Innovative and human-centric cultures in retail

RETALES, from retailers to retailers, with Frédéric Lamy | Episode 6

In this episode of RETALES, we talked about what makes home improvement retail and its customer experience unique.To do so, we spoke to Frédéric Lamy, the CEO of Leroy Merlin Romania, a key player in the global DIY market, who shared with us his expertise on what makes a global retailer successful.

What makes a DIY store so special is the personal nature of the purchase. “Everybody has a home, whatever its conditions or purchasing power. And when you buy something for your home, you touch a personal aspect of your personality, of your history, of your past experience”, Frédéric explains.

That’s why the customer experience is so important in this industry, and today’s customer is very demanding. So “you have to try all the time to be inventive, to be adaptable”, he explains.

Also, according to our guest, the key to success as a global retailer is innovation. In fact, one of the most common mistakes retailers make when trying to position themselves in new markets is to copy and paste a strategy that has worked for them before.

But to be innovative, you have to find the right tech partners. And that’s a challenge. “Finding tech partners is not complicated. Finding partners who will understand what you are searching for in your consumer experience it’s much more complicated”, Fréderic says.

Another key player of the optimization of this customer experience are employees. And, therefore, creating a good company culture, what our guest calls “a culture of progress”, is very important. “Maintaining a great relationship, a proximity relationship, caring about the people, managing them properly”, Frédéric affirms it’s the core of it. “When you do that, you create a trust environment”, he continues, “and the people are ready to give all what they have, they give you their energy, their enthusiasm”.

In the end, according to Frédéric, there are two keys to success in leading the retail industry today. First, to be successful in the long term “you have to innovate”, “keep investing in your store’s quality, on your products”. And, second, is to be ”consumer-centric and human-centric”. “As a business philosophy and as a leader, you have to make your people happy”, he concludes.

Listen to the entire conversation to discover more insights from Frédéric Lamy on home improvement retail and how to be successful as a global retailer. A transcript of the entire episode is also available below. And don’t forget to subscribe and share this episode of RETALES, from retailers to retailers.

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ADARA
Bueno, bueno, bueno… Hello,  you’re listening to “RETALES: from retailers to retailers”. The podcast that takes a deep dive into the ins and outs of the retail industry and what is headed it. This is the first episode of 2023, happy new year to everybody!I hope you had great holidays.  I am Adara Gonzalez, CRO and if you like home improvement in gardening retail  stores, you’re going to love today’s episode because our guest is none other than the CEO of Leroy Merlin Romania. A key player in the global, do it yourself market. Frédéric Lamy, welcome to RETALES and happy New Year.

FRÉDÉRIC
Good morning to you. Good morning to all our listeners. Very nice to see you this morning and happy New Year to all of your listeners and our listeners today. We’ll try to share a lot of things about retail this morning and  I’m very enthusiastic about it.

ADARA
Thank you, thank you for being here. We are very happy to have you here. Let’s talk retail!

You have more than 30 years of experience in the industry. In addition to Leroy Merlin, you have worked with other large retailers such as Darty and Dyson, both major home appliances retailers. From your expertise, what makes a global retailer successful?

FRÉDÉRIC
Well it’s a large and complex question to start… I think there are different elements which can help you to make you successful in retailing. I would say that the most important  element is passion. The passion for customers first of all, to understand the customers, to understand the way they are trying to improve their home. The way they are projecting  themselves in their house. Trying to transmit this passion to your customers and to transmit this passion to the people you are working with. So as a very simple answer, I  would say that it’s a mix of passion and empathy. In being customer centric and human centric. As long as you try to do that every day, which is not so simple. Sometimes in a very unstable context or global geopolitical outlook, which are looking  very complex. As long as you are trying to understand in a “reciprocity process” with both, your customers and your team and people, because in retail your team is essential to succeed in developing your business. The better you are, the better chance you have to propose a great customer experience and the long lifetime journey with your people and customers.

ADARA
Awesome, I really like what you said about projecting themselves into their home. I think that that’s beautiful. So one of the great challenges of being a global brand is to position yourself as a leader in different markets. In your case, you have been CEO of Leroy Merlin in Romania since 2014. Before that, you were CEO for 3 years in Turkey. You have also been in Indonesia analyzing the potential of the DIY market there. What do you take into account when developing the business strategy for a new market and what lessons have you learned from your experience in different countries?

FRÉDÉRIC
Very interesting question. As you mentioned, I had the chance to work in three different countries. Very different countries with some common points.  And what I can tell you is that it’s a work for which you are not always successful.  Because sometimes understanding the market and adapting the business strategy doesn’t face  the same success and doesn’t mean the same expectations from a customer and from a market to another. To answer your question sincerely, I think the most important thing to take into account and to develop a business strategy is to  understand the local culture and how people are living. It can take time. For example, in Romania, it took us two years to perfectly understand Romanian culture and to  define after that, the proper business concepts to…add the  value proposition for our customers. And I think it’s essential to start from this point. Understanding the local culture, the way the people are living. To know  and to learn the local language where you are starting to develop your market. And being adaptable all the time. I think that the biggest mistake that retailers make is trying to replicate an existing model (already implemented in other countries) in a foreign country… Most of the time, if you do a copy-paste it is not working. You have to try all the time to be inventive, to be adaptable and on top of it open and agile in the way you’re trying to understand the market. If you do this, it doesn’t mean that you’re going to have a huge success at the beginning. It took us time to be successful in Romania. It’s not a short story, but as long as you demonstrate capacity to adapt and to understand the local needs and to propose the right add value on the right concept you optimize the chances of success on the market.

ADARA
It makes total sense. Any particularities or differences in Romanian culture that you wish to share?

FRÉDÉRIC
When you arrive in Romania, you have the feeling of being in an European country with a latin language, with latin behaviors … The culture is not very different from the western countries but when you go to visit the customer, that’s what we did in Romania, we visited 500 houses before opening the first store. We wanted to understand exactly how the people were living, how their houses looked, what projects and the budgets they had in mind, the level of prices, the kind of retailers we were approaching…And we discovered step by step that the culture is not far away in terms of values but at the same time, they don’t consume the same way. They don’t have the same budget, not the same purchasing power, they don’t have the same relationship with their homes, Romania is a country where the people are owning their houses 98% of the inhabitants locally are owners of a house. They can have a little studio or a big house, and they have a real appetite to modernize and to innovate in their homes and constantly changing…what is a great opportunity because it’s a market which is constantly open to innovation and new products. But it takes time to understand, to listen and to adapt locally… So as I mentioned before, one more time, no copy-paste, adept locally, being agile, being open and being adaptable to the local market.

ADARA
Super! Focusing on challenges, I imagine that another one that you have to face as a global retail brand implemented in different countries is adjusting to the legislation of each one of them. What complications do legal issues add when developing a business strategy for a new market?

FRÉDÉRIC
For global retales like us, Leroy Merlin, we are very “legal” people. We respect the laws and the legal context of each country where we launch our activities. So, no choices for this. We want to comply with all legal obligations existing in all the countries. The law in Romania is nor far away from what I knew from France and the global legal environment is not very different… The labor laws are very  similar to what we had in France but it’s an effort to do at the beginning when you launch your market. It’s very important to comply with the legal context to show the people your respect. I think that when you are a foreign retailer or…a foreign player you need to show respect… That is why I was saying that it is important to learn the language, to learn the laws, we have to adapt to the legal context because it’s a question of respect. As long as you respect the country where you are, the people you are working with and your customers, there is a moment when the people feel these points and they start to trust you. And I think at the end the equation is very  positive for each. It’s a win-win’s situation.

ADARA
Yeah, all about respect. Totally agree. So Frédéric, you have been in Romania for more than 8 years now. In an interview with the local publication Business Magazin, you shared that when you arrived in 2014 your goal was to go from a small company in the local market to developing a large-scale DIY business. How did that expansion happen?

FRÉDÉRIC
This is true. We had a huge ambition in this market. Even if we arrived in this  market a bit late, we arrived in 2009 in Romania, and when I arrived in 2014, the guy  that I replaced did a very good job understanding the market and trying to propose the best commercial concept to the Romanian Market.  The biggest problem we had was the problem of expansion. To find the critical size to be profitable, first, and to have a legitimity on the market and to have a significant market share. And this is what we made with a bit of chance because in deploying international business sometimes you need a bit of chance…

ADARA
Like in life.

FRÉDÉRIC
Yes, exactly. It can be applied to many many topics in current life. And the chance we had is that when I arrived, we had a great opportunity to buy a foreign retailer. It was an Austrian brand which had existed for more than 10 years in Romania. They had  some economic and financial difficulties but they had a good physical network. They had roughly 15 stores in the Romanian territory, with very good locations in different main cities of Romania and for us, it was a great opportunity to expand quickly and to transform the existing commercial concept we had, and to deploy it at national level. And this is what we did in a very simple way, because we were  a small company of 100 people integrating a company of 1,500 people. So, it was the little flea buying the big beast, but at the same time, we did it with our values and with our sense of customer.So we bought this company in 2014. It took us two years  and a half to transform all the networks of stores. We were duplicating the commercial  concept that we had initiated in Romania. And it has led us to now a company of 20 stores. So we have now become number two on the market. Last year, we delivered  a sales amount of 700 million euros, and most importantly, 3,000 leaders composing the team of Leroy Merlin Romania. And I think we started our journey and now we are on the way to develop a bigger company in the future. But it’s not the most important. The most important thing was the human  transformation that we tried to lead. With all the team, the local team, which was very, very enthusiastic. We’re passionate about this tremendous work. We were focused on the physical transformation, as  a first step, because we didn’t have enough stores to cover all our costs. And then  after that, we focused until now three years to the omnichannel transformations. We  need developed business online. We launched e-commerce. We launched a telephone platform with which customers have the possibility to order our products. And we are leading this journey which will help us to grow. We  still have a lot of potential. We have 20 stores only. So we have to keep it humble and  modest. We have the capacity to double the size of the company, but now the company  has been profitable for more than six years. Now, we are in a good way. We continue  to recruit, we have projects… So it’s dynamic. Environment is very dynamic and as long as it is like this in a  company you are passionate every day. Even if sometimes you have ups and downs. The dynamic is there. The team is there and for me is the most important thing to develop the business now.

ADARA
Yeah, it’s fascinating to see how even in such a larger scale company  as yours, you always have to keep…kind of an interpreter mindset, right?

FRÉDÉRIC
Absolutely. It’s essential and when you have an entrepreneur mindset,  you need to try things, and not all the things you try are necessarily going to be successful.  Sometimes you try and you fail and sometimes you try and you are very, very  successful. We made some tries during this period of the last…. I’ve been CEO of this  company for 9 years. Believe me, we tried so many things. Currently, in our stores, we have more than 100 tests, innovation tests, and I encourage my team to innovate. On top of those tests, there are things working very well, sometimes things which are not working at all… We have to have the courage to  say stop. To the test which is not working and to still go with the test that is working. So, it’s a school of humility. Because we win together and sometimes we lose together. But at the end of the day, the most essential part is that you keep the way and you always try to encourage your team to  try and develop this entrepreneurial spirit.

ADARA
And they need to feel safe to do it. So the  culture needs to be appropriate, right?

FRÉDÉRIC
Absolutely. Safety is very important…safety at work, for example. We are manipulating very small products and sometimes big products. So if they have to feel safe, they have to feel safe for those  customers… Safeties essential for us. I was talking about physical safety, of course financial safety…we have to be honest, they need to know that the company is continuing to grow, that the company still has some project that is profitable, that the company is adapted to the evolution of the policy of  salary and Romania…. We had a huge inflation over the last few years, so we had to adapt a lot. They need to see and to feel that the company is with them. I need them to deliver my business but they also need us to put the trust and the conditions of trust inside the company, and this is why I’m very attached with my team as a CEO. I’m not doing the business, my guys on the field are. I’m just trying to ensure the consistency of the strategy and the fact that all people are working all together to reach, not only the targets, but to enjoy the customer experience and to enjoy the team work because we’re spending a lot of time at work, so it’s good to enjoy it, to have fun. Most of it, to celebrate the victories all together.

ADARA
That sounds awesome. And Now, in 2023, you have reached 20 Big Boxes Format stores in the country. I imagine that they are huge stores, with many employees and several sections (painting, flooring, kitchens…) What sets these home improvement retail stores apart and what are the challenges in hiring, managing and scheduling its staff? Is it harder in this kind of store?

FRÉDÉRIC
It is both hard and simple at the same  time. As you mentioned, we have big stores, big boxes. So on average, our stores have a surface of more than 10,000 square meters. And we are employing between 100-200 people in each store. We have a very people-oriented culture  inside Leroy Merlin, so we are close to our people and we try to develop a management of  proximity with all our teams. We invested a lot of time in the training of our managers over the last 5 years to be close to them so they feel in trust. It means that there is one principle which  is at the arc of the company: I give you my trust. When I say that, it means that mistakes  are allowed. You have the right to make mistakes. We all make mistakes. As a CEO, I also make mistakes. It’s normal. Nobody can be perfect. And when you put those conditions on the table and you try to develop your people by training them, developing their skills (in products, in management, in customer relationships…), you try to optimize the loyalty of your people. So on the Romanian market managing people is not so complicated because people are hard  workers, they are involved and they are fast learners and they like to be taught and to be trained. So this is a great asset that we have. At the same time, the local population sometimes go abroad to find better financial conditions etc. And it’s not always easy to keep them. So we have to find the right solution to keep them on board to pay them in an appropriate way. It’s very simple to say, but difficult to do. To accept that the salaries have to be reviewed frequently to be in line with the  market. To give good employee satisfaction to your teams, it means that when  they go to work, you have to enjoy it. They have to like it because working at a DIY store is not so easy.  We have in our stores every day a traffic between 4 and 5,000 customers in each store.  So it’s a very demanding job and you need to do it with a lot of passion, whatever  your age, because we have very young guys in our stores, and we also have old people.

We have men, women living all together and serving our customers.  And the most important thing is to preserve the health, the safety and the  well-being of our people. It’s not perfect, not at all. We are not perfect and we are not a perfect company, but I think there is a sincere willingness from our side to care about our people. Do they feel comfortable? For the people in logistics, the area where they are living, we had to discuss yesterday in a meeting I had internally, we saw that some people are very cold in the external parts when they are preparing the orders for the customer. So we try to care about that and to improve the  working conditions for them all the time. I think it’s very, very important. So maintaining a great relationship, caring about the people, managing them properly and making them evolve. We call it a “culture of progress”. This is what we like, in Leroy Merlin we are never satisfied about the result. We always try to improve the process, the skills… It’s a combination of a lot of elements.  It’s a holistic approach and with this… Let’s say that it’s not easy to manage, but we try  to optimize our chances to make our people feel comfortable.

ADARA
Yeah, employees play a very important role in the overall retail experience but in your case it is even  more relevant, right? Because they have to know the products very well in order  to advise the customers and respond to their needs and very specific issues such as to what the right materials to build a piece of furniture, for example… The customers need to find this help easily and quickly. In fact, it has happened to me many times in other “Do it yourself” stores that I had a negative experience because I couldn’t find anyone to help me and I ended up deciding to leave the store since I didn’t have much time and in this this context the employees needs to feel very engaged and motivated in order to deliver the proper service to the  customer, right?

FRÉDÉRIC
Yes, absolutely. You are touching a very sensitive point. When you go to a DIY store, you buy products or services for your home and it’s a personal thing. Everybody has a home, whatever its condition, ist  revenues or purchasing power. And when you buy something for your home, you touch a personal aspect of your personality, of your history, of your past experiences. So to keep employees engaged and motivated It’s something very essential in our business. Like in many many other businesses. As I said before, the first element is to give them the right conditions to work. Do they work in a safe place? Do they feel good? Every morning, the traditional question that our managers ask to employees is “how do  you feel?”. Because everyone has his own history, personal experience… Maybe you had some problems at home, Maybe you have some in your personal life, with money, with your family…and this is very, very important as I said before to have this close relation with all our employees.

When I started at Leroy Merlin, I was a Sales Department Manager in a story in my integration here. It lasted more than one year. I was not an expert in DIY because my team knew the product better than me. The only thing that I was trying to know every morning was, in addition to understanding the business and the products, how my guys were feeling. It’s also linked with the business. Of course when you do that, you create a trusting environment for the people and the people, they’re ready to give you their best. all. They give you their energy, their  enthusiasm. Additionally there are other elements to keep people motivated, as I said before, you have to pay them in a proper way, to motivate them, we have a system of performance Premium and Performance Bonuses every three months, to give incentives to our people regarding their performance. We also ask our customers what they thought about the stores etc.  It’s very important to create all those conditions and after that, I think all the aspects of the strategy and so on, it’s a question of management. And management is an art of our company and probably made the success of Leroy Merlin in many countries because we shared the same culture at a corporate level, it deals with the values that we have. As I said, we are not perfect, but I think we are authentic, when we say things to the people, even if it’s a good thing or a feedback which requires progress or a negative feedback, we always try to see it in a sincere way and  with good willingness. And I think our people are feeling that. The biggest pride I have  here in Romania is not the sales. It’s not the number of customers. We are selling 14 million customers per year… Is the fact that now I have a big number of employees who have been in the company since the beginning. They have been here for more than 10 years. Makes sense. It means something. It means that the people are feeling that in this company they can grow, they can contribute, serve customers, be productive, bring their ideas… I think this is the global  ecosystem of motivation and self centered process, which is very helpful for our people.

ADARA
Awesome. It really does sound like a great place to bring your best self to work.

FRÉDÉRIC
Yes! And also very important as I said before, we win together or we  lose together which is very important in our company. We celebrate the success, the small victories. Yesterday, for example, we broke a record in… I don’t know construction materials and we shared a  cake together. We share a glass of juice or we share a coffee all together… It’s  very important… We are 3,000 people in the company managing so I don’t know all the people but this spirit has to be transmitted to everyone. all the people. When we do  that, you create good conditions, you create good humor.

ADARA
Sounds great, very fun. So Frédéric, doing our research, there is one point that has struck me during these years you have been leading Leroy Merlin Romania. I have read that from 2017-2018 you have started to implement omnichannel and digitalization strategies for the business. Can you tell us more about it?

FRÉDÉRIC
It has been a long journey. Actually, I arrived in 2014,  so we were focused at the beginning as I said before the physical transformation and to buy out the competitor and to create a real physical network. As you mentioned in 2017-2018, when we finished this process, we started our digitalization and our omnichannel journey. It took us time, this is not simple because  we are retailing a lot of products on average in our stores we have between 30-35,000 X. So it’s very important. The first two years it was very simple, it consisted just in publishing the products. Not selling them, but to provide the right information to our Internet customers. To explain to them that we were not selling online for the moment but that we were trying to provide them with the most complete information about our products. You have to know that from now on 70% of the purchases in stores are prepared on the Web. So people, especially during the covid period, got used  to going on the Internet and taking a lot of relevant information to buy some products for their home. So it’s very important to have a qualitative Internet site. This is what we were very attached to at the beginning and it was a clear choice not to sell online from 2017 to 2019. In 2019 we launched our first test on business online. So we started with a click and collect process into a couple of stores, but we took our time to provide the best customer experience for all our customers. In 2020, the Covid-19 arrived, and there was a short period in which we had to close our stores. At that moment, we accelerated our business online, to propose different kinds of solutions to our customers.

The first was the click and collect. The second was e-commerce, to order a  product and to be delivered at home. The third solution was a  solution orientated to professional customers. We created a telephonic platform in which the customers can order the products every day when they have to renovate the house or renovate an apartment or whatever and there is a supply chain service that prepares the order and delivers it on site. It has been a tremendous amount of work which has helped us to reach significant numbers in the digitization process. And now it’s close to representing nearly 10% of our business.

So it took us time, we had to make some technical choices, some content choices for our products and processes and to propose, and this is the trickiest part, the easiest  customer experience. Making an Internet site is not so difficult, but proposing a simple experience when the customer is online and is choosing his product… It’s much more complex. We made a lot of work and we still have a lot of work to do to simplify the customer experience…. For example, I am a customer and I Need something for my home.I need to find the product that fits my needs. And if I buy it, whether it is online, or in store, it has to be simple for me. And this is all the work we are still trying to do to improve their experience. People since the covid time, they are much more eager to purchase online.  This is a reality we have to face. At the same time, when they go to stores, they don’t have time to lose, they want it to be quick, especially on the Romanian market, people are not so patient, so they need to find the products very quickly in the stores. So for retailers like us, the most important thing is to have a content site, which  is very well equipped, and a real consistency between what the customers are seeing online and what they will experience in the store. So we had to create some bridges between the teams in the store and the team in our headquarters to optimize the customer experience.

ADARA
Yeah, it makes sense. Since we are talking about digitization, as a global retailer, how difficult is it to find the right tech partner?

FRÉDÉRIC
It’s not easy. It’s a difficult question because… finding tech partners is not complicated, but finding a partner who  will understand what you are searching for in your customer experience. It’s much more complicated. We had a tech partner which was really okay and I think he understood our level of maturity at the time. We were babies in 2017, and the guy had a strong experience to make a very simple site, and to lead it to the online business. After that, when we started to sell online and to develop our activities.. Today globally, the activity on the Internet represents more than two stores, so it’s huge for us. We had to change our tech partner to find another partner who understood our commercial strategy better. It’s not only a question of tech, It’s a question of commercial aspects and the way you want to do the business. How much satisfaction do you want to bring to your customers? Which facilities can you offer them? What are the different elements which will make you different in your market?

To answer your question, finding the right tech partner is to find a guy, who may not necessarily be the best in technology (of course the technology has to be good),but he is able to understand perfectly what you want to do with your customers from a commercial point of view.

ADARA
Totally. That’s major. You were introducing economic challenges that are coming.I bet it has been a difficult year for retailers and for you guys too. This year’s inflation has led to many shifts in the industry, for instance, from rising energy prices to changes in consumer behavior. From your perspective, what changes have you noticed in retail post-pandemic and how retailers can continue to grow despite the odds?

FRÉDÉRIC
This is true, what you mentioned had a true impact. The inflation, the worldwide inflation last year on our market was huge also because the level of inflation was around 17% on the local market, so it’s something for us to focus on, especially for our customers, because at the end…who is paying? The retailers, the customers, they are both paying the consequences of this inflation. Believe me, my purchasing team made a huge work last year because from our suppliers, we see a lot of pricing increase and so on… I would say that it was a complex situation. Fortunately, we managed to drive it in a safe way. We tried to protect the purchasing power of our customers, which was very  important. So…sometimes, somehow we renounce to keep our rate of margin in this inflation process. I mean we were receiving price increases in our purchasing prices and we were not mechanically transmitting the increase in the sale prices. Probably our customers felt that. The purchasing power was under tension, people lost money  because, not only DIY products increased, food products increased, energy  products increased and so on. And it was not an easy environment to tackle. So we were  very cautious to maintain a great level of accessibility, for all our range of  products. On top of it we also had our own private label brands which help us to cope with the needs of the customers with reasonable prices to attract more customers. And  to be honest 2022 hasn’t been a bad year for us. We finished the year in growth, double digit growth which is a bit encouraged by inflation because at the end we didn’t have any  other choice to increase also our prices, but at the same time we tried to do it in a  moderate way towards our customers and the customers saw it, because we have an everyday low price concept in Romania. We try to be always the cheapest on the market and as we saw this inflation problems last year, I said to my guys, “Guys, we need to keep our consistency in our strategy, to keep the same way we were acting before, proposing not only the best products on the market but also the best prices”.

So lots of changes that I have noticed but… I think that retailers can continue to grow despite the odds. I have no doubt about this. But one more time, to be customer-centric it’s very important, especially when you have some troubles from a geopolitical point of view worldwide. You always try to find the smartest solution to be productive, to optimize your internal costs and to be careful on your energy costs, for example, you care about things that you can decrease, to be  more responsible. And in this process, you create the right conditions to maintain the accessibility of your offer of products to your customers. And   customers don’t make mistakes, they trust you and they go back to you.  So you maintain the business in the same way…but to be honest it has been a  challenge and I think in for 2023 and unfortunately it would be still a change. 

ADARA
Yeah, absolutely. Yeah, these are times of change for retail. We have just discussed the current challenges. Now, let’s talk about the future. How do you keep a retail business successful and efficient in the long term?

FRÉDÉRIC
It’s a business case for students in a business school…  I would say that there are no magic tricks. I have some convictions about this to keep a retail business successful and efficient in the long term. The first thing is that as a retailer, you always have to keep being great on the basics. I mean, you should continue to invest in your store’s quality. To  invest in the quality of the products that you are displaying, on the merchandising  solution you are providing to the customers. To always have the right products at the right time and at the right price. I call it the basics. And you have to do the same on the Internet. Also the key of success in the long term for retailers would be based on innovation. If you don’t innovate, if you don’t launch new products or if you don’t innovate in the services that you can propose to your customers, in the long term, the chances that you will survive on the local market are very low. The last battle, that I would say it’s very important especially in this period, is to appear more and more responsible. 

We didn’t speak about this before, about the CSR part. But as long as you show to your customers that you are proposing responsible products, responsible solutions in a way that you show them, that you care about their health…specially in DIY because we are selling a lot of products for the home. I think those  elements are the key factor of success with which your business will be sustainable. And it’s not only words or a marketing speech. It must convey the facts in the products that you are selling to your customers. I will give you  an example. This year we will launch a kind of scoring for our products. We will make our suppliers participate and we will show on the displays in the stores and also on our Internet site. 

The score of each product in terms of energy saving in terms of  positivity. So this is very important because the customers need proofs all the time. They don’t, they don’t need a speech, they don’t have time for it. They just need proof.

ADARA
And more and more now…

FRÉDÉRIC
Exactly! Because we are in an open world. The information is accessible for everybody and we have to be sincere in the way we propose our offer and in the way we are speaking about the responsibility for the safety responsibility, for the quality of the products, for the way we are trying to manage our team diversity etc. There are small elements but when you are communicating them, I think that in the long term, especially with the new generations, there is a payoff which is very interesting and important for the retailers. 

ADARA
Yeah. Yeah, absolutely. Frédéric, you have been in the industry for 30 years. You know all the ins and outs. Tell us, how did you end up in retail, specially the DIY market, and what fascinates you most about this industry?

FRÉDÉRIC
It’s a very easy question. I love this industry because it’s a never-ending story.  You never get bored. Many people could say that about other industries…I don’t know, but it’s moving all the time and it’s moving very fast. I mean, DIY you are always changing the offer of products. For example, we are renewing roughly between 20%-25% our products proposed to the customers every year. So it’s changing all the time, we are innovating all the time. We are  opening new businesses, so it’s a mix of development: physical development, online  development, human development skills development, product development… You always have projects in this industry. I remember a quote from one of my former bosses a long time ago in my former professional experience. He said that in a company when you start to  eliminate and to kill all the projects, the company will die very soon. And I think  that in this DIY sector we are exactly in control of this. Sometimes we have too many projects and too many things to manage, but at the same time, it’s  passionating. And as I said at the beginning of our  discussion, passion is the arc of the company. Passion doesn’t mean  perfection, but it means changes, passion means a lot of new things that at the end of the day it’s a prominent learning process. Since I am in this industry, I am learning every day. And even with you here, with your questions, I’m learning and questioning myself. I think this is why I wake up every day in the morning with great pleasure when I go to work.  I really like what I do. I love the sector, it’s fascinating!  We are touching people’s homes so it’s very personal. Everybody has a home. You can be the richest man in the world or the poorest but you always have a roof or something to adapt in your house. And we are here to help all the people to build, to renovate and to decorate it. And this is fascinating for me. 

ADARA
I can sense in your voice…your passion is there. Definitely, that’s great. Retail is a world full of surprises and learning experiences. Before we approach the end of our conversation, I also wanted to ask you, as a CEO yourself, what do you think makes good leadership? You have  mentioned certain things before, but maybe you want to recap with some highlights. 

FRÉDÉRIC
Sure! There are no good receipts to make good leadership. I quoted different elements. I believe in proximity. I believe in empathy. And I think there is a very important aspect in good leadership. I had a very good boss a long time ago. He once said to me that as a CEO you have to answer two main questions. The first question is “Where do we go?” What is the direction of the boat? The second question is “How  do we go?” developing these commercial concepts, meeting our budget, CSR  or investing in research and development for our products…whatever. And I think that the quality of a good leadership is to be kind of a teacher. You have to be able to explain complexity in a simple way. Being able to explain very complicated situations to make it simple for the people who are doing the business. I’m not doing the business of Leroy Merlin Romania. 100% of the business of my company is made by my people. I’m just the one who is trying to drive the strategy in a sense, or in  another. The one who says “Okay, let’s focus on this or let’s go like this and the direction is this one”. I think a good leader is not necessarily a genius. Not at all. There are some guys that are amazing. I’m not  part of this category, not all. My only duty and my only responsibility as a good leader is to transmit my convictions, the sense where I want to go and how I want to go, and to make it in a very simple way. I believe in simplicity. Most of the companies in the history of the world, humanity, when you observe the businesses, When you see that some companies fail,  sometimes they are not understanding their customers, sometimes they are missing something on the market. But sometimes there is one common point, complexity. Nobody was understanding anything, not the customers or the people inside. As long as you are clear….For example when we define our objective, for the next year, we try to make a little  video, with my team of directors, to explain the strategy in a clear way to our people. It takes us a lot of time because we want to transmit to our people what we have in our conviction. So it’s complex.  We have to transmit this complexity in a simple way so that it can be understood by everybody.

ADARA
It’s great. Really inspiring.  Actually, I was taking some notes, myself here (Laughs).

FRÉDÉRIC
It’s not the course of management (Laughs).  Not at all. It’s the expression of personal conviction.

ADARA
I love it. And thank you so much for sharing all of that. That’s amazing. And to close our chat, a question we ask all our guests: how would Frédéric Lamy sum up his business philosophy?

FRÉDÉRIC
My business philosophy is very simple, it is based on two principles: being close to my customers and to my people. Being adaptable, open and agile all the time. When I was recruited by Leroy Merlin, the group CEO who recruited me said to me something that made a  sense you can’t imagine. He said to me: in our group, I have two principles, not three and four, just two. I want our customers to be treated every day as I would like to be treated as a customer. And I also want us to treat our people as I would like to be treated myself by my own boss. I don’t know if it’s a business philosophy, I don’t know if it’s something strange or whatever but I made these principles my own. If you apply them, first your professional life is a truly daily pleasure. You enjoy everyday, you have fun…. 

You are enjoying people because this is also life. Professional life is not something which has to be a hell. If it’s hell you have to quit, but as long as you are enthusiastic and you try to act like this and to be very truly sincere in the way you act. I think at the end of the day you have personal satisfaction because you create happiness around you. As a good leader, you have to make your people happy. It’s like a family. You have to make your family happy. Be the same at work. You have to make your guys happy and this is at my mother’s level.  I try to do it not in a perfect way, not every day but I try to do this with  my team. 

ADARA
That’s fantastic. Definitely, you have to have fun with everything that you do. That’s what happened here. For me at least. I have a lot of fun. Thank you very much for your time and your thoughtful answers Fréderic. I really, really  appreciate it. And I enjoyed it very much. 

FRÉDÉRIC
Thank you very much for your time also. Thank you for very nice and smart questions. It’s always helpful, for guys like me because we are always working and taking distance with smart questions like this… It’s also very interesting and I hope we had interesting discussions for your auditors today and I wish you a very great day ahead. 

ADARA
Thank you. And a big thank you to all those who listen and support us. We wish you a good start of the year. See you in the next episode.