A strong organization with a new strategy. Interview with Arkadiusz Brzostowski, Sales and Development Director of the KAZAR Group
After months full of uncertainty and surprises, customers are returning to shopping centers. In what condition is Kazar Group?
The years 2020 and 2021 were years of major challenges facing the entire Retail market. The world hit by the coronavirus pandemic came to a standstill several times for weeks, restrictions imposed on citizens, while at the same time struggling to sustain turnover – it was a task that no one had practiced before. No company was prepared for such a scenario. From the perspective of the last, 3 seasons already, I can say with certainty that we are coming out of the crisis unscathed, stronger as an organization, stronger in the areas we have set our sights on, completely changing our management strategy. Our priority and mission were our teams, ensuring stability of work, maintaining commitment. We put the condition of our employees on the same level as our financial condition. Together we developed new processes adapted to the new reality. From the first day after the restrictions were eased, our stores were fully ready to welcome customers and serve them to the highest standards. Supply chains, though sometimes broken, were secured and today we offer a trend-rich collection that meets absolutely every need and taste, even the most demanding customers.
We have also reached an agreement with the malls, with whom we were in dispute in the early days of the pandemic. For many months the talks did not bring solutions, but only escalated the problems – today, we have reached a consensus with a significant part of the landlords. Although disagreements between us and the landlords continue to be a challenge, we have been able to agree with nearly half of the facilities on new terms that satisfy both sides. I am optimistic and believe that we will also come to common ground with the others and that they will adjust to the new reality in which we all find ourselves, whether we like it or not. On the other hand, we are determined not to continue operating in those galleries where the thread of agreement is missing and the contracts are coming to an end.
Many brands in recent times have focused on the development of the e-commerce channel. Has Kazar also found an opportunity in e-commerce?
Companies that want to thrive in today’s world must tie their future to e-commerce and the digitalization of stationary stores. In our case, the pandemic has only accelerated projects and decisions developing these two areas. In the last year we have completely rebuilt the Customer Acquisition area. In Traffic Acquisition, we now have very good results, well ahead of the competition. We are investing in new technologies and solutions, we are focusing on automation and multi-channel marketing. Adapting to the new shopping habits of consumers and standing out from the competition is the key.
E-commerce is a very important channel for us and we have meticulously planned investments in the development of the online platform, but we have not forgotten about the offline presence.
Kazar stationary stores will continue to play an important role in the transformation process, some of them will change location and some will expand their space. We are introducing a new concept of salons, developed by an Italian design studio on minimum areas of 350 m2. The new showrooms in the omnichannel model are further proof of how important the customer is to us and how dynamically we are changing for them. Direct contact with the product is very valuable for the buyer, it authenticates the brand and builds its value. Customer Experience primarily creates a “bond” with the brand. Good offline experiences influence longer contact with the brand, which is invaluable today, optimizing the cost of acquiring a customer, which in the era of growing e-commerce is one of the decisive factors of profitability. The dynamics of opening salons in the new concept depends on the progress of talks with shopping centers. Those with whom we conclude an agreement and set new conditions, in the first instance will be able to present Kazar to their customers in the new and technological version.
Kazar values global development, going beyond the borders of Poland. Which directions have already been taken and which are planned?
Since May 1, 2021, Kazar has successfully established itself in 11 European markets, presenting its WL21 offer on Zalando. Our expectations of being present on Europe’s largest online shopping platform were very high and we were not disappointed. Our products were very well received and already in the first days sales accounted for a high % of the total Company share. This reinforced our belief that today international success is built through presence on multiplatform shopping sites. We carefully monitor what sells, what preferences are in the different countries – this is a lesson for us and tips for the collection departments, which, as the success on Zalando shows, know how to win the hearts of customers throughout Europe. The next step in building international brand awareness will probably be stationary stores, but only in key locations. After the experience in several markets where we have been present in recent years, we are very cautious about developing an offline network. Now, in hindsight, I can see that brand awareness should be built first with an online presence, and only at a later stage should we carefully select locations in an offline expansion project. In recent months we withdrew from the Czech market, which during the pandemic became unprofitable, the support of the Czech government did not satisfy our current needs, and we could not afford to subsidize it with revenues from sales from Poland. Our presence on Zalando will compensate our Czech customers for the closed stores and they will probably be pleasantly surprised by such a wide range of products already in the first month of our presence on the platform.
The sun always comes out after the storm – what goals do you have for the coming months, years?
Above all, we will follow the plan and strategy developed during the pandemic. I believe it is right and guarantees the success of the company. Our goal for the coming years is to build brand awareness in the international market, and after the success on Zalando we are confident that it is possible. New investments in technological solutions will strongly accelerate our growth. Two years ago I already used the expression that a retail company is now a technology company. Together with the Head of Technology and E-commerce Department, we are implementing a number of new solutions and optimizing technological resources, which will enhance the good customer experience and streamline many processes. Continuing to consciously manage and optimize costs is a very high priority for us today. Limited access to materials and disrupted delivery processes have caused a large increase in prices, and looking for new solutions today and full mobilization affect the financial result, which allows us to implement further projects. The time of the last two years has confirmed my belief that a clearly defined strategy and mission tailored to the possibilities and the time, behind which stands the president and owner of the company Artur Kazienko, allows the efficient management of individual areas.
We are taking a deep breath after a period of many lockdowns and we are optimistic about the business future, but it is still a time when we need to remain vigilant. Quick reaction and readiness to introduce changes in processes saved us from the catastrophic effects of the pandemic, and I consider such readiness essential also in the following months and maybe even years – let us remember that the end of the pandemic has not yet been announced and no one can guarantee that there will not be another outbreak of the virus this autumn.