Interview with Bogdan Łukasik, CEO at Modern Expo.
The past year has set many challenges to Modern Expo… How could you sum up the year of 2022, were there any successes in spite of difficulties?
In this context, I think we should go back to the roots. To something people sometimes call the spirit of the company. I would not like it to sound like a cliché but Modern Expo is a very nonstandard organization, for at least two reasons. First, each problem we encounter is relatively quickly transformed into a market opportunity. Secondly, we are helped in this regard by a unique organizational culture. In case of ME, this is not just about pictures and slogans. For many years, we have been putting great emphasis on this component, and it is paying off today. We follow specific, transparent principles and values. The past year must have been very difficult for everyone, or indeed traumatic. To us in particular, as we are a Polish-Ukrainian enterprise. In the human aspect, it is incomparable with the previous ones. From the business viewpoint, however, this is just another stage of our transformation. In one fell swoop, both the Russian market and the Ukrainian one were lost to us, so we had to try to acquire new areas quickly. And, of course, we made it. The case was similar with the COVID-19 pandemic, and there had been other important turning points before that. We have been present on the retail trade market for almost 30 years and we are really not easily surprised.
What specifically is the secret to your success?
Success is a dangerous word. A lot of things depend on the viewpoint. Modern Expo is an organization with hundreds of millions of euros of revenue, hiring more than 2,500 employees, with a very good profitability. Is it success? Or it is just due to the fact we are a group that includes such entities as Mint, designing and implementing innovative SMART systems, or Squares, specialized in designing retail spaces and creation of new store concepts? Such a development of competences may be deemed an important achievement, just as the fact that we sell to several dozen countries and occupy the dominant position in many areas of shopfitting. To me, success has a slightly different meaning. It is manifested by the satisfaction of our customers and the fact we have been cooperating with many of them for years. Here, I will point out not only the largest retail chains, such as Żabka or Carrefour, but also manufacturers of the FMCG sector, for whom we have an immensely interesting proposal from the area of POS. I cannot omit Allegro, to whom we provide parcel terminals. This final case might be the best illustration to my definition of the success of Modern Expo. This project is partly a result of the pandemic and the enormous growth of e-commerce. To Modern Expo, this was a real test of flexibility and of the skill of quick acquisition of new competencies, not just in the context of design of a new product, completely different from the previous ones, but, above all, in the area of services accompanying the network building. Today, I can boldly say this contract opened up completely new opportunities that we are currently developing; an increasingly broader package of services for retail trade. We call it “providing peace and calm”, as we are indeed currently able to generate value for our customers of a completely different nature. And this is a real success.
What services do you offer to foreign markets? Do the offers differ between countries?
Of course, every country has its own retail customs and our flexibility is an invaluable asset in this case. Even such seemingly homogenous markets as the German and Austrian ones differ in terms of consumer habits, the level of technological advancement, or the general approach to retail space. But I think this is a good opportunity to pay attention to the general trends, powerfully entering worldwide and lastingly reorganizing the trade, regardless of the country or continent. For instance, this is the case with development of convenience stores. Please note that such establishments had been just an addition to the market as late as several years ago. Today, they comprise a great consumer laboratory of enormous importance. These points are a place of all-around testing of customers and search for an optimal formula of the so-called third place – a fixed point of a day, apart from work and home. This is an extremely significant phenomenon, undergoing changes all the time. Thanks to many years’ cooperation with Żabka, Modern Expo has a lot of experience in this regard. We just understand this store format better than others. How do I prove it? Just last year, we have introduced Conveniq to the market. This is a new chapter in the segment of vending machines, or rather an automatized convenience format; a modular system based on its own application, including, among other things, a refrigeration device, a vending module, a coffee machine, a parcel terminal, and a hot snack vending module. Apart from the mentioned functions, the module also serves as a perfect advertising space with full measurement of consumer reach efficiency. From the estimated USD 134 billion in 2020, the global market of vending devices will grow to USD 146 billion by 2027. Micro markets will play a decisive role in this growth. More than 30,000 micro markets operate worldwide today, generating a turnover of more than USD 7 billion. Industry analysts estimate that this number would double over the next 5 years. There is no turning back from that. And this is what I consider our success as well – the ability to predict changes and to adapt the product offer, and recently also the service offer, to the new circumstances.
What are the plans of Modern Expo for 2023? Will new innovative solutions appear in the offer?
This question is very topical, as the Euroshop in Dusseldorf will start in just over a month. This is a feast for the retail trade sector and a great fair of new products and innovations. By the way, I invite you to our stand – hall 11/A04. I can promise that, every three years, we will surprise you, in terms of both the products and the entourage. In this edition, we will appear under the slogan “spring is coming”. In every aspect. Therefore, I do not want to reveal the details, but this question can and possibly should be treated more broadly. Innovation, or a different way to deliver values, better than the previous one, is not just about goods and services. Personally, I am a great fan of management, of different methods and tools, and I have never hesitated to apply them in the company. Today, Modern Expo is a real expert, e.g. in the area of project management, with full IT support. This is another unique competence valued so much by our customers. Remodelling projects are very complex processes, with lots of objectives, milestones and potential hazards. It is very easy to get lost in all of it and, consequently, to lose the appropriate pace and unexpectedly increase the costs of the investment. We are free of that. Why do I mention it? Another value ME adheres to is courage and full acceptance of changes. Therefore, today we have reached quite an advanced stage of thinking about new solutions in the area of business models and creation of models of cooperation between a shopfitter which Modern Expo still remains, a trade chain, and a manufacturer, in particular from the FMCG sector. This is an unbelievable treasure trove of ideas which can radically change the appearance of the retail trade; a fantastic challenge and inspiration for constant development of our offer. What about 2023 itself? If we assume the months to come will bring uncertainty, confusion and economic downturn – and much suggests they will – this will be grist to the mill to those who have done their homework beforehand. They have a stable business model and durable competitive advantage. For such entities, this will be an unquestionable opportunity for substantial improvement of their market position. I see Modern Expo in this group. This may sound a bit insolent, but, to reference the first question, crises do us a favour. I do not want to say we like them, but in moments like these, we can make the difference and perform another transformation. Our history is the best proof.
What is the current vision of a future store according to Modern Expo?
On the one hand, reading tea leaves is not necessarily my strong suit. On the other hand, hundreds of experts worldwide have already answered such a question, so it will be enough to browse the Internet. I will not try to say anything original, but I will point out one aspect. When the COVID pandemic broke out in 2020, a week after the end of the previous edition of Euroshop, everybody claimed as one that consumer habits regarding disinfection will change for good. And? Nothing like that has happened. The change has been marginal. This only proves one has to be very cautious when predicting the future. Nevertheless, two aspects will play a substantial role, even though their development has been inhibited by the virus to an extent. The first one is intensification of shopping experiences. This is just a civilization change. As consumers, we wish to experience the shopping moment, to turn on emotions and look for customization. This gives one a sense of increased value of the entire process and results from simple vanity. The world, and the Western countries in particular, keep getting richer all the time, and this affects the will to receive new stimuli and to collect experiences. Abraham Maslow’s theory is still valid, and the time we spend shopping is becoming increasingly important. Here, I mean both traditional trade and e-commerce where everything happens much faster. The other issue is automatization, on both sides. Customers will adapt better to technological changes, while from the viewpoint of trade chains, this is an ordinary compulsion, the best road to business optimization. I will add with no false modesty that Modern Expo is very well prepared in this area as well.
Thank you for the interview.