E-commerce draws users, eats time – and is bound eventually to conquor

The three supermarket-chains Bilka, Føtex and Netto constitutes the main parts of the Dansk Supermarked group, the second-largest group of the grocery retailers on the Danish market. In terms of revenue Netto comes in on top followed by Føtex and and Bilka. On the internet, however, things are turned upside down. This is what I discovered when I dug into the stats – published in my latest report “Bilka, Føtex and Netto: the effect of e-commerce on Danish grocery retailers” (se below).

This is particularly interesting because of the nature of the three sites. Netto.dk is extremely simple, Foetex.dk contains more elaborated information while Bilka.dk offers e-commerce of a selection of non-food items such as computers, bicycles, TV-sets etc. The learnings are clear to me: The more content, service and e-commerce you’re able to present to your customers, the more they’ll engage with your site. Lack of e-commerce clearly isn’t due to a lack of consumer interest!

Thinking about it, the reason why the state of Danish e-commerce in the grocery retail-space is so limited is, I think, a combination of the good ol’ fear of cannibalization – and a somewhat troublesome logistic setup, picking, packing and delivering the purchased basket to the customers doorstep. These things don’t need to be show-stoppers however!

Why is it everybody is so obsessed with the total end-to-end buying process? Leave it to the customers to pick up the goods at the store, I’d say, and you’ll save a large part of what makes e-tailing so difficult: the distribution process. Lots of customers will be happy just to be able not to have to be dragged into a five-minutes-to-five shopping “experience”, trying desperately to find something to feed the family while keeping an eye on the two kids, pestering you to buy candy.

And why is it e-tailers are so reluctant to fill up the virtual isles in their online outlets, when there is no limits what so ever on the magnitude of inventory you can hold on the internet? Sell whatever the customers might demand. Take advantage of your presence as a preferrede grocery-store and enlarge your productlines. This might make up for the decline in impulse-buying taking place moving online and hence contravene the cannibalization.

Also I’d say automated pick and place, central warehouses and more e-services making your visit with the etailer even easier and more inspiring will be ways to move forward.

It all cost, off course, and I suspect the “question of timing” argument is once again at play. The question is therefore, I think, which of the large chains will be able to hold their breath for the longest time. When the first one really gives in, the rest is doomed to follow.

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“Bilka, Føtex and Netto: the effect of e-commerce on Danish grocery retailers”. 17 pages, 7 illustrations.

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