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Featured case: Expanding the Traditional Retail Model:
Douglas' Path Towards a Multichannel Beauty Platform

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The case

whoWho – the protagonist

Tina Müller, Douglas CEO.

What?

Douglas is Europe’s leading specialist retailer of premium beauty products with €3.5 billion
in sales in 2019.

Why?

Douglas hasn’t been immune from the digitisation, innovation, and new consumer behaviour that has disrupted the whole economy

Tina, who became Douglas CEO in November 2017, knew a successful digital transformation was key to the company’s future.

When?

In March 2019, Douglas launched a beauty booking platform that allowed customers to book their beauty treatment at one of many handpicked hair salons and beauty studios.

And later that year, Douglas opened its existing online shop to third-party sellers offering other lifestyle accessories such as handbags and jewellery.

whereWhere?

The beauty industry in Germany is divided into beauty services, which accounts for 38%, and beauty products, which makes up 62%.

Key quote

“How can we become more aggressive? How can we grow stronger? And how do we position ourselves in relation to new competitors, especially in the online market? That’s why I initiated the transformation process.” – Tina Müller.

What next?

Tina prepared for a meeting with Alexander Dibelius, the German head of the private equity firm CVC Capital Partners, which owned 85% of Douglas.
She knew she would face critical questions including: which trade-offs were involved in this strategic shift? What was the rationale behind giving third-party sellers a seat at the table to benefit from Douglas’ established position in the beauty industry?

 
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Expanding the Traditional Retail Model: Douglas' Path Towards a Multichannel Beauty Platform
Ref 520-0102-1

Teaching note
Ref 520-0102-8

The authors

author

Werner Reinartz and Nico Wiegand

Werner discusses why this case proves popular for classroom debate and why Marketing cases work so well.

Lively class room debatePopular case

Werner said: “The Douglas case is highly current for a few reasons.

“It operates in a category that is well known to students, students are familiar with the retailer’s brand, and the subject of emerging retailing platforms is of high economic significance. In fact, Amazon Marketplace is the most successful retailing platform.

“Furthermore, the case showcases that platform business models can be set up in very different ways and the struggles especially traditional brands have when venturing into this direction (e.g. do I allow only complementary offerings or also direct competitors on the platform?).

“It is not clear whether and how Douglas will succeed in this transition – thus providing a good basis for a lively pros and cons discussion.”

Popular caseLively classroom debate

Werner continued: “Douglas is the leading beauty chain in Europe (2,400 stores in 24 countries). Hence, the company is truly international.

“Moreover, the subjects of e-commerce and platform building are very much transnational in nature.

“Finally, the re-balancing between physical store retailing and online e-commerce is of lively debate internationally. The core question, moving from store-based retailing to platform retailing, is a question that is global in nature.”

Well prepared

He added: “Today, with the COVID-19 situation, one knows that by implementing the platform approach, Douglas unknowingly sped up its preparedness for the online buying spree of consumers. This can be brought out well in the debrief of the case discussion.”

Power of Marketing cases

He concluded: “Marketing cases force the students to separate and isolate the core issues of the focal problem from the complex noise around it. This identification of what is really important in the respective case is not a trivial challenge to students and characterises a good case. Moreover, a good case allows one to convey the economic and behavioural principles behind the exemplary business problem.”

About the authors

Werner Reinartz is Professor of Marketing at the University of Cologne.
e werner.reinartz@uni-koeln.de
tw @ReinartzWerner

Nico Wiegand is Assistant Professor of Marketing at Vrije Universiteit Amsterdam.
e n.wiegand@vu.nl

 

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