Annual Report2013

4.1 // Proximity

Convenience and empathy, the keys to customer satisfaction

Proximity to the customer is the cornerstone underpinning DIA’s business. Since it was founded in 1979, the company has focused strategically on neighbourhood stores and on fostering close and long-lasting relationships with its customers so it can identify their needs and tailor its establishments, products and pricing to meet their expectations. In 2013, it diversified its neighbourhood store network with the Clarel chain of health, beauty and household goods stores, increased its range of perishables, established a foothold in e-commerce and extended the use of its loyalty card, Club DIA, which turned 15 last year, in China.

DIA has over 45 million customers worldwide. Aware of the strategic importance of earning their loyalty in an increasingly competitive environment, DIA orients its business towards total customer satisfaction.

With this goal in mind, it has created a model predicated on proximity, understood not only as physical proximity but also a relationship based on mutual trust which translates into an ability to understand and meet their needs and preferences.

4.1.1 Geographic proximity

Under the slogan, “Quality and price are closer than ever”, DIA offers its shoppers the chance to fill their baskets with quality products at competitive prices without going far from home. To this end it operates 4,502 neighbourhood supermarkets under the DIA Market trademark in which it shoppers can do their daily and weekly shops during long opening hours without having to incur transport costs. In line with its firm commitment to perishables, the company also operates two formats that specialise in this segment, DIA Fresh and Fresh by DIA. These formats are being used as the testing ground for the development and improvement of the group’s fresh product offering. Almost 78% of the stores operating by the DIA Group are located in urban or rural areas.

As part of its attempt to deliver customer satisfaction on every shopping occasion, DIA also operates another retail format designed for less frequent and larger-volume shops: the DIA Maxi stores. These supermarkets, 1,611 in total, are located in suburban areas and include parking facilities.

In Portugal, DIA operates under the Minipreço trademark. The Minipreço format echoes the DIA Market concept in the neighbourhood segment and emulates the DIA Maxi stores in the suburban segment.

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New Clarel stores

True to the company’s growth model, which is predicated on the right combination of proximity-quality-price variables, in 2013, it added the Clarel chain of convenience household and personal care stores to its network.

This new trademark was born in November 2013 as a result of the integration of Schlecker’s 1,129 stores and four distribution centres in Spain and Portugal.

This strategic acquisition reinforced DIA’s leadership in the neighbourhood shopping segment and diversified its business into a new specialist retail channel – household, health and beauty products – which presents significant upside.

Thanks to this new store format, the group is now offering unbeatable prices across a wide range of cosmetics, home and personal care, pet food and baby food and care products.

The company began to reform the former Schlecker stores at the end of the year. This process will culminate in February 2015, which is when the Schlecker license agreement in Spain and Portugal expires.

In addition, the group opened 60 new Clarel stores in Spain and Portugal with a view to introducing the brand and concept in the regions in which Schlecker lacked a meaningful sales presence, essentially southern Spain. The company plans to open over 100 new Clarel stores a year in Spain and to introduce the trademark into the Portuguese market in 2014.

4.1.2 Coverage of daily needs

DIA is evolving to adapt to its customers’ emerging shopping habits: spending control, quick shops and concern for the environment. With this goal in mind it is improving the shopping experience year after year, focusing decisively and strategically on perishables in all its establishments, increasing its private-label range and taking its first steps in the world of online shopping.

The DIA Maxi and DIA Market stores have been transformed in recent years in order to transmit a modern, attractive and customer-friendly feel. This transformation materialised in an image revamp for the entire store network and a strategic focus on perishables and the development of private-label products. This process, initiated in 2007, has equipped all of the group’s stores more attractive facades, materials and lighting.

In the wake of the acquisition of the Schlecker stores in Spain and Portugal, the group fine-tuned the resulting range of cosmetics, household goods and health and beauty products by developing a new private-label personal care brand, Bonté, and repositioning inherited Schlecker private-label brands such as Basic Cosmetics, AS and BabySmile. Some of these private-label brands are also on sale in DIA stores.

Extending the group’s strategy of trying to drive more frequent visits to its stores, the weight of perishable goods was increased in all its establishments in order to cater to customers´ daily shopping needs. Fruit, vegetables, bread, meat and fish currently garner more shelve space at DIA stores than ever and 12.18% more than in 2012.

DIA has been developing this strategy at its DIA Fresh and Fresh by DIA formats (Mini Fresh in Portugal). The idea is to use these platforms as the testing ground for turning the company into the specialist, in terms of product range and excellence, in fruit and vegetables.

Fresh products are garnering more and more shelve space at DIA stores, commanding 12.18% more space in 2013 than the year before

DIA Fresh is a smaller format, with an average floor space of 150m2, and, as its name suggests, a product offering based on fresh products such as fruit, vegetables, meat and fish. Personalised customer service is what makes Fresh by DIA stores unique, thanks to these establishments’ manned bakery and fruit and vegetable counters. Other developments in these formats include the growth in the fine wines and deli meats ranges in the gourmet sections and the addition of self-service dried fruits and grains to the selection of products that can be bought by the kilo.

DIA and health foods

Sensitive to the demands of consumers with special needs, in 2013 Fresh by DIA expanded several of its product ranges in this respect, particularly its selection of diet products, nutritional supplements and organic products.

In addition to expanding the range of health food, organic and gluten-free products in 2013, it is worth highlighting the efforts to improve these products’ packaging and supermarket aisle labelling. In Spain, where more than 400 DIA stores have special gluten-free product sections, 130 DIA products are labelled as gluten-free and are included in the list of foods deemed suitable for celiacs compiled by FACE (Spain’s Confederation of Celiac Associations). In Portugal, Minipreço customers can check out this list on the chain’s corporate website. In Brazil and Argentina, the private-label food ranges disclose whether or not the products contain gluten, in keeping with prevailing local legislation. In France, organic products were given more shelf space in the DIA Maxi stores.

Engaged in promoting healthy habits on the part of its customers, regardless of their purchasing power, DIA France laid the groundwork for the OPTICOURSE Project, an initiative being pursued in collaboration with public research bodies (INRA, NORT) in order to promote balanced diets for people on tight budgets. (See the Sustainable Development Report for more information on this initiative).

Multi-channel strategy

The supermarket chain is rounding out its strategy of getting close to its customers and meeting their every need with the incipient development of an e-commerce strategy in Spain, articulated around four platforms: the online store, mobile apps, flash sales (special offers for a limited time only) and delivery pick-up points.

DIA launched its e-commerce platform in Madrid, a market with four million customers. Uniquely, the group is combining online sales with in-store pick-ups. This model, to which DIA brings the advantages of its entrenched position in the neighbourhood segment, has proven successful in other countries.

In parallel, the group made progress on developing its Android and iOS apps; so far these applications enable users to prepare shopping lists, locate stores on a map, view special offers and look up Club DIA coupons.

In July, DIA got its feet wet in ‘flash’ sales when it set up www.oportunidades.dia.com; the company uses this website to offer articles that are not sold in its stores at reduced prices during a brief period of time.

Lastly, the company rolled out PuntoDIA, an original initiative under which DIA stores become pick-up points for the e-commerce customers of ASM, the logistics operator DIA is using initially to develop its online strategy. This initiative is the result of an idea that came from the in-house executive training program and idea incubator.

The goal of this innovative project is to draw new traffic to DIA’s stores.

4.1.3. Open and long-lasting customer relationships

DIA builds close and long-lasting relationships with its customers on the basis of mutual trust and regular, open, two-way communication.

In order to maintain and nurture this link, the company talks to its customers when they are in its stores, listens to what shoppers want on its customer service line, continually opens new in-person and online communication channels and, uniquely, rewards its customers’ loyalty in the form of the tangible benefits offered to Club DIA store cardholders.

In 2013, DIA rolled out a pilot test at 30 Spanish stores aimed at reinforcing the teams’ customer service attitude; the initiative included retreats for the entire sales chain from sales managers to cashiers at the affected stores.

With the dual objective of providing solutions and improving its offering and service, the company listens to, records and analyses the complaints, suggestions and praise voiced by customers through its customer service channels. In all, DIA received 92,912 customer enquiries through its various channels in 2013 on the issues of greatest interest to them: stores, products, Club DIA, etc. In addition, the group handled 100,168 phone calls from customer and non-customers.

As part of its customer relationship management, DIA publishes the Club DIA magazine, which contains information of interest to its cardholders and boasts a print run of 700,000 copies. The magazine includes useful nutrition and health guidance, suggested family activities, recipes, information on new DIA products, interesting facts, advice and practical tips.

DIA maintains a dynamic presence on the main social networks. It encourages its customers to participate in its blog called “A Day in my neighbourhood” (with a pun on DIA in the original Spanish title). The goal of this blog is to get to know customers better, find out more about their neighbourhoods and understand how their local supermarkets form part of their daily lives. In 2013, DIA also launched a culinary initiative designed to introduce shoppers to the world of gourmet cooking and demonstrate that keen cooks can also use DIA products to make exquisite dishes. Last year DIA also organised its first national cooking competition for the best semi-professional chef.

At year-end, DIA had 143,000 Facebook fans in Spain, 753,200 in Brazil and 320,220 in Argentina and was continuing to add Twitter followers, having notched up 4,649 followers in Spain, 892 in Argentina and 23,400 in Brazil.

The company holds weekly sessions called “Experts in Saving”, in which it engages interested customers with its business model, showing them how the organisation manages to trim costs in order to bring them top quality at unbeatable prices.

Thirty-two of these meetings, in which 5,000 customers participated, were held in Spain, France and Argentina, the countries in which this initiative is run. In 2013 the group organised the first ‘National Summit of Experts in Saving’ in Argentina in conjunction with the launch of its Experts magazine and also the first Private-Label Brand Trade Fair.

Club DIA loyalty card turns 15

The Club DIA card is the tool that provides the company with the most important insight into its customers´ tastes and preferences. This valuable loyalty system, a frontrunner in the sector without parallel, turned 15 in 2013.

As is often the case with the initiatives launched by DIA, the group´s loyalty card was developed in-house and is a crucial component of the company’s price image and strategy. It also helps the company to formulate sales plans with its suppliers that are more cost-effective and beneficial for all.

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The Club DIA card offers its holders significant exclusive benefits, including access to more than 250 products at special prices, special offers that are renewed fortnightly, discounts in the form of coupons and even the possibility of deferring payments weekly or monthly through Finandia, the financial services company which manages the company’s store payments and the products associated with the card in Spain. This company is supervised by the Bank of Spain and is duly registered in the corresponding register of credit entities and a member of ASNEF, the national association of credit establishments.

Every year the company prints over 1.5 billion coupons across its operating markets. These coupons offer Club DIA cardholders savings of up to 50% on a broad range of products which are selected as a function of each customers’ shopping preferences.

Since it was created in 1998, the company has issued over 31 million loyalty cards all over the world

Since it was rolled out in 1998, the company has issued 31.2 million cards; moreover 71% of the group’s total sales were paid for using its loyalty card in 2013, amply evidencing the runaway success of this tool.

In recent years, DIA has invested a lot of resources in bringing this program to all its operating markets. The card was introduced in Portugal in 2000, in Argentina in 2006 and in France in 2010. 2013 marked the massive rollout of the store card in China, while in 2014 DIA plans to introduce the card in Brazil, a market growing in importance for the group year after year.

Credits

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

Production and coordination:
DEVA | Comunicación financiera y sostenibilidad

Design:
STROCEN.COM | New Corporate Design

Web development:
efe6 <Rebuilding ideas/>

Translation:
Tara O’Donoghue

Photography:
Jesús Umbría / DIA

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