GROUP ASSIGNMENT

ALDO'S GLOBAL OMNICHANNEL IMPERATIVE

Name Student ID Contribution Question

Trần Duy Long SS171264 100% What allowed ALDO to reach the
position it holds today?

Trần Lê Quỳnh SS171252 100% Why did ALDO decide to use a national
Như franchise to grow abroad?

Nguyễn Thị Ngọc SS171245 100% How does e-commerce challenge or

Bích build upon ALDO's advantage?

Lê Hoàng Đức SS170573 100% Given that ALDO has this historical
legacy of national franchises, what does
ALDO need to grow e-commerce
abroad?

Tôn Nữ An Bình SS171185 100% Should ALDO change its international

growth strategy?

Nguyễn Huỳnh Tấn SS171283 100% What are the challenges of adopting an
Tài omnichannel strategy for ALDO?
What should the role of the physical
store be?

Class: MKT1702 | Course: Omnichannel Marketing (MKT309m)

Lecturer: Du Tieu Duong
Submission Date: 29/5/2024

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Table of Contents
I. Introduction.....................................................................................................................4
II. Factors that allowed ALDO to reach its current position..............................................4
1. Strategic Expansion and Franchise Model..............................................................................4
2. Vertical Integration and Speed to Market...............................................................................4
3. Adaptation to E-commerce and Omnichannel Strategy..........................................................4
4. Customer-Centric Approach...................................................................................................5
III. Rationale for using National Franchises for International Growth..............................5
1. Capital Preservation................................................................................................................5
2. Rapid Expansion.....................................................................................................................5
3. Minimizing Business Risks and Leveraging Local Competitive Advantages..........................5
4. Enhancing Brand Recognition and Global Presence...............................................................6
5. Optimizing Management and Operations...............................................................................6
IV. E-commerce challenges or build upon advantages for ALDO.......................................6
1. Challenges Posed by E-commerce...........................................................................................6
(a) Customer Journey....................................................................................................................................6
(b) Increased Competition.............................................................................................................................6
(c) Foot Traffic Decline..................................................................................................................................7
2. Opportunities for ALDO in an Omni-channel Landscape......................................................7
(a) Global Expansion.....................................................................................................................................7
(b) Personalized Customer Experiences.......................................................................................................8
(c) Innovative Technology Adoption.............................................................................................................8

V. Requirements for growing E-commerce abroad given historical franchise legacy.............8

1. Cooperation with Franchise Partners.....................................................................................8
2. Omnichannel Strategy Development.......................................................................................9
3. Developing a Centralized Management System......................................................................9
4. Investing in Technology and Infrastructure............................................................................9
5. Integrating Global Marketing Activities.................................................................................9
VI. Consideration for changing ALDO’s International Growth Strategy...........................10
1. Some problems that ALDO is facing.....................................................................................10
(a) E-commerce disruption and reduced customer traffic........................................................................10
(b) Limitations of the franchise model in the era of e-commerce.............................................................10
2. Given the challenges ALDO is facing, adjusting its international growth strategy is essential
in the rapidly evolving e-commerce market...................................................................................10
(a) Expanding franchises in key regions....................................................................................................10
(b) Develop an Omnichannel strategy...................................................................................................11

VII. Challenges of adopting an omnichannel strategy........................................................12

1. Issues with Integrating Online and Offline Channels............................................................12
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 2. Adapting to Changing Consumer Behavior..........................................................................12
3. Managing Relationships with Franchise Partners.................................................................12
4. Investing in Technology and Infrastructure..........................................................................13
VIII. The role of the physical store in an omnichannel strategy.......................................13
1. Physical stores generate touchpoints for customers..............................................................13
2. Create a Seamless Customer Experience...............................................................................13
3. The store serves customers as a showroom............................................................................14
4. Is a distribution station where clients may pick up things they ordered/purchased online
(click-and-collect)..........................................................................................................................14
5. Brand Promotion and Real Experience.................................................................................14
6. Receive care and advice directly from staff...........................................................................14
IX. Conclusion.................................................................................................................15

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I. Introduction
Aldo is a Canadian shoe retailer founded in 1972 by Albert "Aldo" Bensadoun. The
company started as a shoe concession within a Montreal fashion retailer called Le
Chateau. Over the years, Aldo expanded to become a global retailer with 1,655 stores in
98 countries by 2015. Aldo's flagship brand targets fashion-conscious 18-30 year olds,
offering on-trend footwear and accessories at accessible prices. The company is vertically
integrated, handling everything from shoe design to retail operations. Aldo is known for
its fast speed to market, going from concept to store in 12 months or as little as 60 days
for "fast injection" models.

As of 2015, Aldo was facing increasing competition from fast fashion apparel companies
and online retailers, prompting the new CEO Patrick Frisk to focus on building Aldo's e-
commerce and omnichannel capabilities.

II. Factors that allowed ALDO to reach its current position

1. Strategic Expansion and Franchise Model
While the majority of Aldo's business has come from its own retail locations, the
company has also leveraged franchising to grow abroad, especially in areas outside of
North America and the United Kingdom. By utilizing the resources and local market
expertise of its franchisees, Aldo was able to expand rapidly thanks to this franchising
model. ALDO's growth has been largely attributed to its strategic expansion, both
nationally and globally. Using a franchise model, ALDO began its cross-border rollout
into the United States in 1993 and went on to develop into other international markets,
including the Gulf States, Asia, and Israel. With the help of franchisees' cash and local
expertise, ALDO was able to maintain its capital structure. ALDO operated 1,655+
outlets throughout 98 countries as of 2015.
2. Vertical Integration and Speed to Market
One of the significant factors that set ALDO apart is its vertical integration, which
includes end-to-end operations from shoe design to shop floor sales. This integration
allows ALDO to keep a close eye on fashion trends and rapidly bring new designs to
market. The company's ability to change 500 or so models every three months, with a
remarkable speed to market of 12 months from concept to shop floor, and even 60 days
for "fast injection" models, has enabled ALDO to stay ahead in the fast-paced fashion
industry.
3. Adaptation to E-commerce and Omnichannel Strategy
Recognizing the growing importance of e-commerce, ALDO has made significant
investments in developing its online presence. By 2005, ALDO had launched
transactional websites in Canada and the US, and by 2015, 10% of its North American
sales were coming from e-commerce, with an expected annual growth of 15%. ALDO's
commitment to an omnichannel strategy, which includes integrating online and offline
customer experiences, modernizing its digital infrastructure, and enhancing customer
touchpoints with digital tools, has positioned it well in the evolving retail landscape.

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 4. Customer-Centric Approach
ALDO's customer-centric approach is evident in its focus on understanding and adapting
to changing consumer behaviors. The company's commitment to providing a seamless
omnichannel experience, recognizing the tech-savviness of its core customers, and
focusing on product development and innovation reflects its dedication to meeting
customer expectations. The implementation of digital receipts, newsletters, and
personalized offers further enhances the customer experience and fosters loyalty.

III. Rationale for using National Franchises for International Growth

ALDO's Decision to Use National Franchising for International Expansion
1. Capital Preservation
Expanding into international markets requires significant capital investment for
establishing and operating new stores in different countries. By utilizing the franchise
model, the franchisor (the parent company) can leverage the capital of the franchisee
(local partners) to open and run stores, thereby reducing the financial burden on the parent
company.
2. Rapid Expansion
The franchise model allows for rapid expansion by leveraging the resources of multiple
franchisees. This enables the parent company to quickly establish a presence in many
countries and regions without significant investment in each new market. ALDO can
easily open and operate multiple stores in various countries simultaneously without
worrying about costs and staffing, as these responsibilities are handled by different
franchisees.

For instance, in 1993, ALDO entered the US retail market, opening its first ALDO US
store near Boston, Massachusetts. Over the next nine years, approximately 125 stores
were opened in the US. By the end of this period, ALDO also successfully operated over
180 stores in major shopping centers and prime fashion street locations in all major urban
centers in Canada.
3. Minimizing Business Risks and Leveraging Local Competitive Advantages
Local franchisees possess in-depth knowledge of the market, culture, consumer habits,
and legal regulations of their country. This increases the likelihood of success for the
parent company when entering new markets, reducing the pressure and risks associated
with directly operating overseas stores. Local franchisees can utilize existing
relationships, resources, and competitive advantages in their market to develop the
business more effectively. Franchisees can easily understand and adapt products and
business strategies to fit the local market.
For example, ALDO’s franchise partner in Singapore organized a photography exhibition
featuring local personalities wearing Aldo shoes for the #Perfect Pair story. Fifteen
photos, memorabilia cards, and Aldo Fights AIDS (AFA) bracelets were sold, with
proceeds going to AFA. This event increased brand awareness and connected with local
customers.
4. Enhancing Brand Recognition and Global Presence
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ALDO began international franchising in 1995, and by 2011, ALDO had a presence in 66
countries with 600 out of 1500 ALDO stores being franchise stores. Currently, ALDO is
present in over 100 countries. Being present in many countries and regions through
franchise stores helps enhance brand recognition and global presence. This not only
increases revenue but also strengthens the brand image worldwide, making ALDO a
familiar brand to customers thanks to its widespread coverage in various countries.
5. Optimizing Management and Operations
Franchisees are responsible for managing and operating local stores, reducing the direct
management burden on the parent company. This allows the parent company to focus on
business development strategies, product improvements, and exploring other markets.
Franchisees receive support from the parent company in terms of knowledge, training,
and operational assistance, ensuring that franchise stores operate efficiently and adhere to
the parent company's standards, maintaining consistency in brand image and customer
experience globally.
Since 2017, Schweitzer has been the ALDO Group's primary shopfit fixture development
partner, providing consultancy, executive support, technical development, and
implementation of the furniture and fixtures for both ALDO's own stores and its franchise
partners.

IV. E-commerce challenges or build upon advantages for ALDO

1. Challenges Posed by E-commerce
(a) Customer Journey
With the rise of e-commerce, the customer journey has shifted from traditional in-store
experiences to digital pathways. Consumers now engage with brands across multiple
online touchpoints, from social media and search engines to e-commerce platforms.
ALDO must address the challenge of fragmented touchpoints by ensuring consistency and
coherence across its digital presence. This involves aligning messaging, branding, and
user experience elements across various online channels to provide a seamless journey for
customers.Implementing a seamless omnichannel experience requires integration of
backend systems such as inventory management, order fulfillment, and customer
relationship management (CRM). ALDO needs robust technology infrastructure to
synchronize data and processes across online and offline channels.
(b) Increased Competition

Categories Characteristic Name Advantage

competitors

Traditional Shoe stores located in - Foot Locker Provide direct shopping

Brick-and- shopping centers and - DSW experiences and allow
Mortar Stores commercial areas - Famous customers to try out products
-Footwear before purchasing.

Pure-play Brands that operate - Zappos Focus on providing

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Online Brands exclusively online convenience and a wide
without physical stores - DSW.com selection of products for
- Shoes.com customers online.

Fast-fashion Not only offer shoes but - Zara The ability to quickly introduce
Giants also provide entire - H&M new trends to the market and
fashion collections - Forever 21 offer products at competitive
prices.

Table: ALDO's competitors

The expansion of e-commerce has led to a diverse landscape of competitors, ranging from
traditional brick-and-mortar retailers to pure-play online brands and fast-fashion giants.
ALDO must differentiate itself from competitors by emphasizing its unique value
proposition, such as its focus on trend-driven designs, accessible pricing, and vertical
integration. Communicating these strengths effectively is crucial in capturing market
share amidst fierce competition.

(c) Foot Traffic Decline

As consumers increasingly opt for the convenience of online shopping, ALDO faces the
challenge of declining foot traffic in its physical stores, particularly in North American
malls.
ALDO can address this challenge by reimagining the in-store experience to provide added
value beyond mere transactions. This may involve incorporating interactive elements,
experiential marketing activations, and personalized services to attract and retain
customers in-store.
2. Opportunities for ALDO in an Omni-channel Landscape
(a) Global Expansion
ALDO can maximize the potential of its franchise model by strategically selecting
franchise partners and territories that align with the company's e-commerce growth
objectives. For example, instead of focusing solely on traditional retail metrics such as
foot traffic and population density, ALDO can prioritize franchise partners with strong
digital capabilities and market knowledge. By partnering with franchisees who are adept
at leveraging online platforms and understanding local consumer preferences, ALDO can
ensure the success of its global expansion efforts in the digital age.
ALDO can capitalize on the growth of e-commerce to enter new markets where
traditional brick-and-mortar expansions may be impractical or cost-prohibitive. By
establishing robust online platforms customized to cater to regional preferences,
languages, and shopping habits, ALDO can effectively reach a wider audience globally.
(b) Personalized Customer Experiences
ALDO can harness data-driven insights from online interactions to personalize customer
experiences and tailor marketing efforts accordingly. Analyzing browsing behavior,
purchase history, and demographic data enables ALDO to segment customers and deliver
targeted promotions and recommendations.
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Implementing dynamic content personalization techniques, such as product
recommendations and personalized emails, enhances engagement and encourages repeat
purchases by catering to individual preferences and interests.
(c) Innovative Technology Adoption
ALDO can leverage augmented reality (AR) technology to enhance its online platforms
by offering virtual try-on experiences to customers. This allows customers to visualize
how the products will look in real-world settings before making a purchase, thereby
reducing uncertainty and increasing confidence in their buying decisions. By integrating
AR technology, ALDO can provide a more engaging and interactive shopping experience,
leading to higher customer satisfaction and potentially increased sales.
ALDO can deploy artificial intelligence (AI) solutions for various purposes such as
predictive analytics and customer service automation. By analyzing vast amounts of data,
AI can provide valuable insights into customer behavior, preferences, and trends, enabling
ALDO to make informed decisions and tailor its offerings to meet customer needs more
effectively. Additionally, AI-powered customer service automation can streamline
operations by handling routine inquiries and tasks, freeing up human resources to focus
on more complex issues and providing faster and more efficient service to customers.

V. Requirements for growing E-commerce abroad given historical

franchise legacy
ALDO, established an extensive franchise network with more than 1,655 stores in 98
countries in 2015. However, developing global e-commerce requires ALDO to eliminate
fragmented touchpoints and optimize the customer experience by creating consistency in
messaging across sales channels and media.
1. Cooperation with Franchise Partners
Franchise partners in different regions have deep insights into customer needs and
shopping habits. This cooperation helps ALDO leverage the knowledge and presence of
franchisees to tailor product and marketing strategies to each region. Specifically, ALDO
can use information from franchise partners to better understand which products are
popular in each area, allowing for adjustments to the product catalog to meet local
demand. Moreover, ALDO can collaborate with franchise partners to design local
marketing campaigns, from online advertising to in-store events, leveraging local media
and advertising channels to reach target customers more effectively.
Additionally, ALDO can utilize the infrastructure of franchise partners in different
regions, such as warehouses, transportation services, and on-site customer support, to
ensure quick and accurate delivery, thereby saving costs and improving the operational
efficiency of the e-commerce system.
2. Omnichannel Strategy Development
Integrating online and physical store sales channels to create a seamless shopping
experience allows customers to place orders, return products, and receive promotional
notifications at any ALDO store. This also helps the company manage inventory across
online and physical stores with real-time updates. Additionally, customers can check
stock availability at nearby stores and place online orders for in-store pickup or home
delivery.
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ALDO can also leverage customer data from e-commerce channels to personalize the
shopping experience. This data can be used to recommend products, send promotional
notifications, and provide better customer service. Additionally, providing quick and
personalized feedback based on customer data from e-commerce channels can enhance
customer satisfaction and loyalty.
3. Developing a Centralized Management System
To implement and operate e-commerce, a centralized management system is crucial. All
business and marketing activities should be planned and executed by ALDO to
synchronize data and processes between stores and e-commerce channels. This system
helps ALDO effectively track inventory status, orders, and sales performance.
Establish standard processes for franchise and e-commerce activities, including inventory
management, delivery, and customer service. This ensures consistency and efficiency in
operations across stores and guarantees all customers receive consistent and high-quality
experiences.
Provide training and technical support to franchise partners to ensure they can operate the
e-commerce system. ALDO can organize online and in-person training sessions, provide
instructional materials, and offer 24/7 technical support.
4. Investing in Technology and Infrastructure
Establish a global e-commerce platform to synchronize online sales activities worldwide.
This platform should have multilingual, multi currency features and support popular
payment methods in each market.
Develop a logistics infrastructure large enough to support quick and effective
transportation of goods to foreign markets. ALDO can partner with international logistics
companies to ensure efficient transportation, storage, and distribution of goods.
Leverage direct relationships with manufacturing plants, primarily in Asia, to reduce
shipping time and costs. ALDO should build strategic partnerships with suppliers to
ensure supply chain stability and continuity.
5. Integrating Global Marketing Activities
Use e-commerce platforms to execute global marketing campaigns with consistent
messages. These campaigns can be customized to suit the culture and preferences of each
local market without losing the core message. Use data analysis tools like Google
Analytics and other analytics tools to track the effectiveness of marketing campaigns and
adjust strategies in a timely manner. This helps ALDO optimize marketing costs and
achieve the best results. Continuously update key metrics such as CTR (Click-Through
Rate), Conversion Rate, CPA (Cost Per Acquisition), and ROAS (Return on Advertising
Spend).
Moreover, ALDO should leverage the power of influencers and social networks in local
markets to build credibility, attract customers, and enhance brand recognition. ALDO can
collaborate with influential local influencers to promote products and brands. Develop
specific influencer marketing strategies for each market, including selecting the right
influencers, defining core messages, and tracking campaign effectiveness.

VI. Consideration for changing ALDO’s International Growth

Strategy
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 1. Some problems that ALDO is facing
(a) E-commerce disruption and reduced customer traffic
The study highlights the significant impact of e-commerce on traditional retail. ALDO has
experienced a continuous decline in customer traffic at shopping malls in North America,
and this trend is likely to occur globally as online shopping becomes more popular. This
shift necessitates a stronger online presence and a reassessment of the reliance on physical
stores as the primary sales channel.
(b) Limitations of the franchise model in the era of e-commerce
ALDO's historic expansion through a franchise model has the advantages of conserving
capital and leveraging local market knowledge. However, this model also has limitations
in the e-commerce context:
 Lack of control: The franchise model gives ALDO less control over how e-
commerce is integrated and managed by franchise partners. This can lead to
inconsistencies in customer experience and challenges in implementing a unified
omnichannel strategy.
 Revenue sharing: Traditional franchise agreements may not be enough to address
revenue sharing from online sales, leading to conflicts or misalignment of interests
between ALDO and franchise partners.
2. Given the challenges ALDO is facing, adjusting its international growth
strategy is essential in the rapidly evolving e-commerce market
(a) Expanding franchises in key regions
Direct Ownership in Strategic Markets: one of the primary benefits of ALDO adopting a
hybrid model with direct ownership in strategic markets is gaining control over brand
representation. Currently, franchise partners often have significant autonomy in how they
represent the ALDO brand, which can lead to inconsistencies in customer experience. By
directly owning stores in key markets such as New York or London, ALDO can
implement its branding strategies without compromise, ensuring a uniform and cohesive
brand image that resonates with customers globally.
Enhanced Ecommerce integration is another crucial advantage of direct ownership.
Franchise partners might integrate e-commerce solutions differently, leading to a
fragmented customer experience. With direct ownership, ALDO can seamlessly integrate
its online and offline channels, providing a unified omnichannel strategy. This approach
ensures that services like Click-and-Collect are consistently offered across directly owned
stores, resulting in a smooth and cohesive shopping experience for customers, regardless
of how they choose to shop.
Moreover, owning stores in strategic markets provides ALDO with invaluable insights
into customer preferences and market trends. While franchise partners might not fully
align with ALDO’s strategic objectives, direct ownership allows the company to gather
real-time data and feedback from these key locations. This information can inform
marketing campaigns, product offerings, and overall business strategies, enabling ALDO
to be more responsive to market demands and tailor its approach to meet customer needs
effectively.
Improving Franchise Agreements: To address the limitations of the franchise model in the
e-commerce era, ALDO should focus on improving its franchise agreements by including
terms for e-commerce revenue sharing. Traditional franchise agreements often do not
account for online sales, leading to potential conflicts and misalignment of interests. By
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renegotiating these agreements to include e-commerce revenue sharing, ALDO ensures
that both the company and its franchise partners benefit from the growth of online sales.
This alignment of interests fosters a collaborative environment where franchise partners
are more motivated to support ALDO’s e-commerce initiatives.
Including e-commerce revenue sharing terms in franchise agreements also encourages
franchise partners to invest in digital infrastructure. Many franchise partners may lack the
motivation to invest in the necessary digital tools and technologies without a clear
financial incentive. By sharing the revenue from online sales, ALDO incentivizes
franchise partners to upgrade their systems and integrate digital solutions that support the
company’s omnichannel strategy. Enhanced digital infrastructure not only improves the
customer experience but also contributes to the overall efficiency and effectiveness of
franchise operations.
(b) Develop an Omnichannel strategy
With ALDO aiming to become an omnichannel retailer, seamlessly integrating its online
and offline channels is crucial. To achieve this, it is necessary to align digital and physical
operations, optimize inventory management, and provide a consistent customer
experience across all touchpoints.
A key part of ALDO's omnichannel strategy is integrating online and offline stores to
provide customers with a seamless shopping experience. Click-and-Collect is a service
that allows customers to purchase products online and pick them up at a store. This
service not only saves time and delivery costs but also enhances convenience for
customers as they can easily pick up products at the nearest store. Additionally, real-time
inventory checks are essential. Customers can check the inventory status of nearby stores
directly on ALDO's website or mobile app, helping them determine if the item they want
is available and potentially reducing the time spent shopping compared to visiting
physical stores. Moreover, Click-and-Collect minimizes the chance of customers visiting
stores and not finding the products they want due to out-of-stock or unavailable items.
Since implementing the system two years ago, ALDO has opened 440 new stores.
Employee productivity has increased 14 percent each year, and product lead times have
been shortened by two weeks. Focusing on continual improvement has yielded a supply
chain operation that leverages global resources across ALDO’s company-owned-and-
managed stores, fulfills the needs of individual retail stores, and extends the company’s
brand through a growing network of franchisees (Logistics I.T, 2010)

VII. Challenges of adopting an omnichannel strategy

1. Issues with Integrating Online and Offline Channels
Ensuring seamless integration between online and offline channels is crucial for a
successful omnichannel strategy "Consumers are still coming into our stores to shop, but
more and more, they’re coming in to return things, or to do research so they can order
online later. ... We need to look at our key performance indicators going forward.".
ALDO needs to synchronize inventory, customer data, and sales processes across
different platforms. This highlights the necessity of seamless integration between physical
and digital touchpoints to meet customer expectations.
Centralised Management System: ALDO can establish a centralized management
system to synchronize data and processes between franchise stores and online
platforms.Because most franchise stores do not yet have data synchronization, some
promotions may apply to one location but not to another.

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Standardizing Processes: Developing standard processes for franchise and online
operations, including inventory control, shipping, and customer support.ALDO must
connect its inventory management system to enable real-time access to both online and
physical stores, ensuring there are no inconsistencies. Order fulfillment methods must be
standardized so that online orders may be picked up in-store or delivered to residences.
Customers should receive consistent service across all channels, with staff educated and
equipped to access consumer data. Marketing and promotional initiatives must be
coordinated to preserve brand messaging and provide uniform offerings across all media.
Training and Technical Support: ALDO can provide training and technical support to
franchise partners to help them efficiently manage the e-commerce system.ALDO should
engage in extensive training programs to ensure that workers understand the omnichannel
strategy and their responsibilities within it. This involves training salespeople on modern
POS systems that combine online and offline data, teaching customer care reps how to
traverse multi channel platforms, and educating marketing teams on how to create
cohesive campaigns across channels. In addition, strong technical assistance is required to
maintain integrated CRM systems, unified inventory management software, and advanced
data analytics tools. Effective change management is essential for communicating
advantages, addressing concerns, and providing continuous support, resulting in a
seamless transition and a consistent, high-quality client experience.
2. Adapting to Changing Consumer Behavior
ALDO must adjust its strategy to meet the needs of tech-savvy customers who prefer
online shopping "The end consumer is completely channel agnostic. We need to look at
our key performance indicators going forward.". This includes leveraging data analytics
to better understand customer preferences and behaviors. This highlights ALDO's need to
adapt to consumer behavior that no longer distinguishes between shopping channels.
Focus on E-Commerce Development: ALDO needs to focus on developing e-commerce
channels to adapt to the increasing shopping demand of potential customer segments like
Gen Z
Data Synchronisation: Ensuring data synchronization between franchise stores and the
e-commerce system so that store staff can see customers' previous orders and provide
tailored advice or recommendations when they visit the store.
3. Managing Relationships with Franchise Partners
ALDO's franchise model complicates the implementation of a unified e-commerce
strategy because franchise partners have rights to all sales proceeds in their markets"As it
had expanded by franchising overseas, it meant that its franchisees had rights to all sales
proceeds in their markets. How should ALDO set up its global e-commerce model given
this legacy arrangement with its franchisees?". Balancing the interests of franchise
partners with a global omnichannel approach is a significant challenge. This highlights the
difficulty in aligning the e-commerce strategy with franchise operations.
Lack of Control: The franchise model gives ALDO less control over how e-commerce is
integrated and managed by franchise partners. This can lead to inconsistencies in the
customer experience and challenges in implementing a unified omnichannel strategy.
Revenue Sharing: Traditional franchise agreements may not adequately address revenue
sharing from online sales, leading to conflicts or misalignment of interests between
ALDO and franchise partners.
4. Investing in Technology and Infrastructure

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Significant investment is required to modernize ALDO's technology and infrastructure to
support the omnichannel strategy "In 2014 ALDO announced it would be spending CAD
363 million on modernizing its headquarters and strengthening the company’s digital
infrastructure. It also planned to hire 400 people to focus on e-commerce, social media,
and interactive marketing". This includes upgrading IT systems, digital marketing
capabilities, and logistics. This indicates the substantial financial and human resource
investment needed for technological upgrades.
Optimising Supply Chain: Developing logistics infrastructure – ensuring logistics
infrastructure is large enough to support fast and efficient shipping to overseas markets.
Leveraging direct relationships with factories (primarily in Asia) to reduce transportation
time and costs, thereby improving the supply chain for the e-commerce channel.
Enhancing E-Commerce Experience: ALDO needs to build a consistent global e-
commerce system. This helps optimize the shopping experience on online platforms.

VIII. The role of the physical store in an omnichannel strategy

1. Physical stores generate touchpoints for customers
Helps increase interaction and shopping experience, for example, after seeing ads in
magazines, advertisements or from some of their friends” A customer looking for shoes
would enter a mall. She would wander around the various shoe shops, try on a few pairs,
find one (or two) she liked, pay and take the merchandise and browse home”. These
touches make customers feel like they want to own the item from the moment they see it.
seeing it on social networks or from someone else until going to the store to try it on and
make the purchase
2. Create a Seamless Customer Experience
Physical stores help create a seamless shopping experience between online and offline
channels. For example, a customer may begin the shopping process online, then go to a
store to try on and purchase the product."Perhaps, the customer would see a pair of shoes
she liked on a blog she followed. She would then be led via an affiliated link to purchase
the item. She will put the item in her shopping cart, browse a few more options, but then
forget to complete the order. On her way back from work, she will remember her half-
completed purchase and decide to drop by the physical shop to try on the shoes.” Having
a seamless shopping experience from reviewing an item on online platforms to going to
the store to buy the product gives customers the feeling of understanding the product
better, and gaining an overview. about the product before they have direct contact with
the product.
3. The store serves customers as a showroom
Where customers learn about products and then complete online purchases. "Consumers
are still coming into our stores to shop, but more and more, they're coming in to return
things, or to do research so they can order online later.” (Frisk).In addition, the physical
store also offers Providing other supporting services such as refunding and exchanging
goods for customers. For example, a customer interested in ALDO products can come to
the store to experience the product directly and then decide. If you want to buy directly or
go home and order online to enjoy the brand's incentives, or for some customers who have
ordered online and are not satisfied with the product, such as the wrong size or design,

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then the store will do so. The physical store also serves as a place to return products to
customers.
4. Is a distribution station where clients may pick up things they
ordered/purchased online (click-and-collect)
Young customers tend to use applications and social networks to shop "Generation Z, the
next generation, which Call It Spring targeted, was social media savvy and often multi-
tasked across different devices simultaneously". Often, young customers will be the ones
who tend to use social networks for shopping, in addition, some young people buy
products suggested by influential people on social networks. They will buy on e-
commerce platforms and then go to the store and pick up the item they purchased. This
can help them identify the items they want to own and can shorten shopping time
compared to spending a lot of time going to physical stores to shop. Best of all, "click-
and-collect" will minimize customers coming to the store and not finding the products
they want because they are out of style or out of stock.
5. Brand Promotion and Real Experience
Physical stores help customers experience products directly, something that cannot be
done when shopping online and when stores place flagship stores in shopping centers.
"The consumer comes in and knows what they want. So we're focusing on product
development and innovation, and building it into our DNA and our culture. ". Although
the brand has focused on developing e-commerce channels, the shopping experience at
physical stores for customers who tend to buy traditional goods still needs to be
emphasized. Because some customers love the feeling of going to physical stores to
personally touch the products and enjoy the services that the store brings, something that
online shopping cannot provide.
6. Receive care and advice directly from staff
Staff at physical stores can support customers by providing detailed information and
product suggestions based on previous online shopping behavior to help customers "By
pulling out her nearly completed cart information, the sales staff would immediately be
able to her the right shoes and another pair she might be interested in.". When buying at a
physical store, customers will receive support from staff not only about the product, but
they will bring you a comfortable feeling for your shopping experience. Furthermore,
store staff interacting with customers can help better understand customer needs about the
brand's products.

IX. Conclusion
ALDO faces significant challenges due to the rise of e-commerce and declining mall
traffic, requiring a stronger online presence and reevaluation of physical store reliance.
The franchise model, while advantageous for capital and market knowledge, limits control
over brand representation and e-commerce integration, causing inconsistencies and
revenue-sharing conflicts. To overcome these issues, ALDO should adopt a hybrid model
with direct ownership in key markets for consistent branding and seamless e-commerce
integration. Updating franchise agreements to include e-commerce revenue sharing will
align interests and promote digital investment.Developing a robust omnichannel strategy
is essential. Integrating online and offline channels through services like Click-and-
Collect and real-time inventory checks improves customer experience. Centralized
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management, standardized processes, and franchise partner training are crucial for
consistency.Physical stores remain important for customer interaction, serving as
touchpoints, showrooms, and distribution points, offering direct customer care and
enhancing brand promotion. By implementing these strategies, ALDO can enhance
customer satisfaction, streamline operations, and stay competitive in the evolving retail
landscape.

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