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Karstadt

Challenge

In a move to re-ignite the German-based Karstadt retail brand, Karstadt's newly hired CEO sought a new marketing communications approach, one that his management team could embrace and execute successfully. At the time, Karstadt operated 89 department stores and 28 specialty sporting goods shops employing 68K employees with annual sales of €15.5 billion. Karstadt was struggling with a highly promotional-focused environment which was negatively impacting the business. Additionally, Karstadt was experiencing diminished brand recognition and shrinking sales.

To help drive the initiative, the CEO wanted to provide his management team with unique market intelligence tools so they could quickly align their areas in support of his vision and strategy. A primary requirement was to better understand the then-thriving U.S. retail arena for strategic marketing and merchandising inspiration and to translate those key learnings into positive action for the ailing company.

Solution

Karstadt engaged the services of HAMILTON GROUP (HG), led by RVA President Mary Hamilton, to develop and execute a Marketing Communications Plan to help Karstadt regain traction in the market, improve sales and margins.

HG accepted the challenge to come up with a communications 'kit of tools' to monitor, evaluate, and track timely and critical information on current U.S. retail marketing, merchandising, and sales strategies with reports that included the evaluation of those identified strategies on bottom-line performance and R.O.I.

Overall, HG's goal was to provide Karstadt's key decision-makers with timely and critical information that could be easily synthesized into actionable marketing communications strategies to re-ignite the brand, create a seamless 'Voice' for the brand, and reverse their downward sales trend.

HG created and managed the 'Uber Report,' an exclusive and proprietary online site that provided easily accessible tools to use for analysis, business decisions and industry knowledge where and when Karstadt management required the information. Published online quarterly with additional weekly and monthly reports to refresh the site, the content included analysis of notable current American retail marketing, merchandising and sales strategies in addition to 'bullet notes' about emerging product and consumer trends.

Prior to producing the first Uber Report, HG worked with the management team to gain consensus on their key interests and challenges. Karstadt was also presented with a menu of topics to be considered for further development. Content direction was reviewed prior to each subsequent Uber Report to ensure that the information provided was useful, actionable and targeted.

Columns included: Feature Story, the Market in Brief, the Market Outlook, Key Industry Drivers, Competitive Forces, Positioning, Strategic Initiatives, Industry Profiles, Integrated Marketing Report, Trends & Designers to Watch and Consumer Insights & Marketing Intelligence.

Results

Providing a proprietary and highly targeted online report geared toward the specific interests of Karstadt's management team was extremely well received by the CEO and the management team. Several key results of the Uber Report:

  1. The Uber Report became the go-to resource for the executive team and it helped them to closely align with the CEO's vision because they quickly learned what was important to him. Within the first 2 months they began operating with 'One Voice.'
  2. The Executive team used the information to discuss, develop and implement strategic initiatives within their respective areas of responsibilities. Key learnings from the Uber Report were incorporated into such areas as: customer loyalty & engagement, visual presentation, merchandising, advertising, events & public relations and data base marketing, among others.
  3. After the first 3 months there were visible signs of a brand re-launch and Karstadt was in turn-around mode with sales on the rise.

About Karstadt: Karstadt, based in Essen, Germany, is one of the leading and most recognized retail companies in Germany, with 86 stores, 28 Sports Centers, and the premium online store karstadt.de. Karstadt averages more than 1 million visitors per day, and boasts a store portfolio with prime locations nationwide including the KaDeWe in Berlin, the second largest department store in Europe with 55,000 sq. meters (590,000 sq. ft.) of sales space.

Hamilton Group (HG) is an Richard Vorisek Associates Partner, founded by RVA President, Mary Hamilton