How European DIY retailers reinvigorate after the pandemic

Interview Miguel de Almeida, Bricoalliance

How does one obtain a fairly objective picture of the operational transactions and challenges in the European Home Improvement landscape at one glance? An interview with the Managing Director of Bricoalliance offers an excellent opportunity to do so. Our European colleague Thierry Coeman, on behalf of The Hardware Journal, spoke with Miguel de Almeida and gained a thorough insight into the current situation from Iceland to Russia.

Miguel de Almeida, Managing Director of Bricoalliance.

Bricoalliance in a nutshell

Founded in 2005, Bricoalliance operates as a strategic alliance of 10 independent European retail organisations in 12 countries throughout almost 1,000 stores. The aim of Bricoalliance is to interact as a knowledge centre and a purchase / sourcing network platform. The Bricoalliance Headquarters are located in Antwerp, Belgium, and the combined global turnover of all the Bricoalliance members exceeds €2 billion.

What learning points did your organisation gain from the past 18 months?
“There are still countless lessons to be learned from the global pandemic in the months, and perhaps even years ahead. It seems rather premature for me to simply look back and draw a few conclusions at this stage”, explains Miguel de Almeida, Managing Director Bricoalliance. “In essence, our core business has remained unchanged: offering the most optimal product solution at the best price. However, the pandemic has sharpened the focus on the human aspect and more specifically on the emotional dimension with which we must now consider the relationship between customers, products, services and our team members”.

Of course, e-Commerce has been booming like never before and during our numerous virtual Teams meetings we shared a lot of experiences with each other. Each time we came to the same conclusion. All over Europe the physical shop offered untold opportunities to build a renewed relationship with the consumer. Consumers are eager to experience meaningful relationships in the physical store and experiences that add value to the product presentation.

Once we are successful in this, we are addressing the emotional connection between the consumer and the DNA of our stores; where the brand communication imprints deep in the brain. Customers quickly forget the cascading waterfall of words, but never the impact of emotions”, as Miguel

How would you describe the current situation in the ten countries?
“The results vary from region to region, not to say country to country. Generally speaking, the final figures vary between 5% and 35% growth.”

Miguel is eager to emphasise how essential the role of mutual co-operation has been between their members and the headquarters on the one hand, and their satellite office in the Pudong district of Shanghai, on the other. In
China they have a team of five buyers and auditors who continuously review and revise manufacturing plants/product lines and oversee the global quality control of product range assortments, services and shipping.

“Regarding our regions, our colleagues from the Baltics have been hit very hard by the fact that, compared to some other countries, their stores remained closed for an extremely long time during the early pandemic. The impact on the end result over the period 2019 – 2020 was substantial, though the online business managed to compensate in some regard for the loss in retail. Having said that, we were all pleasantly surprised by the resilience demonstrated by our Estonian and Lithuanian colleagues, a team spirit that has left a deep impression on us all.”

“Our Irish partner scored very high with a growth of (+30%) as did our Belgium colleagues (+ 30%). This Belgian result is an interesting case study. In contrast to other countries, retailers there opted to continue their product promotional strategy during the pandemic in order to maintain their market share. And apparently, consumers embraced this approach.

More specifically in Sweden and Norway, our partners maintained all of their investment provisions and continued their new store openings achieving organic growth (+20%). Our Siberian partner managed to keep its position as challenger with an increase of +10%, despite the fairly fierce
competition there.

The Spanish market recovered steadily at first; our partner ended up with +20% whilst the Italian partners managed to hold up with +10% against the crisis situation.

All in all, our members managed to realise more than reasonable results through the pandemic to date. And yes, just like everywhere else in the world, it remains a matter of guesswork to make the right future estimates and to build budgets. So “it’s gas with the brake on…” as our USA friends might say, and let’s agree on a forecast between 5% and 10%.”

How can the cooperation model contribute to the national targets?
“I welcome this question because the pandemic in particular has demonstrated the power of collaboration. Over the past fifteen months, Bricoalliance has justified its existence to each member: to deliver support in good and bad days. The co-operative model of our association reflects not only the DNA of Bricoalliance, but more importantly, the intrinsic added value for each member.

The transparency of our co-operative partnership supports each member financially as the incomes are redistributed in the spirit of this collaborative model.

At the time of this interview, we are now facing a new setback and challenge: the exponential growth of the cost of raw materials and, by extension, the logistical problems.

Once again, our Chinese hub confirms its essential role as a logistics partner, but also as a partner in the area of quality control.

Finally, Miguel wants to specifically share the following message with the readers of The Hardware Journal: “The pandemic has shown above all else that a business model based on co-operation transcends the solitary existence.

Sharing knowledge, exchanging experiences, learning from cultural differences, supporting each other especially during a crisis, and last but not least, providing an assurance that the term “solidarity” really works from Iceland to Italy, from Ireland to Siberia” concludes Miguel.