StrongPoint helps grocery retailer ICA Nära Bräkne-Hoby achieve grocery e-commerce profitability within 6 months
June 15, 2021
See summary of the video interview here:
About ICA Nära Bräkne-Hoby
- ICA is one of the largest grocery retailer in Scandinavia
- ICA Nära Bräkne-Hoby is an ICA store in southern Sweden
- The store only began providing grocery e-commerce in June 2020, due to the massive increase in demand driven by the Covid-19 pandemic
- Size of the store: 1,500 m2 (16,145 sq)
StrongPoint e-commerce solutions used
- 7-8% profit on e-commerce after 6 months.
- Efficiency saving of over 2 hours a day by using StrongPoint’s locker solution alone
- From 0% to 12% of all orders bought online in 10 months
- Online orders tripled each week after acquiring StrongPoint’s grocery lockers
The ICA Nära Bräkne-Hoby store is part of the ICA chain, the biggest grocery retailer in the Nordics. Many of the stores located in and around the biggest cities of Sweden have been providing e-groceries and the Nära Bräkne-Hoby, located in a relatively rural part of the country, was at the start of 2020 looking at how to tap into the growing e-commerce market.
Then the Covid-19 pandemic hit and they were faced with an immediate spike in local demand so they needed to act fast to ensure they maintained market share and responded to their customer needs. The cost of not doing grocery e-commerce now would be too high.
To be able to execute quickly the store turned to StrongPoint which is already a preferred supplier of grocery e-commerce technology for the store’s group. Within just weeks StrongPoint was able to get the store up and running with its Order Picking solution and soon the need for Click & Collect Temperature-Controlled Grocery Lockers became apparent.
“At first we provided curb-side pick-up. The customers would call us when they arrived at the store and notify us that they had arrived, and a store associate would hand them their bags of groceries. However, this solution took a lot of time and it was impossible to concentrate on other tasks as the store staff could at any time be called to leave the store and deliver groceries to the customer. As demand grew, we needed a more efficient click & collect solution,” Says Johan Ohlsson, store owner of ICA Nära Bräkne-Hoby.
Volume and capacity grew with Order Picking and Grocery Lockers
The question on the minds of every grocery retailer facing e-commerce is how to make it easy to manage, hyper-efficient and profitable. By implementing the combination of in-store picking and click & collect lockers, the ICA Nära Bräkne-Hoby store was able to reduce the amount of labor needed to both process and deliver the orders.
“Our customers love the grocery lockers and tell me it’s the best things we’ve done. Using click & collect lockers is one of the key reasons why our grocery e-commerce orders have increased so much so quickly.”
Since installing the grocery lockers from StrongPoint, the demand for online groceries tripled each week and, 10 months later, 12% of the store’s revenue comes from online orders.
Outside is the new inside for grocery lockers
The Covid-19 pandemic has changed the dynamics of click & collect demand which for most people is something they associate with having to go inside the store to pick-up.
Now people want to collect their groceries outside, making it safer and faster. But the weather in northern Europe can fluctuate from below zero to over 30C. One of the reasons why the store chose StrongPoint lockers was their reputation for durability and their proven track record of grocery lockers purpose built for outdoor usage.
This change in consumer demand provided an additional efficiency saving as it relieved the grocery store of having to invest in storage infrastructure inside the store. “We don’t use any temporary storage space as all online orders are picked and put directly into the lockers which saves us a lot of time and hassle,” said Johan Ohlsson.
Efficiency savings from grocery lockers and order picking driving profitability
Using grocery lockers also saves staff time as it is more efficient to load orders than handing out bags of groceries in the store or bringing it out to customers in their car outside. The store saves on average at least two hours of staff labor every day because of the lockers, the equivalent of over 2 months’ full-time work of a store associate over a year. A substantial saving that has had a direct impact on making their online offer profitable.
“StrongPoint’s grocery lockers save a lot of time for both us and for our customers. In addition, it makes it easier for our store staff to focus on other tasks being interrupted on a regular basis to have to hand over the orders in person. According to our data our customers take less than one minute on average to pick up their order and we avoid customers queuing waiting to be served,” said Johan.
The issue of reducing labor costs naturally leads to the biggest challenge with grocery e-commerce, achieving profitability. According to the store’s own proprietary calculations for profitability, taking into account labor hours, depreciation of assets and more, Johan says they are hitting 7% profitability in the recent months and in January 2021 it was as high as 8%. There is a small surcharge on items ordered online but the primary drivers for profitability is the efficiency savings of the overall integrated solution, combining both the in-store picking and click & collect grocery lockers in a seamless workflow.
“We would not have been profitable without StrongPoint’s grocery lockers and order picking solution”, says Johan.
“E-commerce quickly became incredibly important for us, and this is where we are seeing the most growth. We have already invested in another grocery locker module from StrongPoint because demand is increasing, and we need more capacity.” Says Johan.
In terms of which supplier to choose for e-commerce solutions, Johan is not in doubt:
“I highly recommend StrongPoint’s products to grocery retailers. They have smart retail technology solutions which help grocery retailers to save time and simplify store operations, especially for e-commerce operations.”
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