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March 23, 2018 www.intellinews.com I Page 5
order it online and it will be delivered. It leads to much better stock management and makes it easier to sell,” says Tynkovan.
Price is important, and with the strength of M.Video’s brand in theory the company can command a premium. However, Tynkovan insists on offering the lowest prices and backs the promise with a price guarantee: even if the shopper buys a TV on Friday and M.Video cuts the cost of the same set by 20% the following Monday, M.Video will refund the difference.
“A tiny number of people actually make use
of this service, but still it gives the consumer confidence in our stores and that is important,” says Tynkovan.
By 2005, Tynkovan says he had learned all he could from his international peers. He believes that now M.Video has overtaken them and is the leading and most innovative retail business in Europe.
“We are ahead and more advanced than the other companies in our sector in the rest of Europe. We are still exchanging knowledge with our peers but we have been able to be more innovative,” says Tynkovan. “For example, we never allowed there to be a difference between online and offline prices, while other companies took some time to integrate these two.”
It's the leapfrog effect at work, where Russia has jumped over several stages of development and gone directly to state-of-the-art solutions. Busi- ness leaders like Tynkovan have embraced new technologies from the very start, and M.Video has been especially progressive. For example, when Russky Standart started adding significantly to the company’s bottom line, Tynkovan organised a credit broker desk in all his stores, which cooper- ates with 11 banks, so customers had to fill in only one form and then could choose from the best deal on offer.
The next stage is to create “one retail” which will be the full digitisation of the sales experience, says Tynkovan. When a customer enters the store
they will be “checked in” by the sales staff us- ing smart phones. In this way all their decisions and preferences can be recorded and followed up on. It will allow the store to identify its “hot” and “cold” areas and products that will improve the layout and stock management. Customers can buy a product simply “kissing” their phone with that of a member of staff, transferring payment and delivery details from one device to the other as well as connecting to inventory and credit con- trol at the company.
“All retail is headed to the mobile phone,” says Tynkovan.
Giga-merger
Russia remains a volatile place to run a company and after the 2008 crisis struck, the economy took a huge hit as the virtuous circle stopped turning. Things then got worse for retailers as economic growth sank to zero in 2013 despite oil prices remaining over $100 per barrel as the petro- driven growth model was exhausted and Russia ran up against its structural limitations. Incomes began to fall and real disposable incomes have been negative for almost three years now.
However, as the market leader M.Video was insulated from the worst of the slowdown.
“When the market starts to slow then the weak companies start to disappear. We had the leading model and lots of online projects were folding
so we didn't feel the slowdown that much. Our market share was growing dramatically and we were still profitable,” says Tynkovan.
The same story has repeated itself in many sec- tors connected to the consumer, which have seen a rapid consolidation as the leading companies in- creased their market share and maintained sales volumes, even if margins have been squeezed.
Now the game is going to change again with the merger, as the combined company Eldorado will be unassailably large.
As M.Video is already a publicly traded