Unlocking growth by rethinking merchandising operations | Flying Tiger Copenhagen Q&A

To future proof, retailers will need an omni and multi-channel model to centralize and automate core merchandising operations.

Mike Smith, Chief Commercial Officer of Flying Tiger Copenhagen explains the Danish variety retailer’s plans for aggressive growth enabled by the adoption of retail tech in this Q&A interview. He also details what retailers can do to future proof their businesses, such as focusing on centralized and automated merchandising operations.

See more insights from “The Big Debate” roundtable of experts including Carlos Abellán, Data Analytics & Transformation Director at TENDAM, Jan Heere, Retail Executive & Consultant; Gita North, Partner at First Friday, and more.

Looking ahead, how do you think retail will look in three years’ time and in what ways will that be different from how it looks today?

Retail technology but specifically data, automation and digital, will define how our business will look in 2025 and will be the dominant force of forward progress.

In our case, Flying Tiger Copenhagen is transitioning from a market-led wholesale business to an integrated, omnichannel retailer. Our strategy is to adopt leapfrog technology and take material steps forward in terms of new tech with the aim of providing dynamic and flexible shopping options that enable customers to shop our unique, super curated products.

Our promise that “a richer life does not have to cost a fortune” will be enabled by that focus on data, automation and digital.

As retailers continue to morph and evolve, what changes will they need to make to future proof and grow towards 2025? What is Flying Tiger Copenhagen’s strategy?

There are a few approaches that retailers can take to make them future proof, such as working toward an omni and multi-channel model with the help of retail tech that helps us centralize and automate some of our core merchandising operations.

Flying Tiger Copenhagen has evolved out of a wholesale model, where product ranges were sourced and built centrally but local markets chose what lines to carry and in what quantities. Today, all those activities are now in a central HQ. A franchise arm, meanwhile, maintains the wholesale mentality, whereby the company continues to develop the range, curate the assortment and make recommendations but the franchisee decides which products to stock.

Flying Tiger Copenhagen’s future growth strategy is focused on leveraging its franchise operation to get into new markets more quickly and specifically the Middle East, Asia and North Africa in the short term. The US, especially in tourist destinations, is also on the table but for the longer term.

In five years’ time 50% of the unit throughput that we purchase, forecast and plan for will be through a franchise operation. We aim to become a globally focused footprint and brand, while maintaining the foundation by optimizing the current set up in Europe.

Moving to centrally-led, automated, inventory management practices will promote further gains. The opportunity is to free up significant improvements in working capital to enable aggressive growth in the owned-and-operated side and make the transition from an old school market-led wholesale mentality to an integrated, omnichannel, multi-channel retail model.

The tech we are implementing from an allocation and replenishment perspective is a complete and utter change culturally, responsibility-wise, P&L ownership-wise, ways of working-wise. Fundamentally it’s moving responsibility from the markets to centrally-owned.

In terms of e-commerce, Flying Tiger Copenhagen has big ambitions in this space and today e-commerce is fully integrated in the business. That means my team can take real time analytics from the digital side and preemptively, as in-bound stock is coming in, list those products, understand the customer purchasing behavior and, before products hit shelves in stores, determine where we can eke out margins or lower prices etc.

All of those decisions never existed prior to last year but feed into one holistic trading behavior that is very automated, digitally supported and tech heavy.

How do you foresee the supply chain evolving in future?

Even if a retailer is strong in terms of data, limited logistics and fulfillment capabilities can keep businesses from scaling up digital operations and omnichannel potential.

Creating a more dynamic and agile, forward-looking supply chain model is a key priority for Flying Tiger Copenhagen in 2023. This includes a strong focus on sustainability. Eco friendly and sustainable is the DNA of the company and Flying Tiger Copenhagen is in the top 15% of companies globally in terms of sustainable business practices.

Businesses will also become more progressive from a sourcing perspective and there will be greater diversification in supply chains – multi-country and multi-vendor. Supply chains will have to become much more multi-dimensional and flexible. Relying on the manufacturing facilities of a single country is no longer an option.

More insights from “The Big Debate” roundtable of experts including Javier Figar, former CRO of AWWGCharlotte Kula-Przezwanski, Columbus Consulting Partner and Director of EMEA and more.

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