Our strategic priorities allow us to compete locally with global capabilities for our customers' benefit.
This strategy enables us to enhance profitability through operating leverage and efficiency initiatives, while driving strong cash generation and resilient growth. Our proposition differentiates us from competitors in the eye care marketplace.
We will maintain our global leadership and enhance our proposition by continuing to meet our customers’ changing needs.
To do this, we have based our strategy on five fundamental priorities.
1 Drive comparable revenue growth
We consider comparable revenue growth to be the most sustainable and profitable source of growth, as it strongly leverages our existing cost base. Comparable growth is mainly driven by the flawless execution of all our strategic enablers, be it in our stores or via our digital channels. We put a strong focus on staff training, store and product renewal and incremental conversion through omnichannel in order to increase our comparable revenue growth.
2 Strengthen and deploy global capabilities
We strongly believe in the symbiosis of local market management supported by strong global economies of scale. We have added many new businesses and markets through acquisitions, which have led to strong growth and an even more global footprint. All operating companies by themselves have strong operational capabilities. However, in light of accelerated industry consolidation and new strategic challenges from digital and vertical mono-brand concepts, we will deploy even stronger global capabilities in order to create the necessary economies of scale.
The focus of our central activities lies in installing global digital systems and knowledge, creating and operating a global end-to-end value chain including Exclusive Brands and procurement, as well as the deployment of globally standardized processes and systems.
3 Optimize the existing store network
Market share growth is one of our main areas of focus, and adding new stores to our network to further increase the proximity to our customers is key to achieving this goal.
In addition, we consistently evaluate GrandVision stores by a set of parameters ranging from location attractiveness to financial performance. This globally standardized KPI set serves as a basis for targeted store opening, relocation, refurbishment and closure decisions. As a result, the ultimate measure of this is store profit contribution.
4 Expand organically in current markets, and through bolt-on acquisitions
The majority of the optical retail markets we operate in are highly fragmented with many independent retailers operating single stores or small chains. This provides us with an ongoing opportunity to expand through acquisition of independent stores, franchisees or small to medium chains (bolt-on acquisitions) in existing markets and to integrate these businesses into our existing network.
5 Enter new markets through acquisitions or greenfield approach
We continue to evaluate potential new markets by looking at macroeconomic factors, market growth and the local conditions for operating an optical retail chain.
Our five strategic accelerators
- Turn customers into fans and increase their lifetime value: Our goal is to provide unique, high-quality and affordable eye care solutions to a growing number of customers worldwide. By this, we aim to leverage our best-in class customer value proposition from store experience to product excellence and at securing undisputed global category leadership as the preferred choice for eye care.
- Create leading digital value proposition and boost e-commerce sales: Our goal is to become an omnichannel leader with more than 10% of e-commerce sales by 2023. As of late 2018, we embarked on a strategic transformation to provide all operating companies with state-of-the-art digital platforms from e-commerce to CRM with a material amount of our investments being directed into this area.
- Boost end-to-end Product Value Chain and leverage economies of scale: Our goal is to operate the most effective and efficient global Product Value Chain in optical retail. The transformation process spans from the consolidation of suppliers and Regional Fulfilment Hubs (RFHs) to creating globally standardized assortments with upgraded assortment attractiveness, as well as establishing showroom models in every store to creating better global data transparency and management processes. Through these, we are working to reduce lead times and inventory levels, increase margins, improve buying conditions and develop effective global go-to-market processes.
- Create the organization of the future: Our goal is to become one of the most sought-after employers in the optical retail space. To achieve this, we have focused on aligning the organization globally with our new strategic directions. We have also improved our training and learning efforts, as well as our talent management approach.
- Strengthen market share through strategic acquisition: Our goal is to continue our accelerated growth trajectory. We continue to capture additional market share in Europe with small bolt-on acquisitions and the consolidation of independents. We also consider pure-play online propositions if they add value for our customers or align with our existing business, while maintaining high service and quality levels.