A main feature in BR magazine cover story of the December issue titled “Pandemic Shakes Up Local Retail Market,” Dragos Sirbu, CEO Flanco Retail, talked about the company’s omnichannel business model, consumer behaviour, and how 2021 will look for the Romanian retail sector. Because we wanted to follow up with him and expand on the topics presented in the cover story, BR’s editor-in-chief Anda Sebesi sat down once again with the Flanco CEO for an exclusive one-on-one interview.
By Anda Sebesi
How did the pandemic influence the retail sector in Romania and how was this reflected in sales?
The retail sector in Romania was severely affected in the spring, primarily in terms of store traffic. During the lockdown, most retailers were forced to close stores or limit customer access. There were a few weeks in which we all looked for solutions and in which the fact that our business model was already omnichannel was a great advantage. Customers quickly backed down and started shopping online, the order of their priorities also changed, but electronics and appliances were not removed from the shopping list, on the contrary.
You can see quite clearly how the pandemic was reflected and the information about the pandemic in the list of products that recorded the highest sales peaks during the year. From the moment they began to realize that traffic restrictions would be long lasting, customers began to rethink their needs and seek the help of technology more and more. The idea that the virus was airborne, combined with awareness of pollution in the large urban environment led to a peak sales of air purifiers. The emphasis on home cooking, including for families where meals were previously served more often in the city, increased sales of food processors, bread machines and coffee machines. As cleaning became more frequent, with people staying in the house all day, led to one of the great “sales champions” being the robot vacuum cleaner, a premium product, which until recently was considered exotic.
How has the consumer behaviour changed during this period?
During this period, we went from hesitation to a consumption behavior based on two criteria – what we need in the house, so that we can continue to carry out our personal and professional life as close as possible to “normal” and what we would like to have in our house, to compensate for the fact that… we can’t leave the premises anymore. The second category drove and increases in sales of large screen Smart TVs and high-performance audio systems – from the desire to have in their own home the comfort that couples or families had when they went to the movies, for example. Customers have increasingly focused on quality products, from famous brands, and to compensate for the lack of traveling abroad. Also, from the first category of criteria derived the fact that many customers bought IT&C products, both in spring and autumn, so that homework and online school are accessible to family members.
How difficult, or easy, was it to “keep” customers in the store, amid declining purchasing power and economic uncertainty generated by the coronavirus pandemic?
It was complicated, and required continuous adjustments. If we talk about the March-May period, we can say that it was difficult, the degree of uncertainty was very high, we did not know how much the lockdwon will cost us in total, economically. Under these conditions, it was not surprising that the purchasing decisions were made a little harder and more prudently. We saw this, too, a decade ago, in 2009. Over time, however, we have all become accustomed to the pandemic, and the idea of staying at home, and the new way of working and living. Work and shopping habits have returned to a normal level, even if the high share was, of course, online sales.
What are the categories of products that have recorded the highest sales?
The best-selling product categories were in the IT&C segment, followed by kitchen and cleaning appliances. Thus, 4K TVs with large diagonals, between 65″ – 75” had increases of over 65%, MacBook laptops recorded an increase of over 40%, the number of tablets sold doubled, PCs had increases of over 60 %, webcam sales increased 20 times compared to previous years, routers over 4, 5 times and smartwatches increased by over 70%.
Another category of products that was the star of this year was that of products that offered additional comfort and utility to homes. Thus, air purifiers recorded sales 6 times higher, while dehumidifiers had an increase of up to 4, 5 times higher. Robot vacuum cleaners, but also the vertical ones had increases of over 60%, and steam mops over 65%. Electric bread makers had increases of over 80%, blenders – over 55%, and electric grills of over 90%.
How do you see the evolution of the retail sector in Romania next year?
Next year things will not change much. The pandemic will still be on everyone’s lips, there will still be uncertainties, only that Romanians will have become more accustomed to these things. There will continue to be increases in the category of IT&C and in the category of quality products, because it is clear that Romanians currently prefer to spend money on good products, which will accompany them for a longer period of time, once they decide to make a investment.