“We are the benchmark”

It is the most important national DIY retail brand in Italy, not only in terms of size but also, and above all, because of the materials and innovations it offers. Proof of this innovative capacity comes not least from the creation of a second brand name – Dottorbrico – as a neighbourhood store. In an interview Kristos Basimas, executive director buying and sourcing, and Riccardo Baldi, who is responsible for communication, explain the state of the Italian market and the tasks that the company is coping with in order to face up to the crisis.The Italian market in 2012 and in the first few months of 2013: how did it develop and how is it continuing to develop?If we are talking about 2012, that was the first time the Italian market closed with a deficit. We are talking about minus two per cent. Certainly, when we look at other markets such as the Spanish one, which showed a deficit of nine per cent, ours was only a small decrease. But we shouldn’t forget that in other regions like Russia, for example, we see figures of plus twelve per cent. These are extremes, of course, and the reality lies in the middle with France at plus or minus zero. Nevertheless, that is the first deficit we have ever recorded and, above all, the new openings are included in the calculation.And Self?We are in the black in terms of performance but not like-for-like; we are in line with the market, which means that we must be careful. Since we have secured our share of the market we have done better than the market overall. That remains our first priority, especially because we are forecasting a negative course of events, for 2013 as well. January was not a good month, but then it has never been good: this time not even the sales functioned particularly well in spite of the attractive prices. It will be an extremely demanding year for Self, but we are optimistic because we want to grow and believe that we can do so.How?For example by reworking the product lines. It is incredible what results we achieve each time we go about giving a department a workover: the impact is immediate and positive. This is going to happen very often at Self in 2013. Our goal is to refresh all the various product categories in a continuous process. Last year, for instance, we concentrated the activity on the technical product categories: tools, electrical, sanitary, where we are observing positive developments, even though the market is weakening in general. What else? Above all else we are investing, and we are continuing to be the benchmark for the entire market that falls into the major category of do-it-yourself. And that despite the fact that we have been strongly driven by the enhanced feminisation of the sales outlets, where there has been an extension of the floorspace dedicated to the decorative product ranges.You have in fact opened up to professionalsPrecisely. We worked hard on the electrical and bathroom product categories in order to expand in the direction of a specialist trade store, which may not be our first target market, but still is a market, a possibility. We are not prepared to leave that market to anyone, so we have developed very strong ranges in the area of bathrooms and electrical products, which allow us to stock a broad and complete offer in terms of the assortment, and so appear credible in the eyes of our customers. In fact tradesmen are coming to Self in increasing numbers, in part due to the completion of a special catalogue and a carefully targeted mailing distribution list.How do you incorporate this concept in the shops, bearing in mind that they are of different sizes?In our bigger stores we work with racking, while in the smaller shops we work mainly with counters, though with the same spread of product range, so to speak. What changes is the quantity available. The aspect which concerns the reworking of the assortment is very important since it permits us to remain in the black even when the building sector falls back sharply. A contradiction here? Perhaps it means that many customers nowadays carry out the jobs themselves that were previously done for them. Another such sector is bathrooms. If we look at the trade side it is shrinking, but it is a growing market in the private area.Are we facing a classic case of “do-it-for-me”?I believe so. In earlier times it was the tradesman who bought the goods, but today it is the end consumer who has the tradesman install them. Thanks partly to the installation services that we and other DIY retailers have introduced over the years.Were there any areas showing a contrary tendency in 2012? Yes, in a negative respect. For the first time areas such as lighting and home automation recorded negative results. Lighting at Self closed in the black thanks to a reworking of the product assortment that was done twice and – in Moncalieri – involved a new collaboration with Philips. This includes the implementation of a shop-in-shop system which – over and above the radical alteration of the display criteria – is totally tailored to the powerful brand name, which customers are familiar with and esteem. What do you mean by “radical alteration”? On the lighting side, we reached the conclusion that it is not the number of articles that is decisive for the sales figures but the possibility of allowing the customer to understand clearly and unequivocally which lamp could be the one that he needs, or which material, etc. That means displaying fewer articles, but choosing those with special appeal, and in such a way as to find a balance between the breadth of the product range and its staging. The results are encouraging us to continue along this path, but without obstructing any other sort of collaboration with another supplier. We are always ready to talk to our suppliers in order to make optimum use of the floorspace and so achieve our goals in terms of sales, margins and stockturn.Shall we end by talking about the DIY multiples? The number of outlets is falling off…I have said it more than once and repeat it again: the fact that Castorama disappeared from this market nearly five years ago now was a disaster. At that time we had a state of equilibrium, whereas today there is one extremely strong company, then a German company which could do battle – though it hasn’t so far – precisely now when it has just gone through a process of reorganisation. Then there is us and a few others who are actually able to position themselves in the market and continue to develop further. The small companies are suffering, and some of them will disappear, some from the lack of a strategy, others by reason of a strategic decision of their management, still others as the result of economic difficulties. These days you have to be very vigilant because sales are one thing and profitability another. You must maintain your margins because all of us live off our margins and our terms and conditions.Now to your second brand, Dottorbrico. How is it getting on? Dottorbrico is positioned quite differently from the Self brand and is bringing us interesting results, so that we are continuing to develop it. It is a neighbourhood store with a catchment area of customers based within a distance of five minutes. It must have a range of products that is very effective, though not very differentiated in terms of level. The service offer is not complete, either: just the basic elements.