Viktoria Lucenko, CEO, Auchan Retail Ukraine.
Auchan Retail is an international retailer established by Gerard Mulliez in France, 1961.
Nowadays, Auchan is represented in Europe, Asia, and Africa. It is the 11th global food distributor (according to Deloitte), as well as the 35th employer in the world (according to Fortune). Auchan combines all formats of food retail, totaling around 4000 sales points.
In Ukraine, the network has been operating since 2008.
Until 2017, Auchan was a hypermarket-discounter. There were 11 hypermarkets in five major cities of Ukraine.
This is primarily because the main format of the company were historically hypermarkets. However, we see how the market and consumer are changing. We understand that we also need to change and meet the new requirements of our customers. It is about becoming closer and more accessible to the customer. Therefore, one of the main tasks in our new strategy is to maintain leadership in hypermarkets, still, to work on proximity formats and e-commerce as well.
That is why a deep transformation of the network began in Ukraine in 2017: we doubled our enterprise, became multi-format, opened the first supermarkets and convenience stores, and most importantly, we began working on a new strategy and development of new functionality in e-commerce and digital services.
11 hypermarkets in 2017 and 26 stores of various formats now, active expansion in the market, as well as a doubling of the team (3500 employees — more than 6000 employees).
Of course, the phase of stabilization and refinement of all processes comes after such growth.
Our main current tasks are to expand the offer, to strengthen our brand, to introduce new marketing services that the discounter model did not previously provide. As for the offer, we are working on expanding the range of the second and third price thirds, because we want all our customers to have a choice regardless of income level. We used to focus on first price, and now we are working on the heart of the product range and premium goods while maintaining the price advantage in the economy segment. The range improvement and refresh is particularly relevant to our Private Labels. Our local and imported trademarks (products with a bird and exclusive brands by Auchan – Cosmia, Actuel, In Extenso, Qilive) is our strong point. They attract customers and provide them good value for money, unique offer, and also have considerable potential for development in the Ukrainian market.
As I mentioned, after an active year of expansion, we are in the phase of stabilizing and setting processes. In 2019, we focus on e-commerce and digital services. We are already working in this direction and have the website – shop.auchan.ua, the pickup service Click&Collect, the mobile application that integrates all digital options in one tool. Thus, although physically we are represented in nine cities of Ukraine, thanks to e-commerce, we deliver goods to all cities of the country and are happy that our brand is recognized and by more and more customers all around the country.
Auchan is present on the Ukrainian market for over 10 years. We are now a multi-format phygital retailer (physical + digital = the aim to follow customers anywhere and any time, no matter where they are and what shopping channel they prefer). In a competitive and rapidly changing environment, we want to keep our niche, without forgetting that the hypermarket is still the main and profitable format that does not go back in time (as business analysts have suggested a few years ago). Another issue is that the tasks of the hypermarket are changing, so in this case, our goal is to use our space wisely, adding new functions and mixing approaches while working with big stores.
Of course, another important goal for us is the constant work with the client experience: improving the client journey, creating wow-effects for our visitors. To achieve these goals, we launched a loyalty program in June. It is another tool allowing us to attract and encourage customers, to inform them about new products and services. Also, it gives us an opportunity to study their experience of visiting our stores, strengthen advantages, personalize further offers and have an individual approach to every client.
Thus, the last two years have become a turning point for Auchan in Ukraine: we have doubled the enterprise, have become multi-format, and have changed our strategy and business direction.
Summing up, I would like to say that for a successful retail business, it is necessary to understand the changes that this industry has been experiencing in recent years. Previously, the retail network was a distributor of goods, a mediator between the supplier and the consumer. Nowadays, a modern retailer is not only a distributor, but first of all a merchant who knows his consumer, who is constantly improving the customer experience, creates a wow-effect and additional value, thus making a difference on the market.
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