Stores Koerich: BASED ON ORIGINS AND EYES ON THE FUTURE
Born and developed in Santa Catarina, the retail chain has established itself through its credibility and positioning as a regional retailer, which speaks to the cultural plurality of the State. Adept at new technologies, it expects revenue of BRL 970 million in 2023.
By Leda Cavalcanti
It all started in 1955, when Eugênio Raulino Koerich, patriarch of the family, opened his first deli and warehouse, in São José (SC). He sold dry and wet goods, and meat from his own cold storage. With a large family, he felt the need to create new work fronts. Then, his sons, Antonio, and Walter, went to Florianópolis, where, a year later, the first Fiambreria Koerich was born, an innovation in the market, which gained six branches. In 1962, the supermarket arrived and, subsequently, the first furniture store.
Business has evolved. In 1968, Koesa, the first Volkswagen dealer in Florianópolis, and Consórcio Koerich were opened. In the 1970s, in partnership with Frios Macedo, Macedo Koerich Ltda. was founded, which became one of the leaders in chicken farming and sale in the region. From another partnership, Kobrasol Empreendimentos Imobiliários was born. In 1977, the Lojas Kilar chain was founded, aimed at the more sophisticated furniture and household appliances market, and, in 1980, Kimoto, a Honda Duas Rodas dealership.
The multiplication of enterprises took place in different sectors: motorcycles, automobiles, construction companies, department stores and shopping malls. In 1993, after a consensual split, Antonio Koerich and his sons took over the management of the retail, which then had just over 40 stores. Currently, there are 126, practically throughout the State, with 1,500 employees. “We are, today, the only genuinely Santa Catarina retail brand in our segment”, says the president, Antonio Koerich, in this exclusive interview with Eletrolar News.
What motivated the diversification of activities?
Antonio Koerich – Diversification is one of the hallmarks of the companies I lead. In addition to the retailer, we currently have Kredilig, which is one of the three largest financial institutions in the country; KAB, focused on digital transactions; KLAB, innovation laboratory; KGN Construções; Koan Venture, focusing on the startup ecosystem; RKS and the holding company ERK. And we are shareholders in Beiramar Shopping, WOA Empreendimentos Imobiliários and Zita
Why the option of staying just in Santa Catarina?
“The decision to center our operations in Santa Catarina is strategic, it includes market knowledge, proximity to the population, identification, and origin. We have great growth potential in the State.”
AK – We are at our consumers need us, which is why it is possible to find our brand in small, medium and large centers. The decision to centralize our operations in Santa Catarina is strategic, it includes market knowledge, proximity to the population, identification and origens. We have great potential for growth in the State, and this is our legacy. We are, today, the only genuinely Santa Catarina retail brand in our segment.
How do you evaluate these years of Koerich’s operations?
AK – There were years of hard work, dedication, and abdication. We dared, we went in search of something different, we went through adversity, whether economic or what every new business has always faced: gaining consumer credibility. We invest in communication and close customer relationships. There is no one who doesn’t remember the catchphrase “Koerich prize is a prize given”, and one of our spots even became a carnival jingle. Every time we arrived in a new city, we would ask permission and invite the population for a cup of coffee, as we always wanted to be a friend’s house. Thus, we “expanded our relationship with the population and our identity with consumers. I am categorical in saying that the future of retail is the past. Not the past of things, but with the certainty that the focus needs to be on the customer, generating a purchasing experience. It is necessary to go back to the time when store owners knew their customers by name and knew their history. Therefore, emotional intelligence gains prominence. That’s why brands must find new ways to create more intimate relationships with consumers.
What factors make Koerich successful?
AK – Work, work, and work. In addition to always being surrounded by committed people, with market knowledge and eager for new things, for discovery. That’s what moves us. And we understand who we want to relate to and how we are going to develop this process, knowing the peculiarities of our audience, while continuing to innovate to attract more and more consumers.
When did the sale of household appliances and furniture start?
AK – Koerich is a company that is almost 70 years old, has always maintained its origins and sought to anticipate progress and new developments to maintain its relationship with consumers and the market. In 1993, my children and I started managing retail stores and focused on the electronics, household appliances and furniture line. Currently, we also have a model that we call megastores, where consumers can find everything that they need to set up their home. These are stores with more than 2,000 sqm and with products distributed across consumption areas. Furthermore, we have our e-commerce portal, a channel that further amplifies our investments in the shopping experience.
What size do regular stores have?
AK – The average size ranges from 600 to 1,000 sqm. We have invested in standardizing furniture and ambiance of spaces, focusing on the customer experience in our stores. And we have a distribution center in Biguaçu, in Greater Florianópolis, where the company’s administrative area is also concentrated. Built with advanced technologies, opened in 2017 and with its first expansion in 2021, it is on a plot of 60 thousand sqm. It has a built area of 35 thousand sqm and is prepared for further expansion.
“Online sales are a strong enabler with significant results, but it is consolidated with the experience that the customer already has with the brand.”
How does the company operate in logistics?
AK – We have an internal logistics department and operate with our own fleet, with cars, vans, and trucks, as well as outsourced vehicles. Currently, there are 80 vehicles in operation in the State, of which 58 are from our own fleet.
What was the revenue for 2022 and what is projected for 2023?
AK – In 2022, revenue was BRL 860 million, and the projected for 2023 is BRL 970 million. In 2022, we grew 10% over 2021 and we expect to close 2023 with 12% growth over the previous year.
In terms of products, which are the most representative?
AK – Our focus is on furniture, household appliances, and technology lines. With the arrival of our megastores, we are including the bed, bath and beyond categories, as well as housewares, in the mix.
What message does Koerich convey with the slogan “Good People, Our People”?
AK – The message is strong and says a lot about our personality. “Gente Boa, Gente Nossa” (Good People, Our People) represents us a lot, always trying to meet and exceed the customer’s shopping desires. For us, it’s a sale, for the customer it’s a dream come true, and we reinforce this mantra every day with our employees.
What strategies differentiate the company?
AK – Identification with the community, with the public, positioning as a regional retailer, which speaks to the cultural plurality of Santa Catarina. This trajectory was built based on our solid origin and the policy of being increasingly closer to consumers. We invest in ease of payment, in relationships with the public, with decentralized stores, and we are always attentive to market changes.
Is regional retail more personalized?
AK – We believe that yes, we are closer to the habits, customs, and traditions of our customers and, therefore, we can maintain a direct language of communication, be assertive and have less chance of making mistakes. We work with local dates, political emancipations and city anniversaries, religious and traditional dates. With each advertising campaign we try to be closer to the thinking of the Santa Catarina consumer.
“We believe that 2024 will be a promising year for the company, and the affirmative is based on three indicators: drop in the unemployment rate, reduction in interest rates and controlled inflation.”
And what are the biggest challenges?
AK – Among them, there is extensive negotiation with suppliers, the establishment of networks and direct coordination with manufacturers, also positioning us as a facilitator to the market, such as, for example, in relationships with smaller retailers.
How do you evaluate Brazilian retail?
AK – Retail has been anticipating trends and adapting to market needs. Technology is a link that connects and maximizes results. Digital transformation is growing and has been boosting revenue. We already have processes using artificial intelligence and we have added some startups to our administrative area to solve and even follow up on technological demands. All of this to take a step forward or, at the very least, be aware of changes when they emerge as trends.
What are the advances in our retail?
AK – We can highlight digitalization, the arrival of PIX and new means of payment, the valorization of relationships, brand, and customer with the strengthening of installments, analysis, management and personalization of data, customer centricity, omnichannel experience, expansion of sales channels and the cultural transformation of retail.
Is default a problem for retailers?
AK – We have one of the lowest default rates in the country, Santa Catarina occupies the penultimate place, with 36.74%, according to data from Serasa from May 2023. We have a hardworking Santa Catarina citizenship, thoughtful in his purchasing decisions and with great financial planning. Our stores can negotiate products within the customer’s expectations, and this means that we have good sales results and a low level of defaults.
Does Koerich have its own credit and financing?
AK – Yes, we have Kredilig as the finance company for all our group’s operations. It is among the three largest financial institutions in the country. All investments made have always been their own, and this is one of the great successes, a capitalized company has more power in the market. Furthermore, with product diversification, we strengthen other areas of the company. The finance company also operates in the areas of personal loans, and KAB, an operation that was created within our innovation laboratory, offers credit cards for customers. The next step is to enter the fintech market. Currently, purchases with direct financing from the company account for more than 50% of transactions at Koerich.
What will the company’s trajectory be like from now on?
“I am categorical in saying that the future of retail is the past. Not the past of things, but with the certainty that the focus needs to be on the customer, generating a purchasing experience. It is necessary to go back to the time when store owners knew their customers by name and knew their history.”
AK – We are ready for the future; we have three generations running the day-to-day of the company and I have made them familiar with all the phases and processes of retail. This enables them, in my absence, to assume the legacy left by my parents with tranquility and administrative zeal.
In which areas has the company invested the most in recent years?
AK – We invested in new stores with an accelerated expansion plan. Since 2020, there have been almost 20 stores and new models, such as megastores. The areas of logistics, technology and communication with our audiences have gained attention. In 2023, we invested in process and technology improvements to deliver a better purchasing journey. We increased our capillarity with eight new stores and consolidated the concept of the megastores project, which we started working on in 2020 and which saw major expansion in 2022. We invested in team qualification with the creation of a training channel, podcasts with relevant information from month and training events. We reformulated communication with creative campaigns and broke borders with the opening of KAB to Rio Grande do Sul and Paraná states. The project with the greatest impact will be KPlace, which we will launch at the end of 2023. It is Koerich’s marketplace, which will allow us to increase the variety of products in our stores and website. In 2024, our investments will continue in this line.
When did the company enter e-commerce?
AK – In 2009, with the launch of the www.koerich.com.br portal. We launched a platform designed to serve our audience, initially selling to cities where we already had physical stores. In 2015, when the group turned 60, we started selling, via e-commerce, throughout the State and brought the Koerich credit card to customers. It is endorsed by Kredilig, a finance company belonging to the Koerich group. In 2017, we also began serving the states of Rio Grande do Sul and Paraná. In 2019, we launched the option to purchase on the website and collect it at a store of the consumer’s choice, one hour after the transaction. With the arrival of the pandemic, new technologies were added to our online sales channel, also with augmented reality.
Is the combination of physical and digital fundamental?
AK – Online sales are a strong enabler with significant results, but it is consolidated with the experience that the customer already has with the brand. Phygital retail, with the synergy between the physical and digital point of sale, provides the maximum possible fluidity between online and offline consumption experiences. And this materializes in total integration between the brand’s channels, in other words, it is an approach that goes beyond omnichannel. The combination of physical and digital is fundamental and is at the center of actions with our audience.
Does Koerich have street and shopping mall stores?
AK – We have a store at Beiramar Shopping mall, in Florianópolis, the first in the capital of Santa Catarina. The rest are on streets, both in central areas and in neighborhoods, following our policy of being increasingly closer to consumers and meeting their demands. Our concept of megastores, with an immersive consumer experience, is growing. The shopping mall store follows the retail concept, with white and brown lines.
Are there plans to expand the number of stores?
AK – Yes. This semester, we have 10 confirmed openings, five have already taken place and the rest in the last two months. All regions are mapped, in line with consumption trends and population growth, covering the north, south, center, and mid-west of Santa Catarina. The latter is a recent expansion process, aiming at the brand’s arrival in the west of Santa Catarina in the medium term.
What is the current consumer profile like?
“Currently, we also have a model that we call megastores, where consumers can find everything, they need to set up their home. These are stores with more than 2,000 sqm and with products distributed across consumption areas.”
AK – Younger consumers are less loyal and focus their attention on price, while focusing on experiences. Consumers who have already developed a relationship with the brand, synergy and proximity are loyal and attentive to market transformations. In this sense, we have invested in multichannel experiences and increasingly personalized service and the way we purchase. Today, consumers can make their purchase from anywhere, without having to go to a store, and can also receive their product wherever they want, from their trusted seller, through an app and without bureaucracy. Using data analysis to achieve this understanding and achieve consumer desires is our focus.
What are your expectations for 2024?
AK – We believe that 2024 will be a promising year for the company, and the affirmative is based on three indicators: drop in the unemployment rate, reduction in interest rates and controlled inflation. With the fall in interest rates and having own financing as a stronghold, this will be the driver of growth for next year. We are prepared to provide credit and have the structure to deliver excellent customer service.
Source: Eletrolar News Magazine – Edition #158
