Gazin: The regional retail assets are service, logistics and payment terms
exclusive interview with Osmar Della Valentina, president of Grupo Gazin
By Leda Cavalcanti
With 295 stores in the North, Northeast, Southeast, and Midwest regions, Grupo Gazin registers an average growth of 13.5% over the past 10 years and a BRL 5.860 billion revenue in 2020. Lead by a strong retail, it is comprised of 11 companies and over 8 thousand employees. And it has a realistic view on Brazil and its social differences. “There is not a single pattern, there are people who live informally, working for the day, unregistered, who do not have a credit card, so they are unable to finance online purchases. There are cities where consumers go to stores to enter into installment payment agreements and keep their credit cards for emergencies”, says president and commercial director Osmar Della Valentina, working over 25 years for the group, to which he was appointed to assemble the wholesale department that he’s managed through 2011.
His closely-tied work with the group’s founder has accredited him to be his successor, which so took place in 2014. A business administrator with an MBA in marketing and management, Osmar discusses, in this exclusive interview to Eletrolar News, the overall retail challenges, the obstacles faced by regional retailers, and expectations for 2021. In his opinion, the sector’s leading challenge for the upcoming years is being able to adapt quickly to that which is still rather unknown, that is, to the current situation. “Not everything that has worked in 2020 will be true for 2021. Even with important challenges, there are several opportunities. This relates to the way we see things.”
What is your assessment of the company’s 55 years of performance?
Osmar Della Valentina – Gazin, as other companies, has had big opportunities throughout the years, and also big challenges. Opportunities were seized and we took care during difficult moments. Some pillars are essential to us. Always placing customers first, caring for the wellbeing of our employees, respecting shareholders’ equity, maintaining a good relationship with all external partners, and being a company that contributes to communities where it is at, creating jobs, paying taxes or fulfilling people’s dreams through our actions. For five consecutive times, Gazin was elected the best company to work at in Paraná, according to the Great Place to Work Institute.
How is the Gazin Group comprised?
ODV – There are 11 companies. We have a holding and three main businesses which are retail, wholesale, that sells products to small store-owners, and industries (mattresses and springs). In addition, we have other business that support our main ones, such as financial – we sell consortiums in stores, including for electronics. We also have an insurance company, travel agency, carrier, and petrol stations. It’s a large group lead by a strong retail, with 8,644 employees and an income of BRL 5.860 billion in 2020. Our average growth is at 13.5% over the past 10 years.
In which states are the stores located at?
ODV – We boast 295 stores in the states of Acre, Amazonas, Bahia, Ceará, Goiás, Mato Grosso, Mato Grosso do Sul, Pará, Paraíba, Paraná, Rio Grande do Sul, Roraima, São Paulo and Tocantins. We have 22 distribution centers, four of them in Mato Grosso do Sul, seven in Mato Grosso, two in Acre, one in Bahia, one in Pará, one in Paraíba, another in Paraná, one in Goiás, three in Roraima, and one in São Paulo. All of our stores are out on the streets, none of them in shopping malls. In medium and large cities, they are in downtown, however we have a strong presence in suburbs. This is an old policy from Gazin.
Of the products sold, which are those of larger representation?
ODV – By order, electronics, video, furniture, informatics, telecom, handhelds, leisure, domestic appliances and gifts, toys, ventilation, climatization, audio, mattresses, and Gazin upholstery furniture. The electronics, video, and telecom sectors account for over 50% of revenue.
How was Gazin created?
ODV – Mário Gazin, its founder, when he was 16 years old, worked at a store in Douradina, Paraná countryside. When he heard about the owner’s intention of selling his store, he saw an excellent business opportunity, a view shared by his father, Alfredo Gazin, who exchanged the family’s jeep and part of the ranch where they lived for the store. On December 13, 1966, the Gazin story began, with the work of Mário and his father Alfredo. Seven months later, the entire family was involved in the business, that marketed from bulk food to furniture. In 1974, the first branch was opened in El Dourado (MS), managed by Rubens Gazin, Mário’s brother. In 1975, when frost hit coffee crops, a large part of Douradina’s population moved to Mato Grosso do Sul. In 1976, Jair, the middle brother, went to Mundo Novo (MS) and opened the city’s first furniture store. The founder thought of owning only five stores, one for each sibling, and five trucks, but the efforts of all members and the desire of employing more people resulted in new openings and hiring.
What is it like to manage a business in different cultural regions in the Country?
ODV – Despite technology, we have several “Brazils”, there is not a unique pattern. There are cities where consumers go to stores to enter into installment agreements and there are people who live in informality, work for the day, unregistered, and are our customers for over 10 years. These are people who do not own a credit card, so they can’t get financing on online purchases. They seek the reliability of physical retail, including since if they own a credit card, it’s kept for emergencies. That’s why the choose installment agreements. There are cities where cellphone signal is not a thing yet, others where Internet does not work well, and we’ve even reached places without electricity, one more challenge to overcome. In management, we blend the experience of older people with the energy of younger ones. This has been helping our progress. Management is professional. I’m the group’s president and commercial director and work with Ony Mauricio Churkin, administrative director, and Luiz Aparecido Custódio, financial director.
What are the challenges of regional retail?
ODV – They face some challenges nationally, where, for instance, the same precification is used throughout the territory. Regional has higher costs. Thus, it must be competitive, better in customer support, logistics, and payment conditions. But regional retail has its advantages: it knows the local culture and offers special support. In our case, we’re not only in big cities, therefore we are able to have a greater relationship with our customers. This makes the difference.
What differs this chain from the others?
ODV – We aim at technically and psychologically preparing our teams. We work in a simple and objective manner, valuing everyone’s time. Our main business is the physical store, but we have a strong digital presence within them, so much so that 100% of our vendors use tablets for sales since 2013, which makes the process quick and intuitive. We finance 80% of sales with our own credit, 90% of customers have their limits approved, and waiting time is zero.
How would you analyze retail performance in 2020? What were the main improvements?
ODV – The year started off well, but with the pandemic there were difficult times, with closed stores during part of the second quarter. From June onwards, there was an improvement. Since people were going out less, they didn’t spend much with car maintenance and turned their eyes back to products they wished they had in their homes, such as notebooks. Some items were even out of stock. In the end, it was a terrific year, with a growth forecast of 26% to 27% over 2019. Talking about improvements, the main ones were process improvement, productivity, and technology use in businesses.
And what should be upgraded?
ODV – We must make store environments increasingly more comfortable in order for everyone to feel well. Two new stores are being prepared to have a more friendly and cozy environment including a coffee and leisure lounge. We’ve also assembled two solar power stations in Mato Grosso and Mato Grosso do Sul for installing air-conditioning systems at the Bela Vista (MS) and Sinop (MT) units. Our idea is to acclimatize the entirety of our stores. On the other hand, we strive for lower costs, expenses, and improving out support quality, making the company ever more competitive on its path to one hundred years old.
Has the pandemic left teachings to retail?
ODV – The main teaching the pandemic brought us was to learn to change ourselves quickly, never losing hope. For us, it wasn’t the important changes that made the difference, but the speed at which they were done.
In your opinion, what is the future of retail?
ODV – Retail shall remain strong as it ever was, however with a few changes. The mixing of physical and digital is essential. We’ll continue improving our stores’ environments. Physical places are still an important purchase channel, including as a form of leisure. But we’re also walking firmly towards digital, increasingly aiming at a better harmony between both channels. Our platform, which we started development in 2018, has improved significantly in 2020, growing by 180% when compared to the previous year and in 2021 the expected growth is of 100%. I believe physical stores will continue to exist, being a support to e-commerce. What differentiates both is support and reliability. I realize, throughout the years, that people like to visit a nice environment. Irrespective of social class, today’s consumers want to have a nice and priced product. It’s a change in behavior.
How is Gazin preparing to tackle future retail challenges?
ODV – We always try to be a solid company with liquidity. We keep “customers come first” as our first directive. We aim at promoting a healthy and happy work place. Thus, we also improve the sales environments. I believe the sector’s leading challenge for the upcoming years is being able to adapt quickly to the unknown, that is, to the current situation. With that in mind, the chances of success are great.
What are the major issues Brazil still needs to face?
ODV – Excess bureaucracy is still one of them. It’s hard, for instance, to get an autarchy permit if that aren’t committed people within it. Infrastructure and education are other major challenges.
What are your expectations for 2021?
ODV – There are several issues ahead, starting with the pandemic. It’s unknown if what has worked in 2020 will be true for 2021. There are multiple uncertainties, but it’s clear that private initiative will have a large role in the Country. We’ll wait for the first quarter. We ought to see how the government will behave and how foreign investors will come to Brazil. We must be more cautious in our project. We will invest 1% of revenue, as we do annually. Even with important challenges, there are several opportunities. This relates to the way we see things. I’m optimistic. At Gazin, we look more at opportunities than challenges.
“The main teaching the pandemic brought us was to learn to change ourselves quickly, never losing hope. For us, it wasn’t the important changes that made the difference, but the speed at which they were done.”
“Retail shall remain strong as it ever was, however with a few changes. The mixing of physical and digital is essential. We’ll continue improving our stores’ environments. Physical places are still an important purchase channel, including as a form of leisure.”
“In management, we blend the experience of older people with the energy of younger ones. This has been helping our progress.”
Source: Eletrolar News Magazine 140