Discounting - Conforama's winning formula ?

For the last 18 months, Conforama has been reaffirming its position as a multi-style discounter loud and clear.

If Conforama is questioning its role, it's with the aim of serving its customers better. As number two in home appliances worldwide, Conforama might be happy to rest on its laurels. But that wouldn't be Conforama's way, always careful to stay in tune with the times. For what we are seeing now is that goods retailing is becoming polarized between luxury and discount, to the detriment of the middle range, in a logical response to changing buyer behaviour. A single consumer can “let himself go” on certain purchases and set aside a large budget for them, while for other things he will seek out the best prices, with the proliferation of retailers giving ever increasing choice for comparison.

Differentiating itself
It is in this context that Conforama has undertaken the task of “differentiating itself and marking out its personality” in the words of its Chairman, Christophe Cuvillier. How to define discount? As Conforama sees it, it is a retailing model based on price cuts across the entire range of products and not just on promotional leaders as is the way of hard discount. In a discount retailer, the product, assortment and price range are a lot wider than what you would find at a hard discounter, who only concentrates on the bottom of the range. In view of its evolving customer base, Conforama has to distinguish itself from the rest by performing well in all areas: choice of products, price, quality, store display and services. One of Conforama's strategic axes is reconciling discounts with quality. Sacrificing quality in the drive for low prices is out of the question. Conforama does what H&M has succeeding in doing in textile retailing by combining low prices, style, choice and variety. As regards service, Conforama has built on an already irreproachable level of service with new services geared towards its various markets and types of customer.

DNA reaffirmed

For this discount model to be a success, there are four key factors: the choice of products, which must be tailored to the chosen target; effective communication; effective in-store presentation; and finally, finding the best suppliers and logistical circuits. Conforama must also make sure that these changes are well perceived. Christophe Cuvillier explains: "The modernization process we began in 2001 could have been seen as moving up-market, or as a move away from our role of multi-style discounter. But discounting and multi-style are part of our DNA. This is why for the last year and a half we have been redefining our mission as a discounter, and have been hammering home the message both internally and externally and in our shops" As a result we have a new advertising signature "Comfort at home at an affordable price" and a small screen commercial campaign which ran for four weeks last March. In-store we have a new price display system supposed to be clearer and more aggressive, and our collections have been reworked to offer the best prices on the market in the majority of product families.