Monday, July 13, 2009

She Tickled His Armpits

Revolution in Russian retail

by Irina Bolotova, retail strategy consulting Jos de Vries the Retail Company in Russia.

Let me tell you a story about the Russian retail trade: one of the fastest growing markets and more interesting today. Do you know something about the Soviet retail? I do, I remember it well. Can not remember when there was absolutely nothing in the stores! No bread, no milk, no meat ... People had to queue for hours to buy food. Perhaps it was lucky that day and had enough food for the family. Or maybe not.

At that time, be the seller of a shop or a store manager was a very coveted position: entailed free access to many products. People were willing to pay more or bribe you to provide certain products and clothing they needed. This situation was caused by the deterioration of production and distribution policy, triggering a total crisis of the Soviet system. The Soviet Union foundered badly in 1991. Nobody could imagine how it would develop in the future.

Roaring 90
The opening of the borders of Russia was followed by a flood of products. Most people could try products from abroad for the first time in their lives. Despite high inflation and very limited resources of the majority, everyone wanted to buy and test new products from abroad. Coca-Cola, Snickers, gum - it was all so new and exciting for us!

Everyone trying to be an entrepreneur. Those with money bought clothing in China and Turkey and quickly sold on the market. Nobody cared about quality, only had a budget price. It was an era of quick money from high risk, which appeared most modern retail distribution companies. At this time we call the "Roaring 90." Until he opened the first supermarket in 1996, most people continued to buy everything in the street markets or small kiosks. There was no special retail technologies and interesting designs. Only the price and the imported variety.

Today, Russia remains one of the most unique retail markets and further development. In 2006, the official sales volume amounted to 150,000 million dollars. Unofficial statistics put the figure closer to 240,000 million. The modern distribution formats have a market share of only 15% of the total retail market, which shows that competition between modern facilities is still very intense. It also suggests that retail is all consolidated in Russia. In fact, in Russian cities there are chain stores, which is explained by the large gap between urban centers, subjecting a heavy burden on the distribution systems. However, the Russian retailing is developing rapidly, and traders are studying and learning to create stores that meet European standards. The quality of products and services is gaining increasing importance. The stores need to have an efficient design and a strong corporate identity, and offers added value compared with rivals. It is planned that the Russian retail market will be the fifth largest market for high development of the world in 2011. Hypermarket formats are also known to play a decisive role, with increased facilities of 40% annually.

More information can be found in www.josdevries-design.blogspot.com or sending an email to m.vanderkooij @ josdevries.eu

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