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TU DISPOSITIVO ES MUY PEQUEÑO,
PRUEBA CON UNO MÁS GRANDE

4.2Closer than ever

DIA’s business model is based on customer proximity, meaning physical proximity and a long-lasting relationship. The latter fosters familiarity with customer needs so that the organisation’s establishments can be tailored to their interests and preferences.

Geographic proximity

Cita

DIA wants to be right where its customers are. Year upon year it has been expanding its store network in various markets. This effort is primarily the result of the rollout of new formats and product range diversification. At year-end 2015, the group had 7,718 establishments worldwide, 412 more than the year before, 5,519 (71.5% of the total) of which were neighbourhood supermarkets (DIA Market, La Plaza de DIA, Minipreço Market, El Árbol, CadaDIA and Mais Perto).

Clarel–the store network specialised in household and personal care (HPC) products, concentrated in urban areas in Spain and Portugal–accounted for 1,195 establishments, having completed the restructuring and refurbishment of the old Schlecker stores.

DIA also had 1,004 larger-format supermarkets located on city outskirts equipped with parking facilities to cater to bigger, less frequent shops.

The significant network growth sustained in 2015 was driven by 267 new store openings plus the acquisition of 145 stores from Eroski, a transaction approved by Spain’s anti-trust authority, the CNMC, in April 2015.

Growth by market

DIA’s approach to its home market’s growth paradigm is acquisition-led: against this backdrop, it acquired 145 stores from Eroski in 2015, the El Árbol supermarket chain in 2014 and Germany HPC chain Schlecker’s store network in Spain and Portugal in 2013.

Aside from these acquisitions, the company invested €366.3 million in new store openings and existing store refurbishment work, up 6.2% from 2014.

Thanks to this policy of sustained investment in Spain and Portugal, where it earmarked €185 million to store openings and maintenance, coupled with the accretive transactions closed in recent years, at year-end 2015, DIA had over 5,562 stores in the Iberian Peninsula.

In Spain, its main and home market, DIA is the leading retailer by number of establishments, with a market share of 10.3%. Moreover, it has emerged as the leading player spearheading the consolidation of a still very fragmented retail sector.

In Spain, the DIA Group has emerged as the leading player spearheading retail sector consolidation

In parallel, DIA continued with its growth strategy for positioning itself as the benchmark player in the neighbourhood shopping segment in emerging markets, despite the challenging economic environment. This is evident in its capital expenditure figures: DIA earmarked €181.3 million to store openings and refurbishment in Argentina, Brazil and China in 2015 (up 25.5% from 2014), closing the year with 2,156 establishments.

Brazil hit a new store opening record last year, inaugurating 130 new stores in total and driving growth of 31 basis points in the company’s market share to 7.15%.

Store expansion was also significant in Argentina, where the retailer opened 122 new stores to bring the network total to 846. DIA’s effort to expand its reach was rewarded by the trust deposited in it by its customers, driving the company’s market share 54 basis points wider to 12.59%.

Trade magazine Mercados acknowledged DIA’s emerging market growth project with its Conecta 2015 Award.

Stores by country

Tiendas por pais

Retail format innovation: La Plaza de DIA

In order to satisfy customer demands and improve the shopping experience, DIA continued to renovate and diversify its establishments in 2015. Last year the group added a new neighbourhood supermarket format to its portfolio: La Plaza de DIA, stores located in premium urban locations.

This innovative format is characterised by a strategic focus on fresh produce. These stores are managed by experts at selling meat, fish and cold cuts. La Plaza stores also offer a broad assortment of packaged foods, dominated by name brands, albeit with an excellent range of private-label products. Of the more than 7,500 SKUs found in a typical La Plaza store, 1,500 are fresh products and over 6,000 are fast-moving consumer goods (FMCG) products (4,000 of which name brands and the remaining 2,000, private label).

The store design is dominated by greens and greys, punctuated by wood, colours and materials that evoke the warmth and intimacy of a traditional market. The lighting is designed to make the products stand out.

The layout is designed around the logical progression of a supermarket shop, with the fruit and bakery sections at the front and the meat, cold cuts and fish counters at the back or edges of the stores to make the shopping experience easier. The stores have dedicated beauty sections stocking the main brand names as well as the various categories of the Bonté brand.

These stores come in four sizes, with floor areas of 300, 500, 700 or 1,000m2. All are populated with manned fresh food counters; the only thing that changes is the range composition.

The first La Plaza de DIA stores opened in Andalusia in May, taking advantage of the Eroski stores acquired the year before. By year-end, DIA had completed the integration and transformation of 105 Eroski stores into La Plaza de DIA stores, the majority located in Madrid, Andalusia, Castile & León, Extremadura and Castile-La Mancha. The bulk of the El Árbol stores are going to be transformed into this format over the next two years.

The launch of La Plaza is the result of concerted innovation and the experience learned from recent M&A transactions: this format embodies and epitomises El Árbol’s expertise handling fresh produce, the DIA brand’s outstanding value for money and the HPC specialisation brought by Clarel.

Renovation at Maxi DIA

This synergistic experience also making its mark on the renovation of the group’s largest store format: DIA Maxi. In 2015, the company embarked on the process of refurbishing these stores in Spain, placing greater emphasis on fresh produce. At the DIA Maxi stores the meat, cold cuts and fish counters are currently all manned. Now, shoppers can choose between pre-packaged trays in the self-service refrigerated aisles and shopping at counters where experts can orient them, make recommendations and tailor products to their taste.

Renovacion de Maxi DIA

The meat is delivered to the stores daily and is subject to rigorous quality controls which are carried out each morning. The fresh fish arrives at the supermarkets from the country’s main fish markets, where it is selected by experts, in a matter of hours. In parallel, DIA Maxi has developed new beauty product and baked goods sections. This strategic focus on product quality, expansion of the product range and the improvements made to the display areas have one common objective: winning the customer over and improving the shopping experience.

Bigger product range and new image for Clarel

In 2015, the company worked to fine-tune and enhance its Clarel stores, to which end it launched a store redesign process aimed at moving towards a more modern and neighbourly image. DIA earmarked close to €11 million of capital expenditure to this plan, focused primarily on lighting, the store layout, shelving extensions and visual communication.

Work was performed in tandem on the product range, which currently extends to 6,000 SKUs per store. Thanks to this effort, all of the private-label categories saw their sales increase, except for the food category, thanks to fine-tuning of the product assortment, elimination of larger formats and prioritisation of impulse products and the gourmet private label, Delicious.

Compared to average overall sales growth by category of 3.5%, the sales growth sustained in 2015 by the firm’s private-label HPC brands–Bonté, Junior Smile, AS and Basic Cosmetics–which between them represent 20% of Clarel’s overall range (+1,200 SKUs), stands out at 19%.

This growth is the direct result of the work that went into developing and innovating with these private labels. Since the Clarel trademark was launched, the weight of private-label sales has increased from 15% to 20%, setting it apart from its competitors and conferring the attributes of expertise and exclusivity on this DIA format.

The strategic commitment to the local business landscape and to the supply chain maintained by the company in all its business units is also evident in its HPC format: at year-end, some 90% of the suppliers working with Clarel on the development of its private-label brands were local suppliers.

Max Descuento: efficiency gains

Meanwhile, the group’s cash & carry format, Max Descuento, upgraded its sales areas in 2015 with LED lighting and new and more efficient refrigeration cabinets, reducing costs and making this chain more environmentally friendly.

Max Descuento

The group’s wholesale specialist, which caters to hospitality and food sector professionals, entrepreneurs and associations, enhanced in-store management with the installation of proprietary PoS terminals.

Max Descuento’s in-store offering is complemented by a phone sales service, the ability to place orders by e-mail and a transportation network designed to save customers time.

Store differentiation in Portugal

DIA also worked at format innovation in Portugal, striving to further differentiate its neighbourhood and suburban formats. In this market the company continued to invest in remodelling its Minipreço Market neighbourhood stores, a store overhaul programme proving successful, while testing the Minipreço Family suburban concept with five refurbished stores and one new store opening.

The new Minipreço Market establishments stand out for the new hallmark logo colours–blue and green -, interior and outdoor decoration designed to communicate the new concept to customers, and a broader range of available services, notably in the fresh produce sections. Some 172 stores were transformed over to this format in 2015.

With an average floor area of 800m2 and customer parking, the Minipreço Family establishments are located in the outskirts of the main cities and offer shoppers a range of over 4,000 SKUs for bigger shops.

Minipreço Family stores have manned butcher, fish and cold cuts counters and a café.

The fruit & vegetable and baked goods sections have also been refurbished and the product displays have been upgraded with the aim of facilitating a more pleasant shopping experience. The beauty section has been equipped with a broader range of HPC goods, populated by a significant number of private-label Bonté products, leveraging in this manner the synergies with another of the group’s formats, Clarel. Transformation of the group’s largest stores in Portugal will take place on a staggered basis over the course of the coming year.

DIA Portugal continued to work to differentiate its neighbourhood and suburban shopping formats

Stores that enhance the shopping experience in Argentina

In its emerging markets, the company went to lengths to try to improve the shopping experience, focusing not only on the ‘what to buy’ decision but also on the ‘how to shop’ equation.

In Argentina, where 86% of the company’s stores are neighbourhood establishments, the image and range of the DIA Market urban format was upgraded successively to adapt it to an ever-changing competitive environment and emerging customer demands. In 2015, over half of these stores (the larger ones) had introduced the full range of perishables and the product range had been increased by over 400 SKUs, adding a bread counter, more perishables and giving greater prominence to the beauty products section.

In August, a new distribution centre was opened in the city of Paraná (Entre Ríos) with a covered floor area of 22,000m2, to service the stores in the provinces of Entre Ríos, Corrientes, Santa Fe, Córdoba and Salta.

Record pace of openings in Brazil

The company opened more new stores in Brazil in 2015 than ever before, inaugurating 130 new stores in total, driving growth of 31 basis points in its market share to 7.15% in tandem.

The process of renovating and updating the Brazilian store network continued, again placing greater emphasis on fresh produce and earmarking a dedicated section to HPC products.

In Brazil, where store openings hit a record in 2015, the effort to renovate the existing store network continued

Shift towards a more efficient store model in China

The Chinese stores are moving towards a neighbourhood shopping model that is unprecedented in the Asian market. The stores are characterised by a solid price image and clean, simple and easily-replicable décor. The new model introduces novelties such as background music, an aisle with special offers, and a dedicated HPC section. In addition, a display area has been set up for the sale of certain value-added imported products (such as olive oil and cheese), including the leading name brands as well as the group’s gourmet private-label brand, Delicious.

The spotlight was placed on improving store profitability and operations last year. The Service Manager figure was created at 104 owned stores; this person combines the activities typical of an owned store with those of a Chinese entrepreneur.

In parallel, the company pursued growth of its franchise model via the City DIA format. The City DIA franchised stores are smaller in size but grant greater management autonomy and require fewer upfront commitments on the part of franchisees. A total of 54 stores were inaugurated under this format in 2015, lifting the total to 91.

The DIA Group received a prize from China Club Spain, the association of Chinese executives in Spain, for its special contribution and work in the Chinese market. The prize, now in its fifth edition, distinguishes the company”s growth and development effort in the Shanghai region and the mentoring work it carries out with Chinese executives in Spain through the China Club.

Strategic focus on omni-channel retailing in all markets

In tandem with expansion of its network of brick & mortar stores, the DIA Group is developing an omni-channel strategy to adapt to the shopping habits of an interconnected customer who wants immediate gratification and expects an enjoyable shopping experience using a range of channels and devices.

In 2015, the DIA Group achieved a new e-commerce platform milestone, launching its online Clarel store (www.clarel.es) in December. Users all throughout Spain can use this platform to purchase more than 5,000 household and beauty product SKUs.

Users all throughout Spain can use Clarel’s new online store to purchase more than 5,000 HPC SKUs

Clarel’s new online store provides users two shopping choices: they can either select products from an online catalogue organised into product categories or they can choose them directly from the content provided throughout the website (videos, blogs, etc.). Once customers have placed their orders, DIA dispatches all over Spain from a single warehouse located in the town of La Almunia de Doña Godina in Zaragoza.

Apuesta por la omnicanalidad

The online Clarel store is also equipped with an app for locating the closest stores; its contents includes store brochures and openings hours and other information of interest, such as beauty tips, new product information and event coverage.

With the aim of integrating its online and offline channels, DIA rolled out a pilot test, creating physical displays for the items on sale on its flash sales platform (www.oportunidades.dia.es) at 21 stores in the Madrid region. Customers can purchase electronic goods, home appliances and other household materials at these showrooms at ad-hoc discounts of up to 70% compared to market prices.

www.oportunidades.dia.es has sustained exponential growth since its creation in September 2013; having started out with just 36 SKUs, it currently boasts 1,000, including kitchen, household, beauty, electronics and bedding items, among others. Its newsletter had more than 400,000 subscribers at year-end 2015.

In an effort to further support its online strategy, in 2015, the company set up DIA E-shopping, an enterprise created following the acquisition of the Moviplans technology platform from Mobile Dreams Factory on 28 July.

DIA continued to fine-tune its e-commerce platform in parallel with development of its non-food online strategy. Revenue from online sales in the Madrid region–where the company has 22,000 registered online customers, up 60% from 2014–increased to €8 million in 2015. Last year was also marked by the rollout of its online store in Malaga and Barcelona.

Elsewhere, La Plaza de DIA customers in Madrid can also shop online via www.laplazadedia.es, a platform DIA also uses to provide information about special offers and upcoming openings, as well as cooking tips.

The online experience at DIA is rounded out with a free app, which is both IOS and Android compatible, which customers can use to compile their shopping lists, locate the nearest establishments and track their monthly spending. Thanks to this app, Club DIA cardholders can avail of exclusive benefits by simply showing the code displayed on their mobile phones to the staff at the checkout. And, since December 2014, they can carry their now-digital discount coupons in their handsets and bring them up for redemption at checkout.

Rollout of e-commerce in China

DIA also focused on its digital strategy in China. DIA’s e-commerce platform went live in this market on 25 December 2015. With the overarching goal of getting ever close to its customers and addressing the needs of an increasingly ‘connected’ customer base, the company has initially rolled out its online store in Shanghai, a city where it had 381 stores at year-end.

Via its online store, www.diatiantian.com.cn, DIA can now serve the entire inner ring of this city with a population density of over 40,000 inhabitants per square kilometre. Order are prepared from a network of 21 owned stores. Online shoppers choose the day and time they wish to receive their goods.

Customers can choose between home delivery and store pick-up to best suit their needs. Moreover, the company offers users a choice of payment methods, including traditional card readers, the Alipay payment platform and China”s most popular instant messaging application, WeChat, where an app has been created to enable users to shop directly from WeChat without going to the company”s website.

A mobile app is planned for China, similar to that already used in Spain, to add even more payment choices.

Launch of the T- Mall Global platform

Under the umbrella of the group’s online and omni-channel strategy, on 11 November, in conjunction with celebration of Singles Day in China, DIA joined China’s largest e-commerce marketplace, T-mall Global. This online B2C (business to customer) sales platform, which is part of the Alibaba group, sells value-added imported goods to Chinese consumers. This project is still at an initial stage of development, currently encompassing a little over 100 SKUs: quintessential branded Spanish goods and a smattering of food products from DIA’s premium private label, Delicious.

Mobile payments in China

Since December 2015, shoppers can use their mobile devices to pay for their purchases in all of the owned stores in China. Using the WeChat platform, customers can use their mobile phones as payment devices by associating a bank card with the payment app. In this way customers can avail of secure, fast and efficient service.

Shoppers can use their mobile devices to pay for their purchases in all of the owned stores in China since December 2015

Club DIA loyalty programme

DIA establishes and nurtures ties with its customers by extending communication bridges and developing loyalty tools devised to enable it to evolve in response to their demands, generate positive experiences and defend its unbeatable price image.

club dia

The most effective instrument for identifying its customers’ consumption needs and tailoring its establishments, products and discounts to meet their expectations is the Club DIA card. This loyalty scheme, which was the first of its kind in the Spanish food retailing sector, provides users with exclusive benefits while enabling DIA to study their behaviour and prepare personalised sales plans in response.

The benefits with which DIA rewards its customers for their loyalty most notably include access to over 250 products at lower prices, fortnightly promotions and coupons with discounts of up to 50%. In Spain, members can use their loyalty cards as payment devices and defer payment for their purchases weekly or monthly through FinanDIA, the company’s financial services arm.

The loyalty programme was introduced into the Brazilian market, specifically the state of São Paulo, in March 2015. What started out as a pilot test in a small number of stores ended the year as a reality in all of the company’s stores in this state, with some 45% of total purchases made using the Club DIA card at year-end.

Since it first created its loyalty programme back in 1998, DIA has issued 32.2 million cards. Its tremendous popularity in the various markets was once again plainly on display in 2015: 74% of group sales were made using the loyalty card in 2015, a year in which 3.4 million new members signed up for the scheme and 1.65 million coupons were printed.

Since it first created its loyalty programme back in 1998, DIA has issued 32.2 million cards

DIA Club card by country

Tarjeta-Club-DIA

Creditos

Edita:
DIA, S.A.
Parque empresarial de las Rozas - Edif. TRIPARK
C/ Jacinto Benavente 2 A 28232 Las Rozas. Madrid - España

Realización y coordinación:
DEVA | Comunicación financiera y sostenibilidad

Diseño:
STROCEN.COM | New Corporate Design

Desarrollo web:
efe6 <Rebuilding ideas/>

Translation:
Tara O’Donoghue

Fotografía:
Jesús Umbría / DIA