Grattan and Otto UK
The problems facing a traditional agency mail order business, Grattan, can be traced back to changes that took place from the 1990s and the relentless increase in e-commerce. From 2005 online sales took off while catalogue sales throughout the industry declined by Ă‚ÂŁ273m. One area of expansion for the company was Parcelnet, its distribution network, which benefited from increased home delivery business from other companiesĂ˘â‚¬â„˘ online orders. A further review completed in 2009, resulted in the restructuring of the company into Freeman Grattan Holdings (FGH) that brought all home shopping brands together. FreemanĂ˘â‚¬â„˘s offices and warehouse closed, with distribution being centralised in Bradford and the companyĂ˘â‚¬â„˘s call centre in Sheffield. The two big agency catalogues were now planned as home shopping destinations to combine a range of
exciting retail brands in a virtual online shopping mall. This concept emulated the re-invention of department stores as mini-shopping malls filled with retail brands in the 1990s.
With this online initiative FGH launched four new offers to the UK: Bon Prix, Curvissa, Swimwear 365 and Witt UK and continued to develop the established brands of Kaleidoscope and Look Again.
It changed the design of the two main catalogues to offer more specialisation: Grattan increased its range through a number of distinctive Ă˘â‚¬ËśshopsĂ˘â‚¬â„˘ including Oli and Arizona. One problem will be to continue to cultivate these offers Ă˘â‚¬â€ś and ensure that they do not start to bleed into one another Ă˘â‚¬â€ś to drive future growth. Each brand was managed by its own team and set individual targets, which created a high level of morale. Internal competition and collaboration between brands allowed the organisation as a whole to prosper. The traditional catalogue continued to have a place, prompting customers to visit the website and traditional marketing methods were used alongside social media, including Facebook and Twitter.
Home shopping used to be a social business with a catalogue shared with friends and family. Curvissa and Bon Prix give customers the same opportunity. Getting customers to look at the page, the Ă˘â‚¬Ëśshop windowĂ˘â‚¬â„˘, is aligned with getting best products at the best prices and every page has to pay its way. Consequently products are increasingly photographed against plain backdrops to reduce costs. By 2012 customer service had become more important than ever. New premises in Bradford facilitated a new Customer Service initiative, Ă˘â‚¬ËśCSI: YorkshireĂ˘â‚¬â„˘, with four objectives for its IT capability: keeping any promises made to customers, letting them know what is happening at every stage of the process, giving customers power to manage own accounts, responding immediately and positively to any issues (Ward, 2012).
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1 How successfully did Otto handle the acquisition of Grattan?
2 Was the decline of traditional mail order inevitable?
3 To what extent does FGHĂ˘â‚¬â„˘s portfolio of brands create a successful competitive position?