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Jo-Ann Digital Transformation Strategy
KEY TAKEAWAYS
- JoAnn has three key values: corporate giving, diversity & inclusion, and social responsibility.
- According to Chief Executive Wade Miquelon, "Despite unprecedented supply-chain disruptions and high levels of inflation, our product assortments and service standards remain very strong."
- In the first quarter of 2022, JoAnn faced a $35.1 million loss and a 13.1% decrease in revenue that was attributed to inflation and “challenged” supply chains.
INTRODUCTION
A company analysis for JoAnn, focusing on their digital transformation strategy that includes an overview of the company, an overview of their corporate value and missions, 2 quotes from the company’s executives relating to their digital strategy, and its existing marketing tech stack has been provided below. Additionally, we identified inflation and supply chain disruptions as corporate challenges faced by JoAnn.
COMPANY ANALYSIS
Company Overview
- Joann is considered one of the fastest-growing players in the arts and crafts industry. It currently has 855 stores across 49 states.
- It is " a convenient single source for all the supplies, guidance, and inspiration needed to achieve any project or passion."
- It is a category leader in sewing and fabric supplies. It also sells decor, Floral & wreaths, Kid's crafts, pumpkins, skeletons, and bones.
- JoAnn reported revenue amounting to $2.4 billion in 2022.
Corporate Mission and Vision
- Mission: "To inspire the creative spirit in each of us — our customers and ourselves."
- Vision: "Be the inspirational leader that helps everyone find their Happy Place through superior assortments, presentation, and service."
Corporate Values
- JoAnn has three key values: corporate giving, diversity & inclusion, and social responsibility.
- Corporate Giving
- JoAnn promises to "Continuously support and celebrate those who give back and inspire others to use their hands, hearts, and minds for the good of others."
- To achieve its corporate giving goals, JoAnn has partnered with the Children Miracle Network, St.Jude Children's Hospital, Susan G. Komen, Girl Scouts, Project Linus, and 4-H discount.
- Diversity and Inclusion
- JoAnn commits to "enriching communities; attracting and retaining diverse talent; identifying opportunities to enhance diversity among our product assortments, marketing and suppliers as well as cultivating a culture of inclusivity and belonging across all sectors of our company."
- Social Responsibility
- JoAnn commits to building a great working environment, improving product and operational sustainability, and giving back to the community. It recognizes that it has a "deep sense of stewardship for managing our resources and maximizing our positive social impact."
Recent and Announced Strategic Initiatives
- According to its 2021 full-year financial report released in March 2022, JoAnn has six strategic initiatives.
- Its first strategic initiative was to "design a new prototype and assortment optimization process for store locations." Other strategic initiatives include its plan to mitigate new U.S. tariffs on merchandise produced in China, innovate technology that cut down on technology costs that would be incurred by vendors, identify new lines of business, establish a foreign sourcing office, and evaluate supply chain capabilities.
- In line with the first strategic initiative, JoAnn began unveiling remodeled stores in fall 2021. The new stores are designed to innovative ways of shopping including more hands-on experiences and increased digital tools.
Digital Strategy Quotes
- On omnichannel shopping experiences, JoAnn's chief customer officer and senior vice president -Christopher DiTullio said "Customers expect now to be able to shop your website, shop your mobile app, place orders to pick up in store, pick up curbside. Having the flexibility to [offer] up those service options is how I believe you win in retail in the 2020s."
- Regarding targeting in-store customers with mobile offers, Ryan Davis, VP of marketing, said “We needed to implement an in-store mode and location-based marketing solution that would support our digital strategy to reach customers in-store ... Radar has been instrumental in supporting our team with the tools to produce winning marketing strategies through location-aware experiences and to increase revenue through in-app engagement and purchases.”
Marketing Tech Stack
- CQuotient: JoAnn relies on CQuotient for cross-channel retail personalization.
- Yottaa: JoAnn relies on Yottaa to optimize the user experience.
- Curalate: JoAnn relies on this product to enhance their understanding of the images that have engaged users.
- Quantum Metric: JoAnn relies on this product to manage the customer experience of users.
- TeaLeaf: JoAnn relies on this product to monitor user experiences, analyze user motivation, and gain insight into cart abandonment.
- Google Optimize: JoAnn relies on this product to tailor user's website experience to suit customer's taste.
- Branch: JoAnn relies on this product to engage in a "mobile deep linking system to increase engagement and retention."
- Google Analytics: JoAnn relies on this product to analyze user interactions with the website.
- Google Universal Analytics Usage Statistics: JoAnn relies on this product to gain insight into user's website interactions.
- Global Site Tag: JoAnn relies on this product to measure conversions from AdWords and DoubleClick.
- Bing Universal Event Tracking: JoAnn relies on this product to measure the impact of Bing Search campaigns.
- Google Conversion Linker: JoAnn relies on this product to detect ad click information from ad conversions.
- Facebook Signal: JoAnn relies on this product to evaluate trends, posts, and media from Facebook and Instagram.
- Pinterest Conversion Tracking: JoAnn relies on this product to track actions after viewing Pinterest Promoted Pin.
- Facebook Pixel: JoAnn relies on this product to evaluate conversions on Facebook.
- Facebook Conversion Tracking: JoAnn relies on this product to track advertisement clicks on Facebook.
- TikTok Conversion Tracking Pixel: JoAnn relies on this product to track TikTok advertising conversion
- Olapic: JoAnn relies on this product to tell brand story through curated user photos and videos.
- Demandware: JoAnn relies on this product to tailor user shopping experiences on digital channels.
- WebCollage: JoAnn relies on this product to publish product description and create product tours. Mobile
- Viewport Meta: JoAnn relies on this product to optimize content for mobile.
- IPhone / Mobile Compatible: JoAnn relies on this product to optimize content for iPhones.
- BounceX: JoAnn relies on this product to monetize their website's bounced visitors.
- Google Publisher Tag: JoAnn relies on this product to measure conversions of Google tags.
- Criteo OneTag: JoAnn relies on this product to collect user intentions data.
- Google Floodlight Counter: JoAnn relies on this product to count user visits after conversion.
- Facebook Custom Audiences: JoAnn relies on this product to reach people on Facebook.
- Link Share: JoAnn relies on this product to create an e-commerce referral service.
CORPORATE CHALLENGES
Inflation
- Challenge description :
- US inflation is at an extreme high. Currently, a majority of Americans identify that inflation is their top concern.
- US Inflation is at its highest in 40 years and has reached 9.1% year-on-year growth. Importantly, it has led to a drop in consumer confidence, which is at its lowest since late 1970.
- Why it is considered a challenge :
- Inflation has led to higher consumer prices edging out consumers from making purchases decisions and reducing retailer sales. According to JoAnn, inflationary pressures have curtailed the ability of consumers to spend discretionary income on creative products.
- Retailers are grappling with reduced sales margin because of rising costs. JoAnn notes that inflation is curtailing its ability to control costs.
- How it is impacting the company:
- JoAnn faces sharp freight inflation. Despite trying to moderate its "excess ocean freight costs", high inflation costs have contributed to its surprise Q1 2022 loss and low sales in the quarter.
Supply Chain Disruptions
- Challenge description :
- US retailers are facing port backlogs despite a decrease in shipping costs.
- In July, 153 ships were stuck in North America waters, which was a 66% increase from June 2022 port backlog. In the Eastern Seaboard, ships are facing long wait times in "New York and Elizabeth APM terminals in the Port of New York/New Jersey and the Garden City and Savannah terminals in the Port of Savannah" in comparison to short wait times in "Maher and Port Newark terminals in New York/New Jersey; the Norfolk International and Virginia International Gateway terminals in Norfolk, Virginia; the Packer Avenue terminal in Philadelphia; and the Wando Welch terminal in Charleston, South Carolina."
- In comparison to July, global shipping costs have reduced by 8% to $5,682/FEU in August 2022. The drop in shipping costs was higher in Asia – US West Coast whose freight costs fell by 18%to $5,405/FEU in comparison to Asia – US East Coast whose freight costs fell by 12% to $9,073/FEU.
- Why it is considered a challenge :
- Port backlogs has led to stress on inland supply chains that have worsened the supply chain challenges. It has resulted in retailers inventories declining while generating a lag in operating efficiency and profitability of retailers.
- How it is impacting the company: JoAnn's challenged supply chains have contributed to a loss and low sales in the first quarter of 2022. In response to the supply chain disruptions, JoAnn has increased its freight capacity and improved operational flexibility.
RESEARCH STRATEGY
To provide data on a company analysis for Jo-Ann focusing on their digital transformation strategy, we leveraged the most reputable sources available in the public domain. We primarily relied on articles on JoAnn's Investor Relations Website to collect the requested insights. In addition, we used news sources such as Marketwatch and US Chamber to provide the requested insights. We relied on quotes from other members of the executive team when we did not find quotes from the company’s CEO on the company's digital strategy. To obtain information on the firm's existing marketing tech stack, we relied on third party data from BuiltWith.