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Interflora’s Digital Transformation
Interflora is Denmark's undisputed market leader in the purchase and delivery of flowers and gift greetings. For many years, Interflora.dk has been the focal point of the link between digital Interflora Denmark and the approximately 400 florists across the country, who until the beginning of 2018 owned Interflora Denmark through the association of Interflora florists. The ownership structure represented a challenge as intensive cost focus limited investment in digital development. The consequence was that Interflora: 1) Had no internal organization for digital development and was over-dependent on external suppliers. 2) Had to opt-out of ambitious investments in data and analysis. 3) Was unequivocally dependent on mass communication and paid digital advertising. A new private equity owner, the executive board and the board of directors of Interflora set an ambitious strategic direction for the digital transformation of the company. The strong foundation and ambition made Interflora attractive to foreign investors with the means to increase the rate of investment and reach the targets faster. In mid-2018, Interflora can announce that the capital fund MyFlower (which also owns Interflora in France, Spain, Portugal, Italy, and Luxembourg) will take over the majority stake in Interflora Denmark. The new ownership allows Interflora Denmark to accelerate investment in growth and strategic direction. Towards new goals Interflora set a number of concrete goals for both efforts and results: 1) Establishing own competences that could partly reduce the dependence on external partners and partly benefit from the strategic partners chosen. 2) Building both technical infrastructure and applying advanced machine learning models to improve the customer experience. 3) Doubling the growth rate of turnover on interflora.dk from X to Y (note that Interflora was already the market leader in a market that has zero development on e-commerce and has had it for several years despite the general growth in e-commerce) 4) Increased profitability Anchoring in the top management Work on the restructuring has been run by Zvi Goldstein who is CMO and co-owner of Interflora Denmark in close cooperation with Søren Flemming Larsen who is CEO and also co-owner. In addition, the newly appointed CTO, Jesper Bisgaard, has played a crucial role. The partners have been the digital consultancy Responsive, who has contributed with strategy, establishment of infrastructure for data & analytics solution and development of Interflora's pioneering and award-winning artificial intelligence (including gold and prizes in 3 categories in DDA 2019 and grand prix at Rambuk 2019). In addition, the e-commerce agency Adapt has contributed development assistance to interflora.dk. DANSK Baggrund Udfordringen i en utidssvarende ejerstruktur Interflora er Danmarks ubestridte markedsleder indenfor køb og levering af blomster- og gavehilsner. Interflora.dk har i mange år været omdrejningspunkt for koblingen mellem det digitale Interflora Danmark og de cirka 400 florister over hele landet, som indtil primo 2018 ejede Interflora Danmark gennem foreningen af Interflora florister. Ejerstrukturen repræsenterede en udfordring idet et intensivt omkostningsfokus begrænsede investeringerne i digital udvikling. Konsekvensen var bl.a. at Interflora 1) Havde ingen intern organisation til digital udvikling og var over-afhængige af eksterne leverandører 2) Måtte fravælge ambitiøse investeringer i data og analyse 3) Var entydigt afhængige af massekommunikation og betalt digital annoncering En ny private equity ejer Direktionen og bestyrelsen i Interflora satte en ambitiøs strategisk retning for den digitale transformation af virksomheden. Det stærke grundlag og de store ambitioner gjorde Interflora attraktiv for udenlandske investorer med midler til at øge tempoet for investeringerne og nå hurtigere frem til målene. Medio 2018 kan Interflora offentliggøre, atkapitalfonden MyFlower (som også ejer Interflora i Frankring, Spanien, Portugal, Italien og Luxemburg) overtager aktiemajoriteten i Interflora Danmark. Det nye ejerskab giver Interflora Danmark mulighed for at accelerere investeringerne i væksten og den strategiske retning. Mod nye mål Interflora satte en række konkrete mål for såvel indsats som resultater: 1) Etablering af egne kompetencer som kunne dels reducere afhængigheden af eksterne samarbejdspartnere og dels få større udbytte af de valgte strategiske partnere 2) Opbygning af både teknisk infrastruktur og applicering af avancerede maskinlæringsmodeller til forbedring af kundeoplevelsen 3) Fordobling af vækstraten af omsætning på interflora.dk fra X til Y (bemærk at Interflora allerede var markedsleder i et marked som har nul-udvikling på e-handel og har haft det i adskillige år trods den generelle fremgang indenfor e-commerce) 4) Øget lønsomhed Forankring i topledelsen Arbejdet med omstillingen har været drevet af Zvi Goldstein som er CMO og medejer af Interflora Danmark i tæt samarbejde med Søren Flemming Larsen der er CEO og ligeledes medejer. Dertil har den nyansatte CTO, Jesper Bisgaard spillet en afgørende rolle. Samarbejdspartnerne har været det digitale konsulenthus Responsive som har bidraget med strategi, etablering af infrastruktur til data & analytics løsning samt udvikling af Interfloras banebrydende og prisvindende kunstige intelligens (bl.a. guld og priser i 3 kategorier i DDA 2019 og grand prix ved Rambuk 2019). Derudover har e-commercebureauet Adapt bidraget med udviklingsbistand til interflora.dk. Løsning Eksekveringen af strategien har været delt i 3 dele: 1) Insourcing af udvalgte kompetencer med henblik på at etablere en agil organisation, bestående af interne og eksterne kompetencer. 2) Etablering og udbygning af den samlede digitale infrastruktur. 3) Aktivering af Interfloras førstepartsdata og proprietære kunstige intelligens i en sammenhængende Customer Experience. 1. Begavet insourcing giver effektfuld hybrid Ansættelsen af Jesper Bisgaard som CTO blev startskuddet til en stærkere intern organisation til digital udvikling. Det nye hold består af både backend- og frontend udviklere samt kompetencer indenfor UX og digitalt design. Også marketingorganisationen har Interflora oprustet for at kunne spille bedre sammen med både kollegaer og samarbejdspartnere, bl.a. med etableringen af roller som ’digital forretningsudvikler’ og ’dataarkitekt’. I processen er eksterne samarbejder skåret væk, nogle reduceret og andre gjort mere strategiske. Det er vigtigt at understrege, at insourcingen aldrig har været tænkt som en ”alt skal inhouse” løsning. Både Søren Flemming Larsen og Zvi Goldstein er fast overbeviste om, at nøglen ligger i hybridmodellen med få, udvalgte partnere som er knyttet tæt til Interflora i samspil med stærke interne kompetencer. 2. Udvidelse af den digitale infrastruktur Parallelt med organiseringen begyndte arbejdet med at identificere nye tiltag og optimere eksisterende. IT-strategisk var førsteprioriteten at etablere en Customer Data Platform som omdrejningspunkt for den digitale kundeoplevelse. CDP’en er i dag integreret med alle Interfloras kunderelaterede datakilder, bl.a. interflora.dk, marketing automation platformen, ERP systemet, Google 360 og andre. Ligeså væsentlig som CDP’en var erkendelsen af, at Interfloras AI skal være en integreret del af kundeoplevelsen på tværs af tid og kontaktpunkter. Det betød en dedikeret platform, flere og mere robuste processer og faste iterationer på videreudviklingen af maskinlæringsmodellen. 3. Aktivering af AI og 1. partsdata i Customer Experience initiativer I forbindelse med ethvert køb på interflora.dk – og i den efterfølgende interaktion med kunden efter købet – bliver AI-økosystemet aktiveret op mod 10 gange gennem kunderejsen. Første gang i en nyudviklet produktanbefaler på interflora.dk, hvor kortlæser-AI’en sættes sammen med andre algoritmer der leder efter mønstre i tidligere køb (produktkategorier, prispunkter o.a.) og anbefaler tilkøbsprodukter der matcher kundens intention, anledning og relation til modtageren. Kombination af kortlæser-AI og det store datasæt bliver desuden sat i spil gennem digital annoncering umiddelbart efter købet, i en serie sms’er og emails op til levering, på Mit Interflora, i alle de store mærkedagskampagner, løbende i Interfloras newsletter og i de automatiserede flows (bl.a. velkomst og genkøb) som er basrytmen i markedsføringen. Resultat Interfloras nye digitale organisation er etableret i den planlagte skala og med de planlagte kompetencer. Teamet har arbejdet kontinuerligt sammen siden sommeren 2019 og har defineret et fælles metode- og procesapparat med afsæt i agil udvikling. Nogle konkrete resultater i det interne team er: - Reduktion af tidsforbrug på sammenlignelige udviklingsopgaver med mere end 30% ift. tidligere outsourcet model - Reduktion af time-to-market på sammenlignelige udviklingsopgaver med næsten 60% ift. tidligere outsourcet model Derudover er produktiviteten (målt som output af features indenfor samme budgetramme) hos CX-samarbejdspartneren, Responsive, er øget med 25% på baggrund af integrerede samarbejdsprocesser. Den implementerede Customer Data Platform er defineret som best practice i MyFlower koncernen. Kortlæser-AI modellen og platformen til udvikling af nye modeller er planlagt til at blive rullet ud til MyFlower i Frankrig, Spanien, Italien og Portugal i løbet af 2020. Et omfattende arbejde med salgmodellering og -attribuering på tværs af (digitale og analoge) kanaler har givet en velforankret model til forståelse af de forskellige indsatsers bidrag til omsætning og lønsomhed. Modellen er ikke en forenklet last-click-attribution model men en samlet model, der tager højde for de forskellige kanalers relative bidrag undervejs i kunderejsen. På baggrund af modellen kan vi udtale os særdeles velfunderet om resultaterne og deres indbyrdes sammenhæng. I perioden 2017-2019 er Interflora Danmark samlet set vækstet med 14,5%. Af den samlede vækst kan 45,7% tilskrives de CX initiativer, hvor 1. partsdata og AI spiller en afgørende rolle. I den korte periode er CX initiativerne gået fra ikke at eksistere (arbejdet blev forsigtigt startet op i 2017) til at udgøre 5,8% af den samlede omsætning. CMO og partner i Interflora Danmark, Zvi Goldstein: ”Vores omstilling fra at være en administrativ enhed i en forening med en webshop til at være en digital virksomhed er den største bedrift i Interflora Danmarks historie. Vi har i rekordfart opbygget en organisation, en fælles arbejdsmåde og høstet de første frugter af både vores interne indsats og et langt bedre samarbejde med vores strategiske partnere.” (English translation + Google translate) Background The challenge in an outdated ownership structure Interflora is Denmark's undisputed market leader in the purchase and delivery of flower and gift greetings. For many years, Interflora.dk has been the focal point of the link between digital Interflora Denmark and the approximately 400 florists across the country, who until the beginning of 2018 owned Interflora Denmark through the association of Interflora florists. The ownership structure represented a challenge as intensive cost focus limited investment in digital development. The consequence was that Interflora 1) Had no internal organization for digital development and was over-dependent on external suppliers 2) Had to opt out of ambitious investments in data and analysis 3) Was unequivocally dependent on mass communication and paid digital advertising A new private equity owner The board of directors and the board of directors of Interflora set an ambitious strategic direction for the digital transformation of the company. The strong foundation and ambition made Interflora attractive to foreign investors with the means to increase the rate of investment and reach the targets faster. In mid-2018, Interflora can announce that the capital fund MyFlower (which also owns Interflora in Frankring, Spain, Portugal, Italy and Luxembourg) will take over the majority stake in Interflora Denmark. The new ownership allows Interflora Denmark to accelerate investment in growth and strategic direction. Towards new goals Interflora set a number of concrete goals for both efforts and results: 1) Establishing own competences that could partly reduce the dependence on external partners and partly benefit from the strategic partners chosen 2) Building both technical infrastructure and applying advanced machine learning models to improve the customer experience 3) Doubling the growth rate of turnover on interflora.dk from X to Y (note that Interflora was already the market leader in a market that has zero development on e-commerce and has had it for several years despite the general growth in e-commerce) 4) Increased profitability Anchoring in the top management Work on the restructuring has been run by Zvi Goldstein who is CMO and co-owner of Interflora Denmark in close cooperation with Søren Flemming Larsen who is CEO and also co-owner. In addition, the newly appointed CTO, Jesper Bisgaard, has played a crucial role. The partners have been the digital consultancy Responsive, who has contributed with strategy, establishment of infrastructure for data & analytics solution and development of Interflora's pioneering and award-winning artificial intelligence (including gold and prizes in 3 categories in DDA 2019 and grand prix at Rambuk 2019 ). In addition, the e-commerce agency Adapt has contributed development assistance to interflora.dk. Solution The execution of the strategy has been divided into 3 parts: 1) Insourcing of selected competencies in order to establish an agile organization, consisting of internal and external competencies. 2) Establishment and expansion of the overall digital infrastructure. 3) Enabling Interflora's first-party data and proprietary artificial intelligence in a coherent Customer Experience. 1. Gifted Insourcing Provides Effective Hybrid The hiring of Jesper Bisgaard as CTO was the starting point for a stronger internal organization for digital development. The new team consists of both backend and frontend developers as well as UX and digital design competencies. Interflora has also built up the marketing organization to be able to play better with colleagues and partners, among other things. with the creation of roles as 'digital business developer' and 'data architect'. In the process, external collaborations have been cut away, some reduced and others made more strategic. It is important to emphasize that insourcing has never been conceived as an "all in-house" solution. Both Søren Flemming Larsen and Zvi Goldstein are firmly convinced that the key lies in the hybrid model with few selected partners who are closely linked to Interflora in interaction with strong internal competencies. 2. Expanding the digital infrastructure In parallel with the organization, work began on identifying new initiatives and optimizing existing ones. IT strategic was the first priority to establish a Customer Data Platform as the focal point of the digital customer experience. Today, the CDP is integrated with all Interflora's customer-related data sources, including interflora.dk, the marketing automation platform, the ERP system, Google 360 and others. As important as the CDP was the recognition that Interflora's AI must be an integral part of the customer experience across time and contact points. This meant a dedicated platform, more and more robust processes and fixed iterations on the further development of the machine learning model. 3. Activation of AI and 1st party data in Customer Experience initiatives In connection with any purchase on interflora.dk - and in the subsequent interaction with the customer after the purchase - the AI ecosystem will be activated up to 10 times through the customer journey. The first time in a newly developed product recommendation on interflora.dk, where the card reader AI is put together with other algorithms looking for patterns in previous purchases (product categories, price points etc.) and recommends products that match the customer's intention, occasion and relationship with the recipient. Combination of card reader AI and the large data set is also put into play through digital advertising immediately after the purchase, in a series of text messages and emails up for delivery, on My Interflora, in all the major anniversary campaigns, ongoing in Interflora's newsletter and in the automated flows (including welcome and repurchase) which are the basic rhythm of marketing. Result Interflora's new digital organization is established on the planned scale and with the planned competencies. The team has been working together continuously since the summer of 2019 and has defined a common method and process apparatus based on agile development. Some concrete results in the internal team are: - Reduction of time spent on comparable development tasks by more than 30% compared to previously outsourced model - Reduction of time-to-market on comparable development tasks by almost 60% compared to previous outsourced model In addition, productivity ( measured as output of features within the same budgetary framework) at the CX partner, Responsive, has been increased by 25% based on integrated collaboration processes. The implemented Customer Data Platform is defined as the best practice in the MyFlower Group. The card reader AI model and new model development platform are scheduled to be rolled out to MyFlower in France, Spain, Italy and Portugal during 2020. Extensive work on sales modeling and attribution across (digital and analogue) channels has provided a well-rooted model for understanding the contribution of the various efforts to revenue and profitability. The model is not a simplified last-click attribution model but a unified model that takes into account the relative contribution of the various channels along the journey of the customer. On the basis of the model, we can express very well-founded opinions on the results and their interrelationships. In the period 2017-2019, Interflora Denmark has overall growth of 14.5%. Of the total growth, 45.7% can be attributed to the CX initiatives, where 1st party data and AI play a crucial role. In the short period, the CX initiatives have gone from non-existent (work was started gently in 2017) to make up 5.8% of total revenue. CMO and partner in Interflora Denmark, Zvi Goldstein: “Our transition from being an administrative unit in an association with a webshop to being a digital company is the largest business in Interflora Denmark's history. In record speed, we have built an organization, a common way of working and reaped the first fruits of both our internal efforts and much better cooperation with our strategic partners. ”
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