5 Minutes With Ulf Timmermann, CEO, Reichelt

Reichelt may be a well-established electronics retailer over in Germany, but since launching the in the UK two years ago it has already started to make waves. We caught up with chief executive Ulf Timmermann to find out more.

Reichelt CEO

Tell us about the Reichelt story.

Reichelt was founded in May 1969 by Angelika Reichelt and her husband. Its first item for sale was an antenna amplifier. It started out a classic living-room business and didn’t establish its first premises until the early 1980s. Initially, Reichelt’s range was limited to electronic components which it sold through its own catalogue.

The biggest growth for Reichelt happened in 1996 when the business moved to Sande. Then, by May 2005, Reichelt developed the first automated sorting, packaging and shipping logistic systems.

In 2010, Angelika Reichelt retired, selling the company to Daetwyler Holding AG, a Switzerland-based holding company and supplier, and distributor of technical and electronic components. I became CEO later that year.

Since then I’ve seen Reichelt go from strength to strength, launching websites for the Austrian and Dutch markets in 2011, and increasing staff numbers to 220. At the start of 2016 we expanded our services to Switzerland and the UK – our first location outside of mainland Europe. We have started successful businesses in over 100 countries.

In the same year the company’s portfolio grew from 10,000 to 100,000 products, and from 60 to today’s 260 employees.

Why did you launch in the UK in 2016?

We were undergoing a European expansion and the UK market presents a wealth of opportunity. We saw a chance to emulate the success of prominent German retail companies, Lidl and Aldi, and bring our competitive pricing and high stock availability to UK electronics customers. I believed we had a strong offering versus our competitors.

Ours is a personality-driven company, one that always delivers on its promises and the British public have responded to this. The “makers movement” is continuing to grow in the UK and we are able to serve their needs, as well as businesses’ at competitive prices and high quality.

What’s in store for Reichelt in 2018?

For our business, we’ve taken the approach of ignoring the high street altogether in the UK and focus purely on our ecommerce offering. This makes our 100,000 product portfolio available to everyone with the internet rather than limiting ourselves to customers in store.

Combined with our high stock, low price approach, it’s a model that’s proving successful across Europe. We are still committed to growing the brand and presence in the UK in this way, offering British makers, tradespeople and tech enthusiasts products at affordable prices.

In light of the recent collapse of Maplin, what are your thoughts on the state of electronics retail in the UK?

The consumer electronics industry is fiercely competitive – it was worth €17,776 million in 2017, so there is a clear demand for electronics tools and accessories. Despite the bad news for Maplin, make no mistake that the UK is still a market full of opportunity for retailers who focus on doing more of what they already do well.

I believe we’ve succeeded online due to our robust logistics and processes. We also take an “in-house first” approach to all aspects of the business, which is unusual compared to other companies of our size who outsource a lot more. From writing our own ERP software, setting up our own warehouses to managing all of our call centres, we like to do as much as possible ourselves and we have the skillset to do so. This means we keep our overhead costs extremely low.

By being purely online, we don’t have retail space leases to pay or any of the associated costs. Whilst I do think there is a place for high street stores, it doesn’t quite work for our business model.

How is Reichelt addressing some of the challenges facing the retail industry as a whole?

For us it’s not just a case of online versus offline retail or even simply having an online presence. Retailers have to go back to basics to focus on doing what they do well even better, and delivering on their brand promises.

In our case, the important thing is to make it clear which products are new in online every month, so customers can navigate straight to the latest technology for their needs. Such a large product range and wide audience means the online offering has to be robust and customers should be able to easily make decisions out of a lot of choice. We look beyond the typical brand choices available. If customers want, for instance, a new conferencing system, yes we offer typical brands such as Logitech, but we also offer top European brands like Konftel – and every single one has been vetted for quality before being added to our range, meaning our customers have reassurance and peace of mind.

What would you say is the biggest risk for the UK retail sector, given the current climate?

In the case of a “soft exit”, the UK will be given a similar status to Switzerland and Norway, which have trade agreements with the EU. The advantage from a British perspective would be that there would be no tariffs. However, there would be the problem of so called “non-tariff barriers” to trade. These are rules on the labelling of products or environmental standards, for example, that would make goods more expensive.

In an unfavourable case (no trade agreement), Britain would lose privileges and tariffs, causing other trade barriers to arise.

Describe your role and responsibilities as chief executive of Reichelt.

As chief executive, it’s important for me to keep a cool head in stressful situations and consider things from a neutral point of view. Then I can make decisions that contribute to the overall success of the company, create and define strategies to achieve our goals and lead business development and growth.

My role also means I have to balance acting like a friend for employees while being their supervisor at the same time who is responsible for the company success. Finding the balance between Reichelt’s values is important too.

It’s my job to create a work environment where employees feel comfortable and valued so that they are motivated, as well as leading them in the right direction but giving them enough freedom in their work so they don’t feel controlled.

I lead by example and live the “hands-on” mentality of our brand and encourage others to do the same.

Tell us a bit about yourself and your background before Reichelt.

I joined the navy straight out of school in 1979 and received a thorough education in electronics and engineering. After various stints, I joined Reichelt in 1986.

I have a master degree in communications engineering as well as electronic engineering and I am appointed as an instructor by the Chamber of Commerce and Industry, so joining a company like Reichelt seemed like a natural follow on.

I spent more than 30 years at Reichelt – I joined in July 1986 as a shop floor manager when there were just 20 other employees.

I eventually became Head of Electronics prior to the retirement of founder, Angelika Reichelt. When the company was bought by Daetwyler Holding AG in 2010, I was then appointed chief executive.

What got you into retail in the first place?

I joined retail by accident – when I finished my education I had to keep myself busy until my final exam so I started my first job at Reichelt and I never left.

Reichelt is a perfect mix for me in terms of high level logistics, software coding and product sales.

How has your previous experience aided your current job?

Life in the navy provided me with a wide technical knowledge base and the ability to improvise whenever it’s needed, which I have taken into my business life.

Having started at the bottom and worked my way up through the company, I have a thorough view and understanding of all aspects of the business. I, along with everyone else at reichelt, lives and breathes the brand.

What is the most challenging aspect of your job?

My personal challenge is finding the right balance between being chief executive, engaging with my employees and being a member of the technical division board. All require time and dedication but I thoroughly enjoy all three roles.

And the most rewarding?

The best thing about my job is the variety of tasks, from local to international business, to high level technology and access to a worldwide network within Datwyler Group. I enjoy it all.

What advice would you give someone who is considering embarking on a career in retail?

If you want to be successful in retail you have to have the passion for it and have sales DNA in your blood.

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