Strategic Service Innovation Management in Retailing

Amazon is the world’s largest online entertainment retailer, positions itself as the world’s most customer-centric company, and has generated very strong competition for most traditional retailers. Still, some traditional retailers succeed in maintaining, or even increasing, their competitive position – albeit at the expense of profitability. Fnac is a France-based pan-European book retailer, with currently one store outside Europe, in Brazil. They are active in many large European cities. The company entered the market with a relatively simple vision and mission: make culture available to the masses, offer more choice than local booksellers and, if possible, at a lower price. However, when Amazon entered the market, the competition was immediately noticeable. Amazon was offering an even larger choice at even lower prices. The company reluctantly entered the e-tailing channel, but never achieved sales numbers through that channel that were even close to Amazon’s. Fnac realized that they apparently could not beat Amazon in a home match. They would need some rather innovative ideas to remain competitive. They focused on innovating and further improving the customer experience, which was what they esteemed to be good at. They organized live discussion forums with famous writers, invited live musicians into the stores, and added complementary services, such as a book café, where people could simultaneously enjoy drinks and browse a book. They increased the frequency of signing sessions, and tried to turn their stores into genuine temples of culture and the place to be for culture lovers.