Kosta Kartsotis, chairman and CEO of Fossil Group, has disclosed how the company will use digital tools to improve customer engagement.
Fossil has completed first New World Fossil Program, 1.0, delivering $200 million of run rate improvement across gross margin and operating expense over the last three years.
“We also launched New World Fossil 2.0 Transform to Grow Program to drive operational efficiency and improve profitability, while also providing us with the ability to invest in top line growth opportunities,” Kosta Kartsotis, chairman and CEO of Fossil Group, said during an analyst call.
Fossil achieved its target to capture benefits of $50 million, primarily via operating expense reductions in 2019. In 2020, the company expects to achieve additional benefits of $65 million, consisting of $15 million of gross margin improvement and $50 million of operating expense reduction.
Fossil CEO said the company’s product strategy, combined with a digital first marketing approach, drove more consumer engagement.
Fossil advanced its DTC and online marketplace businesses by optimizing the segment and assortment of strategy.
Fossil is focusing on four strategic priorities in order to improve operational efficiency in 2020 and position the company to begin reversing its top line trend and building scale in 2021, says Greg McKelvey, chief commercial officer at Fossil.
The company does not reveal its IT or digital budget. The ongoing digital transformation of Fossil is one of the top priorities for enhancing customer engagement.
Priority number one is delivering exceptional storytelling and innovation. “Although we’ll have fewer product stories in the market in 2020, we’re going to tell them in bolder ways through focused digital marketing programs,” Kosta Kartsotis said.
Fossil has expanded the use of data and analytics, which is improving ability to understand consumer trends and preferences, and how to more effectively interact with the customer digitally.
Fossil will be launching connected LTE product this year, and aggressively expanding in the CE and telecom channels, while reducing connected presence and select wholesale accounts and brands.
Priority number two is driving commercial transformation. The consumer is gravitating to all things digital. Fossil will improve digital capabilities across the company. This encompasses everything from multi-brand omnichannel capabilities, digital marketing and CRM, to analysis, targeting, and retention.
The implementation of e-commerce platform is in process now. Fossil aims to achieve solid growth in direct to consumer business channel in 2020. Fossil closed 45 stores ending the year with 451 Fossil locations in 2019.