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EXECUTIVE INTERVIEW INSPIRINGINSPIRING THE THE BUSINESS BUSINESS WORLD WORLD As featured in FINANCIAL FORCE EFFECTEN-SPIEGEL’S The CEO Magazine MARLIS WEIDTMANN on combining journalism with investment TURBULENT TIMES For more info visit Anti-globalisation andINSPIRING world trade THE BUSINESS WORLD INSPIRING THE BUSINESS WORLD SUPER-MARKETING The junk food agenda theceomagazine.com HOT WHEELS The majestic Bentley GT Speed LUFTHANSA SYSTEMS STEFAN AUERBACH & OLIVIER KRÜGER THE BODY SHOP JEREMY SCHWARTZ CITYCON ISSN 2002-4401 hours in Paris MARCEL KOKKEEL Customer is still king KiK is all about cheaper prices, and CEO Patrick Zahn believes traditional in-store shopping can still have a healthy edge over ecommerce. IMAGES KIK he first thing Patrick Zahn did when he became CEO of KiK was really not much at all. After taking over in January 2016, the company’s former managing director of sales kept true to his innate philosophy: Don’t change things just for the sake of it. T “KiK was already a successful company, so for me it wasn’t like I had a list of 100 things to change,” Patrick explains. “I did my own personal check of small things I could immediately do to make the company better, but with more than 20 years of successful trading, KiK was doing a lot right. So the list wasn’t that big.” That’s not to say that Patrick isn’t thinking big. In fact, his big picture for the German discount store is huge. He plans to expand KiK’s retail presence in Name Patrick Zahn Europe to 5,000 stores, an increase of about 1,500. Then, of course, there’s Company KiK Position CEO that small matter of conquering the American market. Patrick wants 25 stores HQ Bönen, Germany in the Midwest of the US as a start, and it’s a job he concedes will be tough, Employees 24,000+ 85 EXECUTIVE INTERVIEW König — Customer is King — says it all, with the retail chain determined to keep prices low even in the face of online competition. There are 2,600 stores operating in Germany alone, ranking it among the top 10 largest suppliers to the country’s retail sector, and hundreds more are scattered throughout Austria, Slovenia, the Czech Republic, Hungary, Slovakia, Croatia, Poland and the Netherlands. Low-priced clothing is the company’s core business, accounting for 70 per cent of sales, with household wares, games, stationery and toys supplementing the range. The formula for maintaining low prices is as simple as the products on offer. Keep them basic and offer them all year round. If it’s high street fashion or sophisticated technology you’re after, KiK is not your store. Patrick cut his teeth in discount Full page advert “The US is a very different market; we will learn a lot and we will make retailing with Aldi and Plus stores, Matrix Sourcing (SS) a lot of mistakes.” – Patrick Zahn predominantly developing and expanding them into foreign markets. He believes in the principle that large competing against well-established no sense to say: This is our concept, retailers should enjoy around a decade discount juggernauts such as Walmart these are our products, take them or of success in their own countries before and Costco. While accepting that KiK’s leave them. The customer decides what dipping a toe into others, a sensible foray into the marketplace will probably they want to buy, so we will have to buy approach considering discount retailers be fraught with mistakes, Patrick from an American importer and offer pop up every day around the world remains undaunted. He’s ready to different things. somewhere, but often pop down just grapple with the challenges one step as quickly. When Patrick joined KiK in at a time. And the first step is getting “It’s going to be a lot different from 2008, roughly 10 per cent of its stores Christmas right. opening another store in Europe,” were operating overseas. He’s tripled Patrick adds. “For a start, there will that number, unabashedly fearless of “Americans have very different tastes at be different rules for Customs. Then competition — and, in fact, rather Christmas from Europe,” Patrick says. there is the time difference to negotiate. welcomes it. “I don’t know why, but they even have The US is a very different market; we different colours and we have to respect will learn a lot and we will make a lot “A monopoly is unhealthy, for both the that. So we would probably go with 70 of mistakes.” customer and the company,” Patrick per cent of our European selections, declares. “We are great at what we’re and the rest would be specific to KiK’s commitment to the customer the Americans. has been ingrained in the company’s “Exchange of trust allows organisations the space to culture since it was founded in 1994 focus on real business matters, leading to growth. MATRIX enjoys working with KiK because of its “Of course, we want to open up with in Düsseldorf by Stefan Heinig and adherence to strong principles and ethics, which MATRIX reciprocates, laying the foundation for a our business model, but the customer holding company Tengelmann Group. lasting partnership.” - Azfar Hasan, CEO, MATRIX is the most important factor. It makes The name, an acronym for Kunde ist and Triple Tree 86 EXECUTIVE INTERVIEW smeg.com.au “Ecommerce is not an easy business, especially if you have a low price point like ours.” – Patrick Zahn doing, and we have a great supply chain, so I am not afraid of our competitors. It is good that more are entering the market, and indeed leading some of the market. That’s normal. It just drives me to look at what they’re doing well and work out how we can improve. I am happy to have competitors because it makes us better.” Surprisingly, Patrick’s focus on improving KiK doesn’t stretch so much to online shopping. While KiK products have been available online for three Another strategy KiK implemented to attraction became not so much years, ecommerce accounts for only enhance its online service and make about price but all about the 2 per cent of the company’s turnover. the shopping experience easier was to shopping experience. allow its customers to return online “Of course, online shopping is purchases into the KiK stores. Patrick “Previously the only experience in a important, but not everything is about was convinced that with 3,400 stores KiK store was grabbing the product, sales; it’s about profit,” Patrick explains. dotted around Europe, all boasting going to the cashier, and paying a “We were swept up in the online more user-friendly opening hours than low price,” Patrick admits. “So we excitement and put together a strategy post offices, a new opportunity was decided to improve that experience with expectations that online selling there for the taking. and are remodelling and upgrading would account for 10 per cent of our 600 of our stores per year. It is a lot sales. But we learned that there are “So a customer comes to us after work of work, but really something very drawbacks, particularly for discount to return the jeans bought online, gets special, and turnover has already stores. Ecommerce is not an easy the refund back there in our store, increased by 12 per cent.” business, especially if you have a low ready to spend that money again,” price point like ours. You have to Patrick explains. “It’s ecommerce One KiK legacy that will remain change your supply chain, you need to mixed with traditional trading.” unchanged, however — and Patrick ship a certain amount before you can insists he will encourage — is to keep make money, then there are warehouse Speaking of tradition, Patrick stores local. He believes that having costs and return costs. recognises that KiK always relied on its a KiK store in the neighbourhood is low prices to lure consumers through a unique point of difference from YESTODAY “We didn’t want to lose money, so we its doors. There was no real shopping competitors the company enjoys. changed strategies. Unlike our experience, just the grab for a bargain. “Of course, it’s nice to have stores SMEG VICTORIA COLLECTION. THE SOPHISTICATION AND STYLE OF YESTERDAY, TODAY. competitors, we started charging a Décor, the layout of the stores, and in city centres, but I really want to delivery fee and started making money. service on the floor were largely fight to keep our stores in the local AVAILABLE IN PANNA (CREAM), BLACK OR WHITE ENAMEL AND STAINLESS STEEL Honestly, though, to me it doesn’t insignificant until recently when neighbourhood. That is something WITH MATCHING COOKTOPS AND RANGEHOODS matter if we have 5 per cent or 2 per KiK undertook a massive project to unique for KiK to be there, close to cent in sales; it is just important that renovate. Although he admits KiK our customer.” we don’t lose money, and of course be had the advantage two decades ago ready in case customers decide they by offering great prices, as more and It makes sense. Customer is king, only want to buy online.” more competition emerged the after all. 88 SMA16843.

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