Galeria Kaufhof is one of Europe’s leading department store operators and is positioned as a modern retail brand with an unmistakable profile. Its stores are characterised by high-quality, international product ranges. They comprise both well-known brands and high-quality own brands. The department stores, which have between 7,000 and 35,000 square metres of selling space, are generally located in prime city centre locations. In Germany, Galeria Kaufhof operates 105 department stores under the names Galeria Kaufhof and Kaufhof as well as 17 stores specialising in sports gear and clothing under the names Sportarena and Wanderzeit. In Belgium, the sales line is known as Galeria Inno and operates 15 stores. The service company Dinea, which operates the restaurant section in more than 60 Galeria Kaufhof department stores in Germany, is also part of the Galeria Kaufhof sales line.
Real and virtual department stores
For more than 130 years, Galeria Kaufhof has stood for customer trust. Consumers want to experience trusted brands in all available sales channels and browse through the range of products offered – at home and on the go. For this reason, our sales line aims to become Europe’s leading department store with a multichannel offering. To reach this goal, Galeria Kaufhof will continue to consistently apply its chosen approach: in 2011, the sales line completely overhauled its online shop www.galeria-kaufhof.de. During the financial year 2012, it continuously expanded its online offering, which now comprises more than 50,000 items. The online department store is open 24 hours a day, 7 days a week. It also serves as a virtual display window for Galeria Kaufhof. Customers have the opportunity to take advantage of the items and services in a stationary or virtual department store. They can, for instance, have their orders delivered directly to a store or return them there. Products not in stock at the department store can be ordered online from there and delivered to the customer. Thanks to the close linking of online sales and stationary retail, Galeria Kaufhof can offer consumers the best of both worlds: a broad selection, shopping independently of time and place, event-oriented product worlds and first-class service.
Customer segmentation key to successful store layout
As a company, Galeria Kaufhof works to meet consumer expectations. The objective is to increase added value for customers. To better satisfy their desires and needs, Galeria Kaufhof resegmented its customer groups in 2012. This effort was based on an in-depth analysis of customers’ shopping behaviour and individual life situations. The information for the customer segmentation was collected during telephone surveys and interviews. The analysis resulted in a new classification of customer segments for the women’s fashion, men’s fashion and world of babies departments as well as for the home textiles department. Galeria Kaufhof is currently carrying out specific projects to align processes in purchasing, sales and marketing to these new customer segments. The sales line intends to alter assortment design, improve its customer approach and overhaul advertising campaigns. It is also reorganising the internal structure of purchasing to improve expertise for so-called outfit styling, i.e. the art of putting together an outfit. This should help employees better tailor the assortments to the respective target groups. In addition, Galeria Kaufhof has bundled responsibility for textile own brands for women’s and men’s fashion within 1 purchasing department. The department’s job is to improve the positioning of the sales line’s own brands vis-à-vis producer brands and competitors’ own brands.
Local positioning of stores intensified
In 2012, Galeria Kaufhof remodelled 18 stores – without interrupting business operations. The modernisation effort did not just give these department stores a facelift and create a new shopping atmosphere. Galeria Kaufhof also used the upgrade to tailor the assortments to customers’ shopping behaviour as well as the market situation and competition in local areas. In this work, our sales line is systematically continuing the process of intensified local positioning of the stores that it initiated in 2010. Since then, Galeria Kaufhof has remodelled more than 70 of the 105 department stores in Germany to increase added value for customers and tap existing potential at each store. The 2010 decision to give up the departments for consumer electronics and media and to use the newly available space for other, higher-margin assortments was taken in this context. Galeria Kaufhof completed this process in 2012. Fashion, accessories, sporting goods and toys occupy the selling space of the former media departments.
By regularly conducting analyses, Galeria Kaufhof ensures that it can respond to changes in shopping behaviour, the local competitive environment or the local market situation at an early stage and initiate the necessary steps. In 2012, for example, the sales lines closed 4 department stores – as it announced it would do – in Gießen, Cologne-Kalk, Nuremberg-Aufseßplatz and Oberhausen-City. The reason for the closures was that these department stores offered no business or strategic potential to be operated profitably over the long run. Socially fair solutions were found for the affected employees. Many received new jobs at nearby department stores.
Emotionalisation of the brand
In 2012, our sales line teamed up with creative partner Wolfgang Joop, the internationally renowned fashion designer, to refine its marketing concept. The objective was to improve consumers’ emotional connection with the Galeria Kaufhof brand. The campaign “Herbst Trends 2012” (Autumn Trends 2012) placed the partnership on a new level. Wolfgang Joop provided trend advice for the women’s and men’s fashion assortments, and Galeria Kaufhof applied his recommendations to the entire textile assortment. Another highlight was the creation of “Wofi-Bär” (Wofi Bear). The limited-edition teddy bear made by the German toymaker Steiff is a homage to the respected company’s classic toy. In addition, Wolfgang Joop designed a jewellery line for the “GALERIA Design” own brand. The angel and angel wing designs were popular ideas for Christmas gifts.
Bringing responsibility to life
In 2012, Galeria Kaufhof received the Inclusion Award of the German business organisation Unternehmensforum, a cross-sector association of companies that works to actively include people with physical and cognitive impairments in the workforce. To honour efforts in this area, Unternehmensforum presented the Inclusion Award for the first time during the financial year. The jury’s reasoning for granting Galeria Kaufhof the award was that the sales line practised inclusion in daily business and devised innovative solutions to successfully integrate people with disabilities into the so-called first labour market. Galeria Kaufhof’s approach to inclusion is applied with the customer in mind. The sales line designs its department stores to be as barrier-free as possible to facilitate access for many people. Around three-quarters of all outlets offer a special shopping assistance service for blind and visually impaired persons: specially trained employees accompany and support these customers free of charge while they shop at Galeria Kaufhof. In addition, more than 70 department stores in Germany bear the quality seal “Generationenfreundliches Einkaufen” (Shopping for all generations) awarded by the German Retail Federation (HDE). It is presented to retailers who make shopping for persons of all age groups as comfortable and barrier-free as possible. Criteria include easily accessible entrances, wide main corridors, easily legible signs and displays and seating areas in the selling space.