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HOME REGIONS EMEA › Darty CEO outlines franchising plan

Darty CEO outlines franchising plan

by Stuart Wilson, Tuesday 11 February 2014

Regis Schultz, CEO at Darty, plans to boost the French retail giant’s consumer reach through a franchising model, targeting smaller population catchment areas. Schultz outlined the plan at DISTREE EMEA 2014, delivering a keynote speech as part of the event’s Retail-to-Business (R2B) conference programme, hosted by research house CONTEXT.

Schultz said: “Darty has 40% market share with stores mainly in urban catchment areas. Smaller catchment areas represent a growth opportunity and it is something we will look to develop through a franchising model.”

“With Darty franchise stores, the main Darty organisation will retain control of the service elements offered. In France there are 2000 small independent electrical retailers and 100 to 200 are closing each year. We are selecting the best ones to work with using a franchise model, giving them access to Darty’s multichannel capabilities,” he added.

Schultz’ speech reflected on the journey that Darty had undergone since he joined the company in May 2013 and also his plans to continue the retailer’s turnaround.

“The day I joined Darty we were receiving plenty of negative press coverage – a great starting point for driving change in the organisation,” he said. “We implemented the four Ds strategy: drive trading, digitalise Darty, develop our brand and deflate our cost base.”

“It was important to get back to realising it is a simple business. We buy products and we sell them. We have managed to increase our retail traffic in the last 9 months,” he added.

While the rise of the pure e-tail channel raised questions about the long-term future for physical stores, Schultz believes that the market is now beginning to realise that multichannel is becoming the preferred business model.

“Digital and online is changing retail now, just like big box retail did in the 1960s. You have to adapt, but it does not mean the store is dead,” he said. “Darty does more than €300m (US$410m) on the internet and we are gaining share, but pure play online retailers are losing share. Customers want the multichannel experience. We offer this and it is backed up with a one price policy.”

“Store visits are all about immediate gratification for the customer. We are defining what the store is for and using the web to drive traffic to stores,” explained Schultz.

Retail-to-Business (R2B)

The R2B Channel Summit taking place this week at DISTREE EMEA will address the potential of the traditional retail channel to effectively serve micro, small office home office (SOHO) and small business customers in Europe.

Schultz explained how Darty currently viewed its role in the R2B space and what could be done to further develop this channel.

“R2B is essentially SOHO customers for Darty and 90% of our business with these customers is done in store and 10% online,” he said. “There are issues we can look at in R2B such as follow-up on activity, stocking business SKUs, having specific service offerings and further enabling our sales approach [with R2B customers].”

“With R2B the keys to success are service, installation, training and warranty extensions. We can improve training of in-store teams and rethink the small business customer requirements in areas like invoicing. We can also offer the www.dartypro.com website which offers everything available on www.darty.com plus more products required by R2B customers,” he continued.

Multichannel benefits

For Schultz, running an effective multichannel strategy is vital to Darty’s long-term success in electrical and IT retail. Coupling this with an effective service offering also forms an integral part of the business plan.

“If you want to make money in electricals and IT it’s all about the service, or it is difficult to make money. Multichannel is the key for driving sales. Services are the key to making profits."

“Customers use the web to get information, but they also want the in-store experience. Yes, people go in store and buy online – showrooming. But let’s not forget that many more people go online and research products and then visit a store. The conversion rate for in-store customers is much better than the online conversion rate,” he explained.

He continued: “Vendors now realise they need a presence in physical retail stores. I think in the last 18 months they have really started to understand that. What you can explain to a consumer online is much more limited than what you can do in-store. You need a sales person that can explain products and technologies to consumers.”

Channel EMEA is an official media partner for DISTREE EMEA 2014.

DISTREE EMEA 2014

Top distributors, retailers and e-tailers from across the EMEA region are invited to attend DISTREE EMEA 2014, the premier event for the regional ICT and CE channel, from February 11-14th in Monaco.

DISTREE EMEA gathers hundreds of senior executives from EMEA’s Information Communications Technologies (ICT) & Consumer Electronics (CE) volume channel. DISTREE EMEA is a powerful business platform for vendors looking to manage, build or launch routes-to-market within EMEA. From A-brand vendors to start-ups, the DISTREE EMEA structure and reach offers business benefits and powerful return on investment.

During the course of the three-day event, delegates take part in thousands of pre-scheduled one-on-one meetings with hundreds of vendors. Each year, hundreds of new distribution agreements are struck across the region as a result of business relationships initiated at DISTREE EMEA.

DISTREE EMEA 2014 will also build on successful initiatives launched at last year’s sold out event including a regional awards ceremony. The ‘EMEA Channel Academy: 2014 Awards’ will include more than 20 categories for vendors and distributors from across the region.

www.distree-emea.com

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