Online grocery

Online grocery

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  Current Scenario in APAC Percentageof shoppers who are using social media site to make their purchase decisions 63% 37% Use Don’t Use Percentage of total research time spend on connected devices for each grocery shopping activity Category wise market share in overall online grocery in 2012 53% 24% 13% 10% < 25% 26% - 50% 51% - 75% > 75% 0% 10% 20% 30% 40% 50% 60% 70% 80% Conduct Research Online Purchase a Product Comapre Prices Look for Deals Read the Retailer's News Provide Feedback Percentage of shoppers who engage in different activities during household grocery shopping 43% 21% 16% 4% 17% Food Beverages Personal Care Household Care Others Percentage increase in the online grocery spending over the last five years on a per capita basis ($) 0% 5% 10% 15% 20% 25% Middle East America Asia Pacific Europe Strategic Options for Priceless Customer Management Optimizing Operations Future Roadmap
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  DriversforOnlineSuperstoresinSingaporeCurrent Scenario in APAC DemographicsConsolidated traditional retail market  Median age of a Singaporean is just 33 years suggesting that most of the population would be familiar with internet and its usage  Unemployment rate is under 2% indicating the rise of ‘Cash Rich Time Poor’ population  40% of the residents in Singapore are foreigners who create a huge demand for different products from foreign countries  High purchasing power and low availability of leisure time encourage the trend of easy and convenient shopping at online groceries stores  Two largest players, NTUC Fairprice cooperative and Dairy Farm International Holding, alone capture above 50% of traditional grocery outlets  Very few hard discounters and hence less price competition  Create an opportunity for online grocery retail to exploit the economies of scale and pass on the discount to consumers  Provide a chance to store varied products to cater the need of a large customer base  Reduces the cost of expanding into new territories and acquiring new customers  More than half of the population use social networking sites like Facebook  Mobile penetration is extremely high at around 150%, most of them prefer smartphones  With such a high connectivity, it is easier to extract customers insights and determine products and services future  Social connectivity increases marketing efforts as it helps in customizing the advertisements as per the target preferences  Most of the shoppers look for reviews and recommendations before buying a product  Broadband penetration is more than 100%, providing hi-speed service plans upto 1Gbit/s  Majority of the population lives in large metros/cities which makes it easier to deliver online groceries in an efficient manner  Due to lack of space, most of the cities have just one or two traditional stores, which creates a dire need for online grocery  Strong infrastructure helps in creating a robust operation model throughout the system Very high level of Social Connectivity Strong Infrastructure Current Scenario in APAC Strategic Options for Priceless Customer Management Optimizing Operations Future Roadmap
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  Current Scenario in APAC CompetitiveAnalysisoftoptwoplayersinSingapore Fairprice Cheers 7- Eleven Cold Storage Shop N Save Giant Valuefor Money Pricing Premium Pricing LimitedRangeExtensiveRange Windows for Opportunity Priceless Dairy Farm International Holding Opportunity 1 Opportunity 2 Opportunity 3 Expand Product Range  As evident from above fig., Priceless is currently having a limited range of products in supermarkets. With increase in the varied demand from the consumers, its high time that Priceless starts moving up in the 2nd quadrant Expand into 1st Quadrant  With the rise in ‘Cash Rich Time Poor ’ population, there is an opportunity to launch stores with higher perceived value for consumers. Outlet concepts like the. Thai Street and Japanese corner can help in this transformation Prevent Current Market Share  With more and more competition coming in, it is imperative for Priceless to tweak its business model to serve customers in a better manner Current Scenario in APAC Strategic Options for Priceless Customer Management Optimizing Operations Future Roadmap
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  Current Scenario in APAC BenefitsandChallengesofOnlineGroceryStores InfiniteProduct Offering Value for Money Shopping Convenient Shopping  Online supermarkets can have a large assortment of products catering to the demand of much larger user base These online stores will act as demand aggregators, hence making it economically viable to store less frequently selling products Delivery Services  Lack of truly flexible and optimized delivery system can undermine the online ordering convenience  Delivery charges (though can be charged) undermine the potential saving messages of online shopping. A robust back-end infrastructure is a must  Most of the online stores enjoy economies of scale, which in turn is transferred to end consumers through discounts and deals  The online stores also offer price comparisons. Hence, each store tries to provide the most competitive price  The online stores will reduce the overall time spend on the household shopping  With more and more customers using their smartphones to access internet, online store will provide an on-the-go shopping experience Sensory Factors  Even most of the regular online shoppers are not frequent grocery shoppers. Inability to see/touch the real product hampers the purchasing decisions  This trend is amplified in perishable food items Trust  Chances of wrong product selection/ substitution decreases the credibility. Customers don’t trust others’ choices on their behalf  Customers might be reluctant to share their personal data before making an grocery purchase Benefits Challenges Current Scenario in APAC Strategic Options for Priceless Customer Management Optimizing Operations Future Roadmap
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  BusinessModelforOnlineGroceryStoresinSingaporeCurrent Scenario in APAC Storeto Home Click and Collect Warehouse to Home Drive Through Home Delivery Pickup In-storePickingWarehousePicking Advantages Quick to adopt  Can leverage your existing business model Disadvantages  High Delivery Cost  Unavailability of ordered product in nearby stores  Interfere with the daily operation of supermarket  Customer has to be present at the time of delivery Advantages  Easiest to implement  Can leverage your existing retail network Disadvantages  Customer sees little difference in offline and online channels, hence unwilling to pay any premium  Unavailability of ordered product in nearby stores Advantages Benefits of scale economies  Infinite number of product offering Disadvantages  High level of customer service required can make it quite expensive for grocers Advantages  Highly efficient pickup processes, could take even less than 5 mins  Economies of scale benefits  Convenience to customers Disadvantages High level of customer service required Clearly, ‘Store to Home’ and ‘Click and Collect’ model seems to be most appropriate for Priceless to start its journey in the online grocery retail Current Scenario in APAC Strategic Options for Priceless Customer Management Optimizing Operations Future Roadmap
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  Mobile, Social &PC growth Evolving consumer behavior Retailer’s Goal Connect Interaction Gain actionable insight Optimize operations Web Commerce Customer Relationship Loyalty management Business intelligence Merchandise planning Pricing strategy Inventory planning & forecasting Supply chain/cross channel fulfillment Merchandizing Goal Action Points BuildingBlockofOnlineSupermarket Create a customer experience Platform Measure satisfaction across touch points Re-focus for measurable results Embrace advanced analytics in the era of big data Focus on cross-channel capabilities Optimize operations in real time Leverage one version of truth Gain visibility into product availability Improve the back-end to perfect the front-end Current Scenario in APAC Strategic Options for Priceless Customer Management Optimizing Operations Future Roadmap
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  Organization’s Problem – Unableto scale when needed Experiences consumer do not want Unhappy consumer Unpredictable consumer Traditional Retailing Missing big opportunities NeedforAgilityto Configure Optimize Scale Experiences Need for system to retrieve most relevant info in real time Adaptive experience Dynamic merchandizing Content targeting Product intelligence Experience optimization Happy user Modern online retailing Create a customer experience Platform Deliver targeted user-centric experiences in a scalable way Allow business users to guide and influence customers without having to predict their path, set up scenarios, or engage IT Integrate with technologies like Web analytics , recommendations , and user reviews to automatically drive elements of the experience Mix and match data-driven , dynamic content and static content Less no. of clicks to buy a product Easy to register & avail promotional offers Engage More Convert More ConnectInteractionGainActionableInsightOptimizeoperations Web commerce Measure satisfaction across touch points Collect and analyze customer data across all channels Measure customer satisfaction at all touch points Give customer ownership of channel experience Share up-to-date fulfillment, planning and execution information across channels Customer Relationship BuildingBlockofOnlineSupermarketCurrent Scenario in APAC Strategic Options for Priceless Customer Management Optimizing Operations Future Roadmap
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  Consumer orders Recipe Xbasket Customer Loyalty Cost effective purchase for consumer Added to cart Recipe Recommendation Loyal customer Repeat purchase ConnectInteractionGainActionableInsightOptimizeoperations Refocus for measurable results Improve customer profitability by rewarding the "right" customer behavior Reduce costs by automating loyalty management business processes Maximize the effectiveness of customer interactions Reduce expenses by having members update information online Integrate loyalty programs with complementary partner programs Develop consistent loyalty program, where customers can register, check loyalty balance, redeem rewards and access specials across channel Employ personalization recommendations i.e. recipe ingredient recommendation, monthly shopping recommendation Loyalty Management All Ingredients of Recipe X Ingredient Quantity A 100gm B 150gm C 50gm Monthly basket Recommendation Consumer makes a monthly grocery purchase Information recorded in system Item list Item Quantity A x B y C z Last month’s items are added to basket Updated items are added to basket Very convenient, time saving and addictive shopping BuildingBlockofOnlineSupermarketCurrent Scenario in APAC Strategic Options for Priceless Customer Management Optimizing Operations Future Roadmap
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  Merchandise planning issue No over-stock,solid markdown strategy, solve allocation issue Structured data Synchronization issue, data unstructured Cut-throat competition in retail Tailored Solution Increased Revenue ConnectInteractionGainActionableInsightOptimizeoperations Embrace advanced analytics in the era of big data Allows retailers to determine which items to promote to which customers using which methods Provides insight into how products are selling across various customer behavioral attributes Performs customer segment analysis based on demographics, customer value (recency, frequency, monetary analysis), lifetime/potential value, behavior, and item importance. Determines product affinities by performing market basket analysis Delivering personalized, tailored offerings to individual customers can derive improved revenue conversion Business intelligence ERPPOS CRM Business Intelligence Focus on cross-channel capabilities Connecting siloed source of data and embed science and analytics Delivers workflow and a decision framework that allows for what-if scenarios and comparisons Maximizes margins over the item's entire lifecycle, not just during the full-price selling period Enables retailers to monitor performance of past and ongoing markdown activities against financial and operational goals Provides visibility into below- chain-level forecast recommendations, recommended new retails, and gross margin costs of delayed decisions Merchandise planning BuildingBlockofOnlineSupermarketCurrent Scenario in APAC Strategic Options for Priceless Customer Management Optimizing Operations Future Roadmap
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  Accurate Demand Perfectservice ConnectInteractionGainActionableInsightOptimizeoperations Better Demand forecasting Optimize operations in real time Sell through of each assortment improved, resulting in better margin and inventory turn More effective quarterly transitions to new assortments Reduced in-store capacity Effective price ladders No of markdowns increased from monthly to bi-weekly Leverage one version of truth New planning system-from pre- seasonal analysis to strategic assortment analysis Line plan and buying plan moved to store level rather than basing the plans on the total chain Customer demand forecast drives time- phased inventory replenishment calculations Gain visibility into product availability Direct to consumer fulfillment Agility driven by simplicity , visibility and velocity Retailers gain visibility into current and projected orders, inventory, and supply- chain performance Store inventory needs are aggregated into associated warehouse’s replenishment plan Improve the back- end to perfect the front-end Split offers and ship more effectively Streamlining merchandizing and pricing Manages key foundation data: hierarchies, suppliers, locations, and items Easily handles multiple brands, countries, and/or channels Pricing strategy Inventory planning & forecasting Supply chain/cross channel fulfillment Merchandizing Accurate Replenishment planning Inventory Optimization Low inventory holding cost Better service level Secure, reliable & scalable BuildingBlockofOnlineSupermarketCurrent Scenario in APAC Strategic Options for Priceless Customer Management Optimizing Operations Future Roadmap
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  FutureRoadmapforPricelessCurrent Scenario in APAC CurrentScenario in APAC Strategic Options for Priceless Customer Management Optimizing Operations Future Roadmap Basics Features Increasing Traffic Advanced Features Branding/ Community  Convenient is the biggest factor for which customers opt for online grocery store  This feature should be considered in all the aspects of online store  Some of the must have features should be: Aesthetic design, security, robust server, easy payment processing, service call centre, basic survey  Once basic features are done, focus should shift towards increasing the user traffic to the store  With the increase in smartphone usage, it has become necessary that the online store is optimized for the mobile version  Several features like SEO, shopping feeds, ads, discounts, etc. can help in this area  Next Priceless should consider about creating a fruitful engagement with the customers  Such kind of engagement will lead to customer loyalty which in turn will help in repeat purchase  Features like: product reviews, stories/testimonials, recommendations, personalization, online chat, etc will help in this regards  Finally company should look towards creating a Brand value for the online store  This can be achieved through mobile widgets, wikis, loyalty program, product videos, etc  Creating a brand will help attracting new customers at a lower cost and retaining them Currently, Priceless has just basic features in its online endeavour. Looking at the current market conditions, online grocery retail is bound to increase in coming future. Best part all this problem is that there are tools available to solve this issue. Several technology company like Oracle provide retail solution to handle these situations. All that ‘Priceless’ needs is to collaborate with a trusted consulting partner with a good track record, to help them implementing those solutions