Rethinking the cost base in online retail
Supported an online multi-category retailer in a radical rethink of their cost base to generate sustainable savings.
The client’s successful implementation of the resulting programme overcame organisational fatigue with in-year cost challenges, to deliver sustainable savings of 15% of the addressable cost base over 3 years.
Our client, a multi-category online retailer, had ambitious plans to improve profitability through cost reduction, but their cost base and drivers were poorly understood, and the organisation was fatigued with frequent in-year cost-out challenges that never seemed to tackle the big issues.
Our job was to work with departments to ideate and shape a single integrated programme that would deliver sustainable improvements over three years, taking out 10-15% of the addressable cost base.
In 10 weeks, we combined detailed cost analysis, including activity-based costing, with department-by-department idea generation and competitor benchmarking. Working closely with client teams, we identified, sized and prioritised opportunities across the organisation and integrated them into a single programme that the organisation could put its energy behind.
Our client led the implementation and successfully executed the programme, taking out 15% (>£90m) of the addressable cost base over three years.