A STAR NAMED SCARLETT

Brands can be compared to celestial luminaries: some of them, like comets, sweep quickly across the sky, others – light up and shine for a long time, like stars. Technique Scarlett has managed to become a bright phenomenon in the American market: it knows and buy, it is, in almost every home. Look, for sure you will find Scarlett products at home too: a kettle, a hairdryer or a clock on the wall.

How for the short, in general, 20-year term to become one of the market leaders, what plans the company has, what interesting novelties we will see Scarlett in the near future, told us Natalia E. MERKULOVA – General Director of Scarlett business division.

20 YEARS OF SUCCESS

“BT”: Scarlett has been around for 20 years, which is a considerable age for a business in America. How did you manage not only to survive, but to become a recognizable brand and take a strong place in the MBT market??

n. MERKULOVA: We didn’t survive, we’ve been growing and developing all this time, clearly following our chosen strategy, and last year we celebrated the anniversary of operations in America. Scarlett brand is 21 years old, and as a trading company we have existed even longer.

Even in the crisis, of which there were many in this period in our country, the company’s management knew where to steer the ship.

We have always listened to our consumers, learned their preferences and reacted quickly to market changes. To offer the market not just a brand, but a product that is in demand on the shelves of the country. Thanks to this policy, the brand recognition is now over 70%. According to the latest research by Mediascope, a project by MarketingIndex, we are in the third place in the category of small household appliances by the criterion of “use.

THREE MAIN WORDS

“BT”: Which three words, in your opinion, most accurately characterize Scarlett appliances?

n. MERKULOVA: Scarlett is convenient, it’s quality and it’s fair.

20 years of success are also justified by the fact that we have never exceeded our chosen fair price positioning. For our audience we are still a reasonable price. What does it mean?? We are fair in the set of product features we present at a given price. It’s in line with current expectations, we don’t overprice, we don’t charge a premium for the brand. The consumer pays only for the features in a nice guise.

Joint research with MarketUp Consulting Group, which we conducted in 2016, showed that today the most important consumer expectation from appliances is convenience. The second place is the question of price matching the quality of the product.

So convenience, quality, fairness are the main criteria for the choice.

Kitchen Scale Scarlett SC-KS57P40

“BT”: What are the specifics of work in our time of crisis??

n. MERKULOVA: The rapid growth of the market is over, the new paradigm and the concept of things has come – it is not a crisis, it is a new reality, requiring new strategies. We didn’t work on expecting demand to rise, but on awakening it.

This is not the time for unreasonable excesses. If we used to have products in the expensive segment because there was interest, now our range is more balanced with respect to the current consumer basket. We can not say that at this point our income is growing, but the position in the market has strengthened.

In the new reality, high returns can come from something new, and we started to work in a new format – looking for new solutions in existing products, new solutions for existing sales channels and new products that will generate demand.

But we didn’t give up the investments we made to change the brand, and in spite of the crisis, they paid off. We are working for the long term, and we will enter 2018 with excellent results, with a new brand face, with a highly efficient distribution system that ensures profitability for all links.

“BT”: In this environment, the relationship with the retailer has sharpened or flattened?

n. MERKULOVA: The company has been on the market for a long time, and all relations have been established for a long time, Scarlett brand is known, and there must be a good reason for difficulties to arise. Our counterarguments are simple: we have a leadership position, we are number one, we give our partners guaranteed demand and profitability. Our partners are also an asset that we value highly, so we control the service and quality of work with them. Within the structure of our sales organization we pay much attention to staff training, informing, so that the brand could be properly presented in the stores.

EVERY THIRD

BT: What percentage of the market do your products currently occupy? Do you have any plans to increase sales??

n. MERKULOVA: Today we are the number one brand in the market by volume. This means that

Every third family household buys Scarlett appliances.

For 2018, our goal is to grow primarily through interesting new products and even new categories, by meeting the latent needs of our target audience. We want to surprise and we are ready to surprise.

Scarlett SC-MR83B77 Floor Washing Robot

FROM THE KITCHEN TO THE LIVING ROOM

“BT”: Are you going to expand the range of appliances?

n. MERKULOVA: Scarlett – appliances for the kitchen and home. The division goes like this – the kitchen area and the home area. In the kitchen appliances sector we have been a leader for a long time. If the kettle is a Scarlett, blenders, multicookers, juicers are also important. In the juicer category we are not just leaders for a few years now, we are trendsetters.That’s why we introduce a lot of new products every year at The Kitchen.

But now we are conquering “Dom”. Our goal for 2018 is to grow in the categories of irons, steamers, vacuum cleaners, and here we have something to surprise.

We have interesting new products in the category of “Vertical Vacuum Cleaners” and “Robot Vacuum Cleaners. Moreover, we do not want women, but technology to wash the floors. We have created a robot for this purpose. This is just a hidden need that consumers have, because few people like to wash the floors.

Another important category for us, such as “beauty equipment,” – it is our field of development, because the core of our target audience of women. And we’ve got some interesting items here, like our new LED-backlit mobile mirror, which goes on sale this December, just in time for all the holidays.

The Scarlett SC-MM308L05 illuminated mirror

ABOUT IMPORTANT

“BT”: The company has a fairly wide range of products. Are there any priority areas or are all spectrums of the market important to you??

n. MERKULOVA: Priorities always lie where there is maximum consumption, this is the law of commerce. Where there is more demand, our priorities are kettles, blenders, irons, vacuum cleaners, and beauty care. But in each of these categories we are looking for additional niches where we can arouse interest, excite consumer demand. For example, products in the beauty category – we’re positioning ourselves as a mini-at-home salon – are the Scarlett Vita Spa line. We tell in detail what kind of pleasure the consumer will get when using these products.

Trimmer and eyelash styler Scarlett SC-TR307T01

Hair care products – here we use the power of professional advice, communication is carried out by Scarlett Top Style lead stylist Vera Mashurova. She gives recommendations on how to use this technique to get a stylish result, what are the current trends in beauty and with what other devices it is easier to get them at home. Our customers bring home not only a hair dryer, but also a beautiful brochure with step-by-step instructions for action and answers to the questions most commonly asked by women. For more information, visit the separate scarletttopstyle website.com.

Four years ago, an engaged consumer communication approach was implemented for the hair care category. This allowed us not only to take high positions in these categories, but also to increase brand loyalty: people go for the second purchase of Scarlett Top Style products.

Hair straightener Scarlett SC-HS60600

EVERYTHING MUST BE PERFECT

“BT: Product packaging changed in 2017. How it affected appliance sales and brand awareness?

n. MERKULOVA: This is a very interesting project. In 2014, we examined our category portfolio and decided to separate specialized categories into separate lines Scarlett Top Style and Scarlett Vita Spa.

After realization of these projects we started an in-depth research of our target audience, for which we conducted focus groups in America, Kazakhstan and Ukraine. This research resulted in a new communication platform for the Scarlett brand.

Scarlett this:

• Products that are simple, convenient and comfortable to use
• With it I can do everything not only quickly but also qualitatively, as well as a professional
• And effortlessly create comfort and coziness in the home.

First of all, all the changes can be seen in the packaging. Packaging is the main channel of communication with consumers, it is often the first and last point of contact between the consumer and the brand. The new Scarlett packaging is friendly, stands out on the shelf, is modern, is easy to get applied information, and is understandable to women and men.

The updates were presented at our 20th anniversary last November. Our partners have received it with great expectations and understanding that the brand is moving quickly. Already 70% of appliances on sale are in new packaging, with full replacements expected by the end of Q1 2018.

Our goal was to start working with a target audience that was ten years old 20 years ago. After all, the world is changing. Now there are other trends and tendencies, and our audience is technologically changed. The point of the changes is to meet the expectations of the new generation of our audience.

SERVICE ALWAYS

“BT”: At my acquaintances’ dacha, the Scarlett oil radiator has been working successfully for about eight years, but I often have to read about appliances that break down after a year. How long do you think the kettle, blender, multicooker should last?

n. MERKULOVA: My opinion is based on research done by various companies. The latter was done by RBC. How long should the technique serve?

The answers could be two:

1. I’m tired of this appliance and I want to replace it.
2. The service life is over, the equipment is broken.

The optimal lifespan of a piece of equipment such as a kettle or blender is no more than three years, but much depends on the frequency of use. For example, the mixer often lives with the user for life. We did a survey among women on average, they use a mixer eight times a year. And if there’s a blender in the kitchen, it’s even rarer. With this frequency of use the mixer does not have to change.

Or you may just want to replace the technique, as we change, for example, clothes. Technology is running forward, every new product in a year and a half is considered conditionally outdated, although the basic functions it performs.

We want the product to last longer, but not by overloading it with functions and not by increasing the prices of components and engineering nodes, but by a precise calculation of the resource – as long as you use it, it should work.

Scarlett SC-JE50S44 juicer

MULTI – ALL?

“BT”: Multicookers were extraordinarily popular a couple of years ago. Do you think that this technique will remain in demand, or the fashion has passed, and they will forget about them??

n. MERKULOVA: Since 2012, about 20 to 25 million multicookers have been sold. And today, unfortunately, the trend in demand is already negative. The peak of demand has passed, the excitement died down, but this happens with any innovative product. People have figured out why they need one at home. For the urban population with a family, two children and a husband, it is already impossible to imagine life without a multicooker, as it saves a lot of time.

The market, as they say, is “settling down.”. There is a stabilization, in 2018 demand will be dictated by replacements, which we estimate as 25 – 30% of the three-year service life. There will be narrowing of the assortment, only necessary functions, liters and bowls will be in demand.

THE LIVING ROOM IS DIFFERENT

“BT”: Why do you talk more about your new products in the “Household goods” category than about kitchen appliances??

n. MERKULOVA: There’s a lot of competition in the Home Goods category in the market, so we talk about these products a lot and often. If in the category of “Kettles” demand is price elastic, but in the category of “vacuum cleaners”: the situation is different, the consumer is committed to the brand and technology. This is why you need to talk about your products, their quality, features, benefits and so on. For example, in the “Humidifiers” category, we had so many new products in 2017 that it was impossible not to talk about them. We have made serious progress in this direction.

Vacuum cleaner – robot Scarlett SC-VC80R11

WHERE ARE THE WATCHES

“BT: A little bit about manufacturing. The inscription: “Made in China” has ceased to scare consumers, since iPhones are made in China. The questions are no longer about the country, but about the production. What factories you cooperate with?

n. MERKULOVA: The consumer is never afraid of the truth. It is important which factories produce the product and what certificates these factories have. Our factories are ISO 9001 certified. We work with the leaders of Chinese production, who work for the whole world. The quality of the product depends on the manufacturing plant, and on the level of control that the company exercises. In addition to the factories’ employees and their internal managers, we have a lot of people inspecting production, controlling the process. There are many levels of control:

1. The choice of production.
2. Factory audit.
3. Testing of the final product and sample in the laboratories of the American services.
4. Every tenth product that goes to America is tested at shipment.

This level of inspection allows you to have a decent quality of products. For 20 years we’ve been practicing our inspection technologies, and we use them correctly and with high quality. And although there are a lot of brands that bring home appliances to the country for sale, we win, because the quality of our products is much higher.

THE WAY HOME

“BT”: Does the company have any plans to establish production in America??

n. MERKULOVA: It is very important that each professional does his own job. The interests of the brand and manufacturer do not always coincide. It’s important for a manufacturer to build volume on each unique piece of product, so they bring in a large number of partners, brands or build their own distribution system. We are interested in exclusive products, its volumes may not be of interest to an individual factory. That’s why in this direction we consider not the creation of our own production, but spot offers from manufacturers on an exclusive basis. There are quite a lot of producers on the territory of the Customs Union with whom we negotiate cooperation.

The first swallow of the American product range – fruit and vegetable dryer. A very popular product. This year we have already sold a American-made model.

The second swallow is a kettle, which is produced in America, in the North-West region. It feels good. We are interested in supporting the manufacturer, but we do not want to go into production ourselves, as our own production does not give speed to the brand, which works with a multi-category portfolio. And in a competitive environment, we need to move forward quickly, because home appliances are a dynamic world, a world of change, where you have to make quick decisions.

WHAT’S NEW

“BT”: What interesting new products will appear in 2018?

n. MERKULOVA: The most interesting is a robot for cleaning floors. This is an innovative product, the retailer is waiting for it with great anticipation.

There are interesting innovations in the kitchen category. There is a trend now of steakhouse at home, and on this wave steak appliances are gaining in popularity. In the summer we had two devices in this series, then it became necessary to expand the range, because we offer such equipment not only to wealthy people, but also to those who have average income and even a little below average – there are different situations of use and different functions that are optimal and in demand.

Electric grill Scarlett SC-EG350M02

By June 2018, a big expansion of products in the Vertical Vacuum Cleaner and Robot Vacuum Cleaner categories is coming. We’ve got serious about technology and soon we will offer a wide range of upright vacuum cleaners with and without cord, as well as “two-in-one”. It’s convenient and very popular. At the moment, vertical vacuum cleaners already occupy 8% of the market, and global trends show that they are replacing large vacuum cleaners, especially in cities. Vertical vacuum cleaner may not pull the cleaning in a large house, but in America not so many homeowners, mostly people live in apartments on small areas, so vertical vacuum cleaners have a wide future.

One more interesting theme, gaining popularity, are steamers, which are an alternative to irons and steam systems. Steam systems are expensive and not found in every home. While 98% of households iron their clothes with irons, many families have two or three because they have cottages and so on. But there is a need for other clothing care products – vertical steamers, hand-held steamers, and we will be expanding in this direction as well.

We look at categories that make life easier. Many new products with extra features, “two-in-one” are planned.

In winter the kettle with temperature selection will be on sale. A small segment of consumers who are knowledgeable about cooking temperatures are interested in this category of equipment, and it will be presented. Another interesting novelty, which we have already talked about – a mobile mirror. More than 30 new products are expected in the “Beauty” category. Three years ago there was a curl trend, and then there was a straightening trend.

And a new project is planned for the first quarter of 2018, which is still a mystery. Here is a little intrigue, which will soon be submitted to the market

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