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As Carrefour’s chief executive, Alexandre Bompard, says the retailer is not planning to exit any further countries, and its country operations in Belgium and Poland expand their offer, we round up news for the retailer.

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Frisco.pl reported a 37% increase in sales in 2018 to reach PLN96.5m (US$25.6m). This continues the double-digit growth rates it has been reporting since 2015. The pure online retailer is set to grow at above the rate for the channel, which we estimate to be around 15% between 2019 and 2023.

Frisco.pl is far from profitability, but it is getting there

Sales performance is illustrating growth, but the online retailer has yet to report a profit. In 2017 it generated a PLN12.7m (US$3.4m) net loss but was an improvement on the PLN13.2m (US$3.5m) net loss it recorded in 2016.

Regardless of its lack of profit it is managing to increase revenue. Following our recent visit to the country we have identified five strategies it is employing to do so.

1- Competes against other channels in the main shop mission space

Frisco.pl is growing its shopper base by attracting main shop missions from other channels. It is doing this by offering greater convenience and targeted pricing. Shoppers can buy bulky items, plan and build their shopping baskets across several sessions. It offers a wide range to compete against hypermarkets, while in relation to price, it uses targeted marketing, generated from data from shoppers’ smartphones or tablets geolocation, which it uses to send them personalised promotions.

2- Flexes its delivery service coverage

Frisco.pl mostly delivers in the Warsaw area, but does offer a limited service to the rest of the country. Deliveries outside of Warsaw are restricted to business hours, during weekdays. Most of these deliveries are made up of business-to-business orders, usually for offices. The retailer is looking to expand this coverage, most likely to another major city, such as Krakow.

Source: Frisco.pl

3- Drives sales on quality of fresh food

The pure online retailer uses a just-in-time model for their fresh food range, so it can offer assortments that compete on freshness, in addition to the quality of delivery. By attracting shoppers to its fresh category, it can convert them to buy their main shop mission through it too. It also drives sales by attracting shoppers to a category with targeted marketing and pricing, in collaboration with branded manufacturers.

4- Leverages shopper trends like healthy living

It added a page on its website to make it simpler for shoppers to buy and cook healthy food. In one example, it collaborated with celebrity fitness coach, Ewa Chodakowska, by linking shoppers to her website where they could plan their healthy diet meals. Other collaborations include Przepisy.pl where shoppers can select a meal and, with one click, add the relevant ingredients of that meal to their Frisco.pl shopping list.

Source: Frisco.pl, Przepisy.pl

5- Delivery payment benefits tied to purchase volume

Frisco Fruit is Frisco.pl’s benefits programme, which encourages shoppers to take advantage of lower delivery charges and better booking slots if they buy more. Shoppers are rewarded with points every time they complete an order, so for every PLN50 (US$13.30) above the minimum order they get 15 points. They can receive lower delivery charges or no charge at all, depending on the points, and additional products from a promotional basket.

Source: Frisco.pl

Frisco.pl is preparing for further growth with new automated warehouse

The retailer opened a 11,000 sq. m. automated warehouse near Warsaw, in May 2019, that quadruples its capacity for more orders. It is designed to centralise control over the entire picking process and increase its efficiency. The unit is divided into several temperature and logistic zones and has a robot that can prepare up to 420 orders per hour. Also, boxes are transported on conveyor belts around the warehouse, which handles 80% of the intra-warehouse transport.

Source: Frisco.pl

Subscribers can read how the food industry create solutions that make online shopping even more convenient Last mile: delivering the goods.

Amin Alkhatib

Amin Alkhatib

Senior Retail Analyst – Central & Eastern Europe

Central and Eastern Europe is a region that illustrates great growth potential for both retailers and suppliers. The region also presents opportunity for retailers to evolve their business model to widen their shopper base and draw more traffic to their stores.

This in-depth guide to Poland explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

See the latest industry news on Central and Eastern Europe.

We review Kroger’s first quarter results and the factors driving growth at the world’s second largest food retail business.

Identical store sales behind expectations

Kroger’s first quarter sales fell by 1.2% to $37.3bn, reflecting the divestment of its convenience business last year. Total sales, excluding fuel and the impact of selling the convenience store business, increased 2.0%. Identical store sales over the period increased 1.5%, excluding fuel. This is below the run-rate required to meet its full-year guidance, with several initiatives underway to try and accelerate its performance. The work undertaken on space optimisation last year is expected to generate a tailwind for the business going forward.

Source: IGD Research

Investing to redefine the customer experience

Kroger remains a business in transformation, driven by its strategic plan Restock Kroger. Central to this is its goal to increase operating profit by $400m over a three-year period, driven mainly by alternative profit streams. This will enable the business to continue to invest in the customer experience, including its ecommerce and private label operations. The business remains confidence on achieving this, with alternative profit streams expected to contribute an estimated incremental $100m this year. The retailer has made several appointments across its media and data business units to enhance its capabilities in these areas.

Ecommerce sales up 42%

Ecommerce sales increased 42% in the quarter as it expanded grocery pickup to 1,685 locations and delivery to 2,126 locations. It also started to test a 30-minute delivery service, Kroger Rush, in the Cincinnati area. The retailer made further progress with its private label business, launching over 200 new products. These contributed to sales growth of 3.3%, helping unit share to increase to 28.9% in the quarter. Its Simple Truth and Private Selection ranges performed particularly well, delivering double-digit sales growth.

Partnerships underpinning transformation

Partnerships are an important part of Kroger’s transformation. During the quarter it formed PearlRock Partners with private investment firm Lindsay Goldberg. This is a new platform to identify, invest in and help grow the next generation of leading consumer product brands. It also formed a new direct relationship with Pinterest, further enhancing its Kroger Performance Media division. The retailer also broke ground on the first customer fulfillment centre that is being developed as part of its partnership with Ocado. Developing these types of partnerships has become a much stronger focus throughout the food retail industry as retailers look to move at pace and bring new capabilities and thinking into their businesses.

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JD.com and Alibaba reported record breaking results for the 18-day campaign, with sales value up by +26%YoY.

The festival has evolved to be a major midyear ecommerce event

6.18 shopping festival, created by JD.com, now joined by Alibaba, has become a midyear event that can match the scale of the 11.11 global shopping festival.

The total sales transaction reached a new high this year of US$29.2bn, up by +26%YoY.  Around 200,000 brands took part and more than 110 brands each generated sales in excess of CYN100mn (US$14.5mn).

There are four key learnings from this year’s event, which are summarised below.

Less developed regions becoming the new growth engine

There has been a steadily rising demand from consumers in lower tier cities for quality products. With an increase in discretionary income, consumers in less developed areas are quickly becoming a main consumption engine and really drove this year’s 6.18 festival:

  • Volume growth was twice as high in lower tier cities than the overall growth on JD.com
  • Percentage of new users from lower tier cities was also much higher than the percentage of new users overall
  • 48% of the products newly launched on Tmall during the event were purchased by customers in less developed areas

Innovative approaches to widen reach and build engagement

This year’s event saw an array of innovative ways to reach customers and build engagement. The highlights are:

  • Social media played a key role: Two marketing campaigns had more than 100 million participants, all involving sharing on social platforms
  • Livestream to promote brands: Taobao’s livestreaming was an effective and important channel to reach shoppers. With hosts making recommendations for “must-buy” products, Taobao livestreaming helped generate more than CYN13bn sales. The number of livestreaming sessions hosted by brands increased by more than 120% vs. last year
  • Direct manufacturer-to-consumer model: Taobao’s Daily Deals, a channel which allows consumers to ordered customized products straight from the manufacturers, generated over 420 million orders

Group buying was a major push

Alibaba’s group buying platform Juhuasuan drew 300 million new customers. The platform has been repositioned recently for those looking for quality goods at competitive prices. Group buying via WeChat was also available in Hong Kong during this year’s event.

Technology used to meet customer expectations

Technology played a key role during the event to improve customer experience and exceed their expectations. JD.com’s smart customer service robot dealt with more than 32 million inquires, freeing up human services for more complicated inquires. 91% of orders from JD.com’s fulfilment centres were delivered on the same day or next day.

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Presentations

19/06/2019
The Perekrestok dark store is one of three types of fulfilment solutions that deliver in Moscow and the wider region. The other two types of online fulfilment units are a regular store and a hybrid one. In comparison to the other two fulfilment formats, the dark store has the advantage of greater picking efficiency and speed. We visited the store to observe its operational effeciency.
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As the UK prepares to leave the European Union, we update our five year forecasts for the grocery market, quantifying the opportunities available in each retail channel. Drawing on a combination of economic base data from official sources and retailer specific forecasts, we set out our growth expectations.
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12/06/2019
Ecosystem based retail has emerged as one of the new buzzwords and operating models in the sector. In this report we introduce the ecosystem model and what suppliers need to consider as a priority.
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