The Saint Petersburg ecosystem

"We are growing from DIY," says Igor Kolynin, marketing director at Petrovich, when he is asked to describe the latest development of the company. That is not entirely a matter of course, because after all, the trading company with headquarters in Saint Petersburg originally comes from the building materials trade.
And it may even be somewhat understated because Petrovich has been distinguishing itself for many years as the retailer on the Russian home improvement market that uses the opportunities of digitalisation and omni-channelling most consequently in its business field and sets benchmarks also beyond the Russian market.
For example, Igor Kolynin already introduced the concept of the "Digital Room" at the Global DIY-Summit in Dublin two years ago. Petrovich has set up a digitalised store in two shopping centres in which the customers receive inspiration and advice and can also order products at the same time. However the retailer has had to realise that it is already much more advanced than its customers: "People are not ready for that," Kolynin sums up the pilot attempts. "However, the digitalisation of our retail sites forced people to purchase through the e-commerce channel much more than ever before," he says.
That does not spoil the overall development for Petrovich. The company already worked itself up to a top position a long time ago and in 2018 pushed the Russian stores by the German chain Obi from second place in the sales ranking. Last year, according to its own reports, it made sales of RUB 73.5 bn (excl. VAT, EUR 851 mio). That was an increase of 22 per cent - 10 percentage points more than market leader Leroy Merlin.
But what says much more about how Petrovich ticks is: more than half, namely 54 per cent, of sales are now being generated by the Saint Petersburg company through e-commerce. Because it is clear to the Petrovich management where the real threat to the former business model in the DIY market comes from: "All the markets are under pressure because of Amazon," says Igor Kolynin bluntly. "That's why we have to beat these market places before they enter our market."
In all of this, one has to know that Petrovich makes around 60 per cent of its sales through end consumers and 40 per cent with trade customers. In Saint Petersburg, the home of the company, 95 per cent of all professionals are Petrovich customers. In the Greater Moscow area, where expansion has continued for five years, the retailer doubles its professional sales every…