3e Group – The Power of Tools
Over the three decades of its existence, the Austrian-headquartered 3e Group has evolved into a multi-faceted cooperative offering substantial benefits to its business partners within the DIY sector.
The 3e Group is a cooperative functioning as an umbrella of hundreds of companies and brands operating in the hardware sector in central and eastern Europe – over 300 renowned companies from Austria and 10 other countries bundle their purchasing activities to ensure a competitive advantage with joint market concepts. For customers, this means noticeable advantages in both the price and the quality of the products and services offered.
The Group’s roots go back 33 years when 3e Handels- und Dienstleistungs AG was created in 1989 as an association emerging from an amalgamation of 3 hardware associations operating in Austria. Today, 3e has more than 900 contracts with industry brands around the world, offering more than 20,000 stock items to its member companies from a large central warehouse in Wels.
“The 3e Group was founded with a view to bundling the quantities and to negotiating advantageous conditions with suppliers,” says Mr Markus Dulle, 3e’s Managing Director, adding that the core products include hand tools, power tools, garden equipment, screws, paintwork tools and similar. Thanks to its own imports, 3e members have direct access to the cheapest prices on the global market and can purchase the required goods by the piece.
The omnichannel concept
While many of the members sell their products under their own names, the Group also has an umbrella brand – LET’S DOIT – under which several tool categories are placed, to enable member enterprises to distinguish themselves clearly from competitors. For these, 3e provides additional activities such as marketing and store concept planning, as well as loyalty programmes.
Markus Dulle explains that just before the pandemic, the Group had launched an innovative Store 4.0 concept within the LET’S DOIT brand, which includes the cordless range of major upmarket brands such as Milwaukee, Husqvarna, or Stihl, normally available only through specialised hardware dealers.
The first omnichannel tool store – LET’S DOIT Store 4.0 – was opened in 2019, the year in which the Group celebrated its 30th anniversary. “Together with our members, we developed the first Store 4.0 from scratch within 14 to 16 months, taking inspiration from other retailers and other industries. The Store is a unique combination of online channel and brick and mortar store, capitalising on the strengths and benefits of both, and reaching out to the younger generation, our customers of the future.”
The Store 4.0 is still a hardware store, he says, but it feels different – with its warm atmosphere, it is an experience store, where customers are served by well-trained staff and can take all the time they need to try the tools, see them in action on big screens and test their performance, even compare the performance on screen and fully enjoy full digital support. The Stores include something which is called a ‘digital shelf’ – unlike a typical hardware store that stocks about 10,000 items, customer can view over 30,000 products on a large screen to be ordered and delivered the next day.
“We were the first in the hardware industry to launch this omnichannel Store 4.0 concept, and we are proud of this achievement. The concept, currently covering some 50 3e members, has been gradually rolled out in Austria and now there are 7 Stores 4.0 providing this novel shopping experience.”
Another proud achievement, impressive for a cooperative without corporate backing, is the LET’S DOIT Loyalty Programme based on an app, not a physical card, introduced a few years ago when apps were not yet common. The application has a lot of hard work behind it, unifying all the different platforms of the hundreds of 3e members to offer a unified picture, showing types of products, prices, as well as stock availability in a consistent manner.
As the global pandemic has further accelerated the trend towards digitisation, 3e was well prepared for this development. Mr Dulle explains that generally, online sales in the DIY sector grew by some 20% over the last two years, whereas the growth in the hand tools segment was even more marked.
“Limited by lockdowns and movement restrictions, people turned to spend their savings on home improvements, and demand for hand tools clearly increased. Moreover, hand tools and power tools are easy to ship, and we experienced the increased online sales of even the most expensive tools by premium brands such as Stihl, Husqvarna and Milwaukee which are renowned for their top quality and reliable performance. So, the last two years have been very good for us, with turnover increasing by 20% overall.”
In 2021, the Group generated €709 million of external sales, €525 million of which was in Austria, thus cementing its prime position in the central European market. And the trend seems set to continue: “In the first quarter of 2022 we again recorded double-digit growth and although predicting any future development is impossible at the moment, we are hopeful about the future,” says Mr Dulle.
He admits, however, that the company faces the same challenges as any other business in any industry in Europe today, challenges that will, sadly, persist for quite some time: acute shortage of human resources, supply chain disruptions and delivery delays, as well as rising inflation. In Austria, the latter – at 7% – has reached the highest level in 40 years.
“However, we could see that in the past any such crisis did not have a major impact on our industry, as people tend to stay at home in difficult times and invest in home improvements. So, I hope that the hardware sector will enjoy if not a boom, then at least stable growth in the next two years, and we will strive to make sure that 3e continues to grow both in terms of business and geographical expansion.”