For 134 years, the Galeria Kaufhof sales line has stood for customer trust. It is the market leader in the department store segment in Germany and Belgium. Galeria Kaufhof is positioned as a modern retail brand and as a competent multichannel retailer 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 5,000 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 sporting goods stores under the names Sportarena and Wanderzeit. In Belgium, the sales line operates 15 stores under the Galeria Inno name. The service company Dinea is also part of Galeria Kaufhof. It operates the restaurant section in around 60 department stores in Germany.
Integrated multichannel marketing strategy
Consumers want to experience the trusted brand Galeria Kaufhof in all available sales channels: shopping in stores at central locations, 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 is rigorously forging ahead with its effort to dovetail its sales channels. Linking online sales with stationary retail not only offers added value to customers. It also gives the sales line an edge over competitors. In contrast to pure online shops, large multichannel retailers can offer all-round service. This means one thing: 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. The broad range of options opens up myriad opportunities for communicating and interacting with customers.
Our sales line launched its mobile shop during the period under review. Customers can now conveniently shop at galeria.de on their smartphones. To announce the launch of the shop, Galeria Kaufhof published QR codes in fliers and hung them in display windows. The codes can be scanned by smartphones to access the corresponding offer in the mobile shop.
The aim of this multichannel marketing approach is to tap even more customer groups and give customers the option of making their purchases through the online shop as well as in department stores. During the reporting period, our sales line tapped additional sales potential by adding more well-known brands to its product range and expanding inventory by more than 25 per cent. Furthermore, many new online customers, who have previously only made their purchases in stationary stores, spend 25 per cent more when they shop online. Compared with the first nine months of 2012, online sales at Galeria Kaufhof more than doubled.
Modernisation process continued
To improve customers’ shopping experiences in department stores and tap existing potential, Galeria Kaufhof continued its modernisation effort and remodelled 14 stores in 2013 – without interrupting business. Part of this work entailed giving these department stores a facelift. The sales line also used the upgrade to tailor assortments to local needs as well as the market situation and competition in local areas. After all, the relationship between customers, the local market and local competitors varies from store to store. Customer needs guide this work – for each assortment and tailored to local requirements.
The complete reconstruction of the Galeria Kaufhof department store in Münster was the largest modernisation project carried out during the reporting period. Based on the findings of analyses of this store’s customer segment and competitive environment, renovation work primarily focused on improving the store’s hardware department. The objective is to become the leading provider of beauty products, accessories, household goods and home textiles in Münster.
By regularly conducting analyses, Galeria Kaufhof ensures that it can quickly respond to changes in shopping behaviour, the local competitive environment or the local market situation at an early stage and initiate the necessary steps. Based on such analyses, our sales line decided in 2013 to close the department stores located in Düsseldorf Berliner Allee (late 2014), Augsburg (mid-2015) and Heilbronn Am Wollhaus (late 2015). These department stores offered no business or strategic potential to be operated profitably over the long run. Company management and employee representatives are developing socially fair solutions for the affected employees.
Galeria Inno expands
In Belgium, our sales line will open a new Galeria Inno department store in the fashion city of Hasselt in the Limburg province at the end of 2014. With this new department store, the number of Galeria Inno outlets the company operates in all major cities across Belgium will increase to 16. The store in Hasselt will feature selling space upwards of 8,000 square metres over four floors. It will employ nearly 100 people starting in 2015. Over the course of the next 18 months, the owner will convert the property to meet the needs of a modern department store located in a city centre.
Cutting-edge technology for convenient payments
To enable customers to pay for their purchases quickly and conveniently, our sales lines installed around 3,500 card payment terminals of the latest generation at its German stores in 2013. Contactless payment is now possible at these stores: using the Visa’s payWave credit card, MasterCard’s PayPass card and, in future, NFC-enabled mobile phones. The customer’s signature or personal identification number (PIN) is only required for purchases over €25. This cuts the duration of the payment process to just a few seconds. NFC stands for near field communication . Using this technology, information can be securely sent to another device without the devices touching. It utilises NFC tags that are also integrated into credit cards and mobile phones.
Successful creative partnership
Galeria Kaufhof has successfully worked together with Wolfgang Joop, the internationally renowned fashion designer, since 2010. In collaboration with its creative partner, our sales line further refined its integrated concept entailing seasonal topics, inter-product group topics, events and product presentation in stores during the reporting period. The aim of this work is to improve consumers’ emotional connection with the Galeria Kaufhof brand. One result of this collaboration was the limited-edition cocktail dress “Unforgettable”, which customers could purchase exclusively in various Galeria Kaufhof department stores and online in spring 2013.
For Valentine’s Day, Galeria Kaufhof’s creative team and Wolfgang Joop designed a braided leather bracelet in various colours with heart-shaped charms. In summer 2013, Galeria Kaufhof and Wolfgang Joop unveiled the traditional outfit “Alpine Couture” to fashion journalists and bloggers at two press lunch events in Hamburg and Munich. The star designer created the outfit especially for the 2013 Oktoberfest season. Wolfgang Joop also provided trend advice and served as a creative adviser for the sales line’s own-brand autumn/winter 2013/14 collection.