DIY and Household Congress Presentation

DIY – HOMING CHALLENGES
CREATING FIRST CHOICE RETAILER BRANDS

Clive Woodger
SCG London

Presentation synopsis of enclosed talk given by Clive Woodger, Managing Director and Owner of SCG
London at the fifth international DIY and Household Congress 2011, Russia’s leading forum for the DIY
industry, produced in association with EDRA, the European DIY-Retail Association.

DIY – Homing Challenges – Creating First Choice Retailer Brands

The presentation provides an overview of consumer mindset changes, the challenge of sector convergence and growth of
multi-channel retail. These factors highlight the need for a clearly articulated brand strategy to differentiate offers in an
increasingly competitive market place. Examples are given from the UK, Iceland and Russia to illustrate different
approaches to brand profile development.

The UK market post recession has overcapacity and illustrates the vital requirement to clearly differentiate your offer from
the competition. Multi-channel development gives the consumer immediate wide choice and ability to compare opinions
and prices. The need for an inspiring brand and commercially stable strategy was emphasised and a checklist of
components and issues to be addressed was presented.

Defining why your image and reputation would be positively differentiated from competitors through your vision, values and
ethos and the tangible and emotional attributes of your company and offer is difficult. Does your vision inspire staff,
management and investors? Can you ensure every potential interaction with your operation will effectively contribute to a
positive perception of the organisation as a retailer brand you can trust and a first choice solutions provider?

The function and scope of a typical Brand Strategy should inspire, direct and engage vested interests and stakeholders,
manage external audiences and reflect latest ethical and sustainability practices and policies. This is particularly tough in a
converging market where food and fashion retailers are moving into home offers, specialist are widening their ranges and
department together with furniture stores are developing their home and lifestyle offers. Issues of credibility and reputation
then become key issues. “What are you known for?” is a classic differentiation test.

Presentation synopsis continued …

Surprisingly, despite these pressures, DIY chains still needing to address basic issues which have not changed in the last
ten years – appealing to women, selling ‘soft‘ home décor convincingly as well as ‘hard’ diy, providing inspiration and
information and making stores easy to navigate and a pleasure to visit. Ten years ago SCG London spent a year working
with B&Q developing a new smaller flexible convenience format which would be rolled out as a conversion of the
superstores which were starting to be cannibalised by the large format ‘warehouses’. It was specifically targeted at women
as research had shown B&Q failing significantly to address this key group. Whilst successfully prototyped, management
changes meant the project was discontinued. This was ironic as its layout concept, careful zoning, less intimidating
merchandising and distinctive point of sale strategy was ahead of its time and highly relevant today.

Husasmidjan, Iceland’s largest DIY chain realised they needed a sophisticated semi-department store approach to their
décor, living, kitchen and bathroom offer but combined with a traditional DIY offer for tradesmen. With careful zoning and
merchandising and graphic treatments we were able to create a contemporary flexible environment and brand personality to
meet these diverse audiences aspirations.

Two contrasting Russian companies are then reviewed to show how a city décor specialist Starik Hottabych and a massive
hypermarket operation Tvoi Dom could achieve more relevant and effective brand experience. Starik is an example of
creating a new contemporary offer but clearly based on the well know heritage brand equity. This now attracts a younger
profile customer as intended but retained its existing customer base. Tvoi Dom’s biggest issue is breaking down a massive
offer into easily navigated zones and clear point of sale with a new brand identity, graphic communication and marketing
strategy.

The concluding viewpoint of the presentation is the opportunity of Russian DIY operations to use their local knowledge of
customer needs and different more flexible format operations and opportunities to create concepts which are highly relevant
to the local customer aspirations. The international operations currently are not so flexible in their offer and formats.
Russian companies should therefore leverage their local credentials and advantages. The opportunity is to achieve positive
community interaction and develop a distinctive brand profile and real differentiation, offering relevant accessible products
and services which can be best tuned to meet local market needs. Maybe its time for less CRM and a bit more RRCC –
Real Russian Customer Centricity!


  Consumers – Changing mindsets
  Market place - Convergence/ Multichannel
  Brand Strategy
  Case studies - UK, Russia, Iceland

We are:

  International Strategic branding and design
consultancy

  13 years … 60+ Russian clients

  We work in the retail, financial, real estate
sectors by creating

ОСНОВНЫЕ ЭЛЕМЕНТЫ
BASIC ELEMENTS
SCG LONDON SERVICES AND EXPERIENCE | REAL ESTATE BRANDING | PAGE 6 2.01

Логотип «Энтузиаста»
The Enthusiast identity

РУССКИЙ Логотип может воспроизводиться в одном
КИЙ
варианте двуцветной комбинации.
Первичный вариант – Желтый на фоне Темно
Серого цвета древесного угля или вторичный
вариант Темно Серый на фоне Желтого.

Такое решение придает логотипу гибкость
применения в разнообразных форматах и
материалах. Следующие страницы предлагают
руководство по расположению деталей,
размерам и цвету для основных элементов,
которым следует строго придерживаться.

ПРИМЕЧАНИЕ: Запрещается использование
других конфигураций. Для вопросов
Первичный воспроизводства рекомендуется
вариант логотипа обращаться к мастер копии.

Primary colourway ENGLISH
ISH The Enthusiast identity
The identity may appear in one of two colour
configurations. The primary colourway of Yellow
out of Charcoal Grey or, the secondary colourway
of Charcoal Grey out of Yellow.

This gives the identity a flexibility to operate over a
range of different applications and materials. The
following pages provide layout, dimensional and
colour use guidelines for the basic elements and
should be rigorously adhered to.

NOTE: No other configuration is permitted
for application. Refer to master artwork for
all reproduction purposes.

Вторичный
вариант логотипа
Secondary colourway

Consumers - Changing mindsets

  New realities
  More for less
  Cautious…want to be in control
  Purchases are more considered

The new attitude is “what do I really need?” and “what can I do
without?” rather than “what do I want?” and “what can I have
right now?”

Consumers - Changing mindsets

  Simplicity is back. Complexity is out.
  People are fed up with things that they can’t
understand.
  Clarity and transparency
  Speed and convenience
  Local accessibility, local provenance
  Old fashioned values as well as “back to basics”.

Consumers - Changing behaviour
UK perspective post crisis

Back to Basics
Home as Hub
  From
DIY
to
‘Do
it
for
me’
  Stay at home holidays
back
to
DIY
  Focus on cosmetic
  Small
scale
maintenance
‘facelift’ and comfort
jobs
increasingly
  Growth of gardening
undertaken
by
DIYers
  Garden as important
  Women
more
ac=ve
than
social venue
ever
before
  Grow your own

“negative equity?” …

MARKETPLACE
CONVERGENCE
MULTICHANNEL

Marketplace - Convergence, UK perspective

  Blurring of sectors and industries
  Bookshops selling coffee, coffee shops selling music,
supermarkets selling loans, Ralph Lauren selling white
paint, water companies selling gas
  Just how far can you stretch a brand these days
before it snaps?

Marketplace - Convergence, UK perspective

Marketplace – Convergence
…home … lifestyle ... fashion … DIY

Marketplace - Convergence

  Grocers predicted to increase share to 5.3% from 4.3%
over the next 5 years
  Long term threat to specialists – geographic spread, price
promotions
  Specialists becoming generalists – range diversification
  Going soft/inspirational … going hard/functional

Marketplace - Saturation, UK perspective

  Merchants – stagnation
  DIY/Household - overcapacity, failures (Focus May 2011),
predicted contraction (UK)
  Less is more - inventory reduction, cost containment,
supply chain optimization
  Making infrastructure work harder

Marketplace - Saturation, UK perspective

  Specialists reluctant to expand costly space
  Investment in driving growth and expanding customer
base through online channels
  Increase sales opportunities without opening new
stores

Marketplace - Multichannel development

  Delivering cross channel shopping experiences
  Focus on customers’ specific preferences and goals
  E-commerce, call centres, reserve & collect
  Project selling, product ratings and reviews
  Inspiration and education - sharing
  Extension into social media arena
  Online communities of likeminded consumer types
  Blogs, tweets, interactive Q&A sessions

Marketplace
Multi Channel Development

BRAND STRATEGY
FIRST CHOICE RETAILER BRANDS
DIFFERENTIATION CHALLENGE

Brand Strategy: Competitive Differentiation
Credibility and Relevance
Branding
Diﬀeren=ated
image
and
reputa=on
development

Brand
Strategy
Deﬁne
organisa=on
 
Vision

management
 
Values

principles
and
aims
 
Ethos

 
AGributes

 
Behaviour

Brand
PlaKorms
Create
a
posi=ve
 
Place

consistent
brand
 
Physical

experience

 
Digital
Communica=on

 
People

 
Processes
&
Products

Brand Strategy
Vision … Values … Attributes
Create
commercially
aGrac=ve
and
inspira=onal
vision
and
aims.

Define
posi=ve
differen=ated
values
and
aGributes
–
team
ethos.

Achieve
effec=ve
engagement
of
management,
employees,
tenants,

users,
stakeholders
…

Understand
and
manage
external
audiences
and
expecta=ons
–

communi=es
of
interest,
poli=cians,
the
media,
vested
interests
…

Integrate
latest
ethical,
environmental
and
sustainability
prac=ces
and

policies.

CASE STUDIES
UK, ICELAND, RUSSIA

Case Studies - The DIY Store, UK
The Diy Store Case study

Ahead of its time ?

TVOI DOM | CASE STUDY
ZENIT ST.PETERSBURG | CASE STUDY | PAGE 17

Case Studies - Husasmidjan, Iceland
Soft, hard, relevant
  Limited market but sophisticated consumers - affluent, demand high quality,
latest design
  Husasmidjan - needed to create a softer, women friendly, décor and home
centre offer, building on their established DIY trade and retail offer.
  New values, new style, new store experience …

Local market leader
Focus on home décor
Female friendly
Lifestyle product offer
Complete solutions
Graphic led approach
Cost effective and flexible


soft
design
ideas
solutions
value
human
inspirational

Case Studies - Russia

Specialist ....... Generalist
Starik Hottabych Tvoi Dom
  city décor store   2 stores in Moscow
  1500 - 3000 sq. m offer - 66 000 sq m
  Market Leader - 112 000 sq m (including
  20 Stores Moscow furniture and garden centre
  22 Stores Regions built in 2009)
  largest chain specialising in   First regional project in
home décor in Russia Voronezh
  express design service,   24 hour operation
delivery…

Case Studies - Tvoi Dom, Russia

CREATING A DIFFERENCE – CATEGORY GIANT

•  Everything for the home and living - DIY, décor, furnishings,
garden, electricals, cars, luxury goods, fashion, supermarket,
food court …
•  Category killer for lighting, bathrooms, furniture …
•  A contemporary bazaar of own product and concessions
•  An ultimate range policy

The challenge – creating a personality

Where do I find …?


Tvoi Dom Tvoi Dom is a mega shopping retail centre operation DIY, fashion, furniture, luxury gifts, cars and garden o er
Brand identity and store design in Moscow with a massive o er for ‘home’ and ‘living’. are combined with leisure and food court facilities.
They have regional expansion plans based on their The aim was to retain the energy and excitement of the
two existing centres in Moscow. centres and achieve a contemporary personality and
ambience. A key task was to provide a robust graphic
SCG London have developed a new brand identity to
communication system which can e ectively zone the
create a memorable and distinctive umbrella ownership
o er and provide easy orientation for the customer.
for the diverse range of individual tenant concessions
and Tvoi Dom’s own retail o ers. This modern-day Design guidelines for marketing, future centre formats,
bazaar format creates a powerful retail value atmosphere architecture, layout and circulation models, signage and
and shopping destination with centres of 50,000 m2 point of sale were developed to provide a corporate
trading area. Category ‘killer’ departments for decor, template for expansion.

Furniture and Garden Centre Extension

Case Studies - Starik Hottabych, Russia
Creating a difference – Décor Specialist

  Well known city brand
  A developed brand culture and
known for personal services
  Aim to be local, friendly décor
destination - latest products in
stock
  In transition - developing their
brand profile, customer
communication and store formats

Starik Hottabych - Retail, Brand Identity and store concept Case study

STARIK HOTTABYCH | | CASE STUDY
ZENIT ST.PETERSBURG CASE STUDY | PAGE 6


Starik Hottabych - Retail, Brand Identity and store concept Case study

Russian market future challenge

 Foreign investment dominated by big box development
 Format cloning
 Fight for anchors – limited availability
 Opportunity to develop smaller, more flexible and local
format types
 Urban concept stores
 Break the category management rules!
 Respond to local needs – broad and shallow product
assortment?
 Community stores – hard and soft goods
 Local sourcing
 Cost effective in relation to the regional opportunity and size of
local catchment area

Future challenge - Opportunity

“The more globalisation takes hold, the more powerful local
players can become…. The stronger the forces of globalisation,
the more important provenance and personalisation become.”

Russian DIY retailer opportunity is to develop:
•  Differentiated brand profile and culture
•  Leverage local reputation and community interaction
•  Relevant accessible offers

DIY and Household Congress Presentation

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