“As I see it, the store will remain a ‘trusted pillar’ in the consumer’s mind, which sends the consumer to a product or a service. The store is a marketing tool through which you address customers. They come visit you, identify your services, but they might make the purchase online.”
Ostahie explains that if the retailer is competitive, customers will definitely buy the product from that retailer. If the retailer is not competitive in terms of the price, delivery or some other element, they will definitely look to buy elsewhere.
“We have both online and offline sales currently. We have in-store sales to customers who pay at the cash register. The same customer can come into the store, see the product and later order it online or order it straight from home and get it at home. Other types of sales will appear in the future, such as through Facebook.”
At present, less than 80% of Altex customers come to the store, choose from the store and pay in store. The rest go for other forms of sales, which will further diversify in the future.
Altex made sales of EUR208 million last year, up 7% on the previous year. For this year the company expects an over 20% growth.
“We prepared for Black Friday, but these things should not be done at the last minute. A serious company plans a full year ahead and we expect over 20% growth this year. The growth is continuous and solid.”
Dan Ostahie explains that shopping events such as Black Friday or the event organized by the company for its 20-year anniversary are necessary for a sales boost.
He says on Black Friday the products most in demand were definitely TVs, followed by laptops and tablets. The most expensive products sold were TVs above RON10,000 (EUR2,200)
On the company’s anniversary, November 14, sales were ten times higher than in a regular day. Compared with Black Friday, sales were much more diverse and people bought on a need basis. Ostahie explains that when customers were able to get a 20% discount on any product, they chose what they needed.
“But on Black Friday some customers ended up on websites where they were looking for a TV. But because it was sold out, they ended up buying a microwave oven.”
Built-in products replace free-standing ones
As for the electronics and home appliances market, the Altex founder says sales of white household appliances declined, while all other product categories went up. He explains though that market research targets white free-standing products sold by specialized retailers. Sales of built-in products, which are quite important according to Ostahie, are not monitored.
“This decline could seem obvious, but we must not interpret it as a decline. In fact we see an increase of up to 30% on built-in products. Romania is a replacement market and in this process built-in home appliances have replaced free-standing ones.”
He says all other segments are on the rise.
According to Ostahie, Altex has seen a steady growth since the beginning of the year. The businessman also expects growth in the fourth quarter of the year, considered the best for the company.
“We will be above this year’s growth and the overall market will record a small rise of 1%-2%.”
The electronics and home appliances market has suffered as a result of the consumption decline of the past few years. In 2009, the market was cut by almost half against the previous year from EUR2 billion.
As for Altex’s turnover, it fell from over EUR340 million in 2008 to EUR208 million last year.
The company did not open any new stores until two months ago. It only did relocations and closed down stores, where needed, in 2009.
Ostahie explains he decided to resume expansion after a growth in the volume of sales per store and per channel was noticed.
“Over the next two years we are talking about an intensive growth for the existing locations, improving services, as prices will decline and services will rise.”
(English version by Daniela Stoican)