Russia: discounter's use gamification to grow sales by 200%

Discount Retail Chain Dixy (owned by Dixy Group) has been piloting its own loyalty program Dixie Friends' Club in the Russian Volga Region. During 2020, the retailer facelifted 700 stores across the country. The economic situation spurred the development of private label brands, and the gamified loyalty campaign cracked showed record results. Vadim Makarenko, Marketing Director of Dixy, explains more on it.

How many Dixy discount retail stores are there now, what divisions do consist of, where and in what formats do your stores operate?

Our geography is quite wide: 2,800 Dixy Group stores are represented in 25 regions. The main business is concentrated in the Central Federal District, as well as in northwest Russia and the Urals. We are a multi-format chain, we have discounters, supermarkets, hypermarkets and even one cash & carry store. This year, we have about a hundred new stores, mainly in the discounter format. But in general, the company is now focusing on the reconstruction of existing stores, we are not planning any large-scale expansion yet.

What is the impact of the COVID-19 pandemic.

I would not divide the problems of buyers by geography. The pandemic has impacted various consumer and economic sectors. It cannot be said that, for example, pensioners suffered the most. On the contrary, their income has been preserved, and the economically active population has suffered. Historically, our stores are located close to where people live, so the pandemic did not negatively affect us. But we must change and adapt to the interests of our buyer both during the crisis period and after it. So, for example, now a 4% drop in income is predicted, and people are switching to private label products.

Last year you presented an updated store format. How many stores have already been updated?

Just a few days ago we celebrated the remodeling of the 700th store. This is a large figure, considering that we did all the work in six months. We opened the very first Dixy store in a new format more than a year ago in Moscow, but it did not go into circulation. We were looking for a more suitable option. And again, we did not divide outlets by geography, we chose them according to their importance for the client. As a result, renovated stores appeared from Kaliningrad to Murmansk and the Urals.

How do demand and average basket sales change?

I cannot give an exact figure, but the average basket sales both with us and in the discounter market as a whole has increased significantly.

What is the portrait of a network buyer?

We have two audiences: main and strategic. The main one is people aged 45+ with average and below average income. They usually have grown-up children. They are looking for value-for-money and have a clear budget. This audience is loyal to us, many of the company's processes and our assortment range are focused on meeting these needs. Also, for the last 4-5 years, we have been growing our strategic shopper audience, which at the moment has already reached the level of the main one in terms of turnover. According to a recent study that Gfk conducted for us, these are young women between 25 and 40 years old, working,