Head of Extreme Digital: Our turnover can be up to 20-40 percent higher than previously expected

English2020. jún 1.Növekedés.hu

By the fourth week of the coronavirus emergency, Extreme Digital have already delivered as many packages from their warehouses as they do during the Christmas season, Balázs Várkonyi, the company's founding CEO, told növekedés.hu. Laptops sell like hot cakes and there has been a huge increase in online payment.

How has coronavirus affected traffic at Extreme Digital?

The number of online orders has been steadily high since the end of the first week after the introduction of the coronavirus emergencyone and a half times as many orders were received by Extreme Digital as the same time last year.

By the fourth week of the emergency, the company’s warehouses have delivered roughly the same number of packages as they normally do during the Christmas season, although the basket value is lower for understandable reasons: people now buy essential products rather than gifts.

The largest number of products were household items, primarily detergents, but computer assets (mainly laptops, desktops, monitors, wifi devices) came second even in the days before Easter. Two and a half times as many IT devices were sold as the same time last year. Since the appearance of coronavirus in Hungary, the turnover has increased in virtually all major product categories, with the exception of photo devices, which are of little use to the average person in home quarantine.

The proportion of orders paid for online has reached 55 percent, which had never been so high, including Black Friday or the Christmas shopping season.

How did the daily operation change because of the crisis?

In an ordinary spring period, 60 percent of purchases come from the webstore and 40 percent from offline stores. Currently this rate has changed to 75 percent from online and 25 percent offline.

What steps had to be taken because of the virus?

In order to serve online orders and ensure safe shopping in the stores, a number of safety measures had to be introduced, which we share on a separate subpage on our website.

We do cleaning four times a day at all our sites and warehouses; we have placed hand sanitizers in common areas and we draw the attention of our staff to their use. In our warehouses and delivery points, our colleagues are working in protective equipment and under strict health inspections, and we are protecting goods, packages and equipment from germs with a special daily disinfection procedure performed by the staff of a company that specializes in hospital disinfection. Incidentally, offline shopping is also safe at Extreme Digital: admissions and ticketing are assisted by employees equipped with protective equipment. 

What impact did the pandemic have on retail in Hungary in general? How do you see the future?

As far as I know, our competitors have gone through a similar change between online and offline purchases. Although the number of orders is close to that in the Christmas season, we can also see that Hungarian customers are trying to be more conscious about their expenses in the current situation, so, in case of high value products, such as televisions and freezers e.g., they are now choosing more basic models.

The increased traffic has been going on for a while now, so Extreme Digital's turnover during the entire crisis could be up to 20-40 percent higher than previously expected. On the other hand, we will have to take into account the possibility that the global coronavirus pandemic may be followed by an economic crisis that can reduce turnover in the long run, not only for us, but for all market players.

Does the government’s economic rescue package affect you?

Extreme Digital is doing its best to reduce the difficulties and negative effects caused by the pandemic. Our crisis management team is continuously monitoring government communication and government measures, and is constantly examining which elements of the rescue packages they can use. We are currently examining what measures might be worth considering now or in the future. On the positive side, the easing of labour law rules could be mentioned, although this is not strictly a part of the rescue package.

Is it easier or harder to hire staff now?

The workforce situation varies in each work area. Although Extreme Digital primarily handles the new situation with reorganizations, we also experience the market effects.

While there was a lot of activity among unskilled workers and in sales as early as the beginning of March and we experienced mass applications; skilled workers and specialists seem to be postponing job seeking as we do not see any significant change there yet.