World Retail Voice Blog Post
Interview with Herman Tinga, Commercial Director at Lenta
What is the most interesting development that you are seeing with regards to consumer behaviour and customer engagement at the moment?
"Regardless of the market dynamics, shoppers have become more used to choice and low prices. Not only this, they have become more discerning, which means quality is also important. You can only bring all of this together profitably if you have strong logistics and are compiling data on customer spending habits so that you can stick to a tight set of SKUs, minimise wastage and bring the right goods in at scale. With the help of customer insight specialist emnos, we have developed a world class Big Data project which enables us to do just this. We gather data from our very successful loyalty card, which has 90% penetration and we tailor our assortment, prices and offers accordingly."
"By studying in great detail what our customers buy, we are able to divide customers into 9 distinct lifestyle segments and offer customers precisely what they want at the price they want. We also increase their spending with us by engaging with customers and sending customers individualised weekly vouchers based on what they are buying – the 18% redemption rate on the vouchers is on par with best in class retailers worldwide."
"So success in retail at the moment is all about gathering data and interacting with customers – the key developments in the market centre on this."
What is the most interesting opportunity in the Russian retail market at the moment?
"The entire Russian marketplace is interesting at the moment, let alone any specific trends or opportunities. When looking at the Russian market, you have to understand that it is completely different to any other marketplace in the World. Russia has 9 timezones, enormous variances in temperatures, unique local tastes and a dozen cities the size of, for instance, Liverpool or Lyon, that don’t even have a single hypermarket. So the challenges are great, but the rewards can be substantial."
"Russia is already the second largest retail market in Europe and is on track to becoming the largest in Europe by 2017. There is significant underpenetration of modern food retail and currently, the top 5 food retailers in Russia account for only 20% of the entire food market in Russia. So the growth opportunity is vast and Lenta has both the logistical infrastructure and the differentiated offering to capture this."
Which future trends are you keeping an eye on?
"We are looking at developing big data of course and an on-line offering is something that may be worth developing for Lenta one day. For now though, we are looking to double our retail space in 3 years as well as further develop our interaction with our customers. So, we certainly have plenty to do!"
Why is the 2014 Congress so important?
"Firstly, the World Retail Congress is of course one of, if not the most important event in our industry. This will be the first time we participate as a listed company, we are undergoing a period of substantial growth and so we participate with a much larger profile than before and it is important we are seen here. The congress itself also has a magnificent set of speakers and being present will certainly help us keep our finger on the pulse with all the latest developments in the industry and discuss new approaches that may, or may not be working."