.
- Associates can offer samples,
coupons for future visits, or
provide tips for connecting
with the store’s apps.
IN-STORE AREA
- Offer kid friendly space, kid
zone with a place to sit, books
and a few toy
- Creating the right background
music related to the brand not
too loud
- Dressing room should be well-
lit
- Lighting plays an important
role
- Offer area reserved by
appointment for health services
like ultrasound, glucose test,
fetal monitoring etc.
EVENTS
- Combine experiences by
giving in-store customers
something they can’t get from
shopping online by hosting
events
- Special events may range from
live entertainment to product
demonstrations
- Expert teaching topics
interested
Question 1.d
Support the management in defining the best communication campaign to inform the customers of the change
in Prénatal.
Prénatal´s communication campaign should be focused in communicating the new positioning
and brand values, as well as the new visual elements that will represent Prénatal in the future
such as the new logo or the rainbow. This “brand campaign” or a “brand purpose campaign”
should not be focused on selling a specific product but with the intention of communicating the
new brand positioning.

The target for the communication campaign would be the “modern mothers” that Prenatal
executives talk about in the case. Therefore, the campaign should target women in the age range
of 25-45 years, which are also working and have a rich social life. Even though men are not the
main target or Prenatal, they should have a role in the communication, even if it's secondary. At
the same time that the mother´s role in society is changing, the father´s one is also doing at the
same time. In a modern family, society expects the father to share responsibilities with the
mother in an equal basis and that should be reflected in Prénatal´s communication.

In terms of message, the new brand claim should be the center of the idea. The communication
should explain what “A new together” means to the company and why that´s also relevant for
the consumers.

The communication should be faced from an emotional point of view, trying to reach the
customer´s heart not their brains, that would be the most effective strategy in this case. From
this angle, the communication should not be focused on the “rational” changes like the bigger
store or the bigger assortment but the new value proposition with the customer in the center of
everything.
If Prenatal wants to put the customer in the center of all they do,
they should invest time in finding find real insight about the
customer and dedicate the campaign to talk about the customer
needs. The main values to communicate would be:
- Close to customers.
- Ability to understand and help mothers.
- A trusted partner.

In terms of channels where the campaign should run, we would

suggest to have both atl and btl. TV, Press, Magazines or Outdoor
could be used to have a big reach with a more general message,
and then use internet, email or specialized magazines to impact
with more selective messages.

When it comes to the tone of voice for the campaign,

“Authenticity” must be the core of it. All the brands claim to be
authentic but then very few are in reality. Being authentic means
that you have a genuine point of view and opinion about things
that are relevant to your target. Prénatal´s communication should
clearly show that they understand what it's like to be pregnant and
have baby, not only in the good moments but also in the hard ones.
A communication that only portraits the good moment would feel
fake and wouldn't be relatable to the real mothers.
Question 1.e
How can Prénatal reach the challenging objective of having an integrated multichannel strategy linking online
and off-line?
Towards an integrated omni-channel strategy (a)
Roberto Chieppa: “We identified two major areas as pillars of our e-portal: the shopping and the social aspect”.
Prenatal decided to implement an e-portal where the customer can perform several functions. We aggregate these functions in some main areas.
SERVICES BASED ON GEOLOCATION
1. Through the website, the customer can discover where a product can be found, thus avoiding useless trips to the locations where he/she already knows the product is not
available.
2. Customers could order a product online and have it delivered at home or pick it up based on the geographical location (thus shortening shipment time, because “ship from
address” or “pick up point” is optimized based on zip code).
3. A similar function can be performed for return services (the nearest location to drop in a product to be returned)
4. When already in-store, sales assistance can check if a product can be shipped from another store to home, if not available at that specific location. Or, also, the item can be
shipped from one shop to another one, which is located nearer to customer needs
5. Geolocation services can also serve in the opposite direction, thus helping Prenatal choosing the location of new stores (higher sales) and the format of new stores (for
example choose the store format based on turnover or on the social demos of clients).
LOYALTY AND PROMOTIONS BASED ON CUSTOMERS PROFILING
6. Personalize the shopping experience through online profiling and offline purchases and create promotional offers tailored on the customer shopping behavior (portfolio,
location, etc). Loyalty card should serve as a discount and profiling tool aggregating online and offline experience. Customer profiling should also serve as a tool to
personalize in-store shopping assistance (personal shopper). Premium customers could have additional benefits: discount on movie tickets for just released children cartoons
(Walt Disney)
7. E-commerce can be used for pre-selection function (browse through product assortment) but also to quickly order items that the customer already knows (low-involvement
purchases because they are repeat purchases)
CUSTOMER ASSISTANCE
8. Online chat as a 24/24 365 days open communication channel with Prenatal representatives
SOCIAL ASPECT
9. Embed in the e-portal a blog with expert and peer-to-peer advice about not just products but also parenthood experience. This could created a list of best rated Prénatal
products based on each category (peer-to-peer reviews)
10.Create in-store (megastore) events dedicated to parenthood and children. For example “mom of the month”, sharing her experience having a newborn and shopping needs. Or
presentations of books about parenthood experience. This events should be rooted in the same principle of authenticity that is driving our communication campaign.
11.As already mentioned, the “experience” part related to being a member of the Prenatal community should touch in a seamless manner also the in-store experience (megastore).
Prenatal should be a preferred location for both economic shoppers (more focused on time saving, easy to reach location) and recreational shoppers (for example, during
weekends). For this last reason, in the megastore, there should be a playground for children, monitored by expert personnel. Visiting the megastore can be relaxing and not
just functional. Prenatal should partner with a food and drink provider so to have a food corner where parents can enjoy a couple of hours of freetime. In the playground,
events for children could be organized too.
Towards an omni-channel strategy (b)
As part of its renewed strategy, entailing different touchpoints with clients, Prenatal is planning to use SMSs too.
Generally speaking, Prenatal should AVOID massive and generalized messages through mobile that might result as spammy.

Telemarketing through SMSs should serve as an open channel with customers for:
1. Tailored communication messages about available promotions and events based on customers profiling
2. Order status and shipment tracing
3. Payment and purchases tracing

In the future:
Why not a Prenatal app? Mobile purchase are becoming more and more important. The app could become a virtual place where it is possible to integrate the shopping experience
and the social experience smoothly.

In summary: Prenatal is moving from a multi-outlet mono-channel strategy to a multi-outlet multi-channel strategy (3 different store formats + e-commerce, with mobile focus in
the long-term + telemarketing)

In order to avoid channel overlaps, Prenatal should differentiate in 2 directions:

4. Product assortment among the 3 different physical store formats (broader, multi-branded assortment in the megastore)
5. Service and experience. The stores should be very relevant for the experience and services we already described in the previous slides and in this sense should offer a premium
experience with respect to the e-portal (human touch). Stores should generally serve as pick-up points, return points and post-sale assistance points.

In the long perspective, Prenatal should be a “shopping partner” for dads and moms, filling in the information gaps, reducing shopping time if needed and also openly addressing
all the aspects of parenthood with expert and peer-to-peer point of view. The long term implementation of a mobile strategy with the app and push notifications should bring
Prenatal in an omnichannel perspective.
Question 1.f
Which are the main differences in needs for the management of the supply chain for the two Prénatal store
format? How could managers deal with these differences?
Supply chain management: main differences
Complexity, demand uncertainty and storage place

City shop Megastore Impact

Storage place limited available create buffer stock to manage demand uncertainties

Number of sku’s restricted high Megastore has complexer supply management

New categories no yes Uncertainty in demand
History of demand available not available Uncertainty in demand
Impact out of stock high moderate Megastore customer might buy comparable product, lowering the
impact of an out of stock.
Delivery size small truck load/ large Less deliveries create less flexibility
Average SKU size average above average due to trolly, beds etc
Integrate digital critical importance relevant City shop has smaller assortment, important to still serve the customer
via digital channel (create omnichannel)

Megastore supplychain start-up will be challenging due to a more complexity in the supply chain (more sku’s) and less historical information on customer demand. On the
other side the larger store, will facilitate larges stock. Stocks give a buffer, however due consume cash and create risk for write-offs. Digital is a critical enabler to make city
stores more attractive.
Question 2.a
Summarize the main issues in HR management to be taken into account while defining the new HR processes
HR PROCESS
MAIN challenges

Main challenges from HR perspective

- Culture change needed to new way of working
- Find new employees to populate the new megastores
- New expertise needed on how to manage a megastore instead of a city store
- Need new profiles specialized in digital area
- Need people that are experts in community building
- Highly specialized personnel and HR; in-depth knowledge of the product and its functions. Each department must have a different specialization based on the type of goods it
offers and be able to support parents throughout the journey within the store.
Question 2.b
How should the company address each of them?
HR PROCESS
Solutions

How to deal with the challenges?

We propose:
- periodic training courses for staff in contact with the public and updating on new products.
- courses in psychology and mother / child pedagogy for those who deal with the new mothers department
- dietary courses for those involved in the food section

Establish Prénetal Culture and Mindset. Customer in mind with everything we do:
- Define the new values of the company
- Internal campaign to explain the new values
- Support change with giving right example by the top, consistent support to the complete Prénatal team, and create incentives for the employees to embark on the new journey.
- In case employees are not willing to make the transition to the new culture and mindset of the company, actions need to be taking to replace employees
- Onboarding training for new staff to get to know the company, new culture and how to interact with customer according to prenatal guidelines
- Ensure brand values are part of the communication during the promotion of new jobs and the hiring new people
- Get feedback system of customer active by getting their feedback on store and shopping experiences
THANK YOU
GRAZIE
GRACIAS
DANK U