Results of the DIY market in 2018
First, let's talk about a key event for participants in the Russian DIY market. It was it that largely determined and announced with what results the largest players will be suitable by the end of 2018. This is a two-day industry business forum where representatives of retailers and manufacturers of building materials, repair products, household goods and a garden met. He passed in late May for the 12th time.
The content of the article
Industry Forum of Retailers
In 2018, DIY & Household Retail Moscow became a space for the exchange of views and forecasts of more than 40 speakers and 400 listeners, including commercial, general and executive directors of industry giants such as Your House, STD Petrovich, Stroitelny Dvor, “ 220 Volts ”, Hoff,“ Leroy Merlin, ”and authoritative analysts. Such an event has no analogues in our country.
Both the results achieved, and the upcoming trends, and emerging problems were discussed. Predictions were made on the development of certain sales channels and ways to maintain customer loyalty. In contrast to the static data presented below, representatives of DIY networks called the fundamental factor the level of service and consideration of customer wishes, and not pricing.
The market has reached pre-crisis level
INFOline news agency published the results of a study of the Russian DIY market over the past year. We studied retail trade in construction and repair goods, and furniture, as well as in the houshold segment. According to published results, the turnover increased to 1.5-2 trillion rubles (according to various estimates), which exceeds the results of 2017 by more than 7%.
This means that the market situation has stabilized and has reached the same level that was observed before the crisis of 2015-2016. This was contributed a lot by consumer pent-up demand and a selling boom in real estate, due to the availability of mortgage lending. The reduced refinancing rate allows obtaining loans for housing to a larger number of potential buyers both in the primary market and for finished apartments - about half of real estate in Russia are now purchased using borrowed funds.
And newcomers will need goods for repair, decoration and for the home in any case. The specifics of the purchases is that the owners of significant debts to the bank seek to minimize the cost of arranging the purchased housing, and the task of DIY retailers is to create affordable solutions.
Market leaders and losses
By the end of 2018, the positions in the top three market leaders remained unchanged. The first place continues to hold the Leroy Merlin network. Moreover, the retailer from France over the past year has strengthened its position by increasing its share from 19% to 21% compared to the previous one. Market researchers note that the K-rauts (which Leroy Merlin bought) and Castorama (which left the market without gaining leadership) left Russia, this factor played an important role.
The second and third places belong respectively to the domestic network of STD "Petrovich", firmly established in the top three only 2-3 years ago, and to the German retailer OBI, which has been in the leading position in Russia for quite some time. The recognition of STD “Petrovich” confirms, by the way, not only steadily growing in 2018, but also receiving the prestigious DIY & Household Awards, each year awarded by the best in this industry, simultaneously in several categories.
Experts about the past year and the future of the industry
According to Amer Carlos, editor of the online magazine for business about retail and commercial real estate and retail "MarketMedia", large chains slowed the pace of expansion and increase in coverage last year. But 2018 was marked by a focus on improving existing facilities. Immediately make a reservation that the forecasts for the current year, on the contrary, are full of announcements of the opening of outlets. For example, the leading Leroy Merlin will add another 22 new stores to its current 90 stores.
As INFOline CEO Ivan Fedyakov noted, in 2018, the DIY market developed in accordance with general trends in the retail and retail sector. Consumer behavior was characterized by an increase in spending compared with the previous three years. Although the comparison of prices and the impact of discounts and promotions on the purchase decision have come to the fore. The transition from spontaneous acquisitions to rationalization of consumption has spread to groups of different financial situation.
As the population was aware of the upcoming VAT increase and the subsequent increase in prices, the second half of last year was a period of restoration of steady demand for durable goods. Moreover, purchases were made both at the expense of own funds and borrowed - by registering consumer loans.
The combination of trading on the Internet and physical stores, called omnichannel, proved to be a successful strategy, therefore all major retailers sought to develop in this direction last year. Due to the active activity of the online channel of three hundred DIY networks and more than a hundred online stores with home goods, online sales in this segment grew by a third.
An important step towards the popularization of online shopping was the creation and promotion by retailers of their own mobile applications. They already sell about 16% of all goods for construction, decoration, household goods and furniture in Russia via the Internet.
In 2018, DIY retailers paid a lot of attention to sales in the b2b sector and made a bet on increasing the share of products of their own brands in the assortment.
