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Retail in Detail/FMCG online: A rightly-timed conference

Great things have started to happen in the area of online FMCG sales.

Therefore the FMCG Online conference from the Retail in Detail series, organized by Blue Events, came at the right time. More than 150 manufacturers, retailers, distributors and E-Commerce information and service suppliers came together in the conference hall of the Boscolo Hotel in Prague to become familiar with the new online business network undergoing radical change. Nine speakers focused primarily on analyses, trends and changes of the FMCG market during the E-Commerce expansion period. In the dynamic afternoon discussion forum, everyone also compared different business models of multiple online retailers and discussed general chances and risks that accompany online FMCG sales.

Zdeněk Skála, Research Director Retail & Shopper from GfK, situated the Czech online market within the international context. With an 80% online penetration, the Czech Republic is catching up to the most developed countries in terms of Internet usage. However, while online sales in non-FMCG areas such as electronic appliances are highly developed and comprise 30%, the market with FMCG products sold via E-Commerce is very small, making up 0.8%. Zdeněk Skála finished his presentation with a definition of strategic questions that retailers, both brick and online, will have to deal with. One of the most essential ones is the task of inventing and implementing new customer goals for online purchases.

Tomáš Martoch, Business Development Manager, GS1, devoted his presentation to new proposals of coordination between commerce, manufacturing and logistics. The basis of brick, click & collect and even omnichannel business are structured data. If needed standards are implemented in the E-Commerce area, customers will be able to easily evaluate product information and make purchases from anywhere, which will mean a higher turnover rate for retailers, along with decreased expenses and better supply management.

The trends of online FMCG sales were described by Peter Koubek, E-Commerce Manager, Tesco Stores CR, as seen from Tesco's position as a global leader. Tesco is a multichannel retailer since 2012, and is moving towards omnichannel with the goal of satisfying customers in all channels of their choice. Today, the online sales division of Tesco has 4 million customers globally and 200 thousand registered customers here, in the Czech Republic. They have 100 delivery cars at their disposal here and sell 3 million items annually. Among the barriers inhibiting further development are areas with weak Internet coverage as well as the unpreparedness of some regions and the sparse population of others.

What are the prospects of E-Commerce development as seen by the suppliers´ representative Petr Krayzel, C&SR E-Commerce Manager, Procter & Gamble, and what does he expect from e-Retailers? The basis of on and off line commerce is a functional business model: frequency of visits, loyalty, conversion – sales, and bigger spending. The difference lies in varied purchase motivators. The deciding factors are: comfortable and fast buying, personalization and perfect service. Additionally, do not underestimate feedback comments. Sharing, evaluations, the creation of a community and its interconnectedness creates loyalty – customers feel like a part of the company.

E-Commerce and the consumer: How to create a partnership? was presented by Iveta Havlová, the director of a newly-founded independent platform for solving complaints, warranty claims and litigations, called Strategic Alliances Youstice. Youstice is a reaction to the new EU regulation concerning out-of-court settlements, which will become valid starting January 2016, and which will allow the consumer to submit a complaint examination proposal free of charge, to which the retailer has to react and supply the necessary documents. Youstice offers an alternative out-of-court conflict resolution through the utilization of neutral online platforms.

Josef Suchánek, E-Commerce Manager, Makro Cash & Carry CZ described his four-year experience as a wholesaler trying to offer maximal support to customers and specialized retailers. 80% of B2B Makro (HORECA) customers order online; Makro deals with 1000 orders daily and are awaiting a turnover of 2.5 billion in the Czech Republic in the E-Commerce division this year; they offer 40 000 products.

The Internet and interesting customers are not only in Prague, remarked Miloslav Hlavsa, director of COOP Ústí nad Orlicí, who introduced the local project COOP BOX. They saw the Click&Collect method as a good sales opportunity. Now, they are taking the path of building low-cost drive-in vending sites with cashless payment systems in regional and smaller towns, often in conjunction with a COOP gas station. They want to continue with this project and are currently testing other locations.

Jaroslav Kuchař introduced the long-awaited e-shop Koloniál, which was launched a week before the conference and is currently in its test phase. Unlike existing competitors, Koloniál does not shop through a wholesale company, but has ties directly with the supplier/manufacturer. To them, return to the roots means contact with the customer, product knowledge and sales with added value.

First practical experiences, gained after the first two months of operations, were shared by Jakub Šulta, founder, Kosik.cz. He shared key problems with logistics that arose after they stocked 6000 items. They had to change their logistical model, and now they re-stock multiple times a day. Today, they have 11 000 items, add 500 new ones weekly and have increased the number of deliveries to 100 daily.

Tomáš Jeřábek from Rohlik.cz, a company that has already been delivering online-ordered goods for nine months, expressed his thoughts on the concept in his presentation FMCG sales and other E-Commerce: the same or different league? “The new generation of customers wants comfort and speed; the price is not the deciding factor, key is same-day delivery. We deliver within 90 minutes. We have 1000 orders daily; the fulfillment of one takes us 10-15 min..."

Besides Jakub Šulta and Tomáš Jeřábek, the audience and other speakers also participated in the subsequent discussion.

This discussion revolved around a variety of strategic and tactical topics, including questions concerning unsuitable product range, order patterns and time fluctuations, alcohol delivery to the under-aged, addressing compensation for ordered, but unable to be delivered, goods, legislation, sales and marketing deals, future supplier relationships and the potential of personalized orders.

The conclusions were clear: “Online FMCG sales have an enormous growth potential and now is the right time to develop them. They are currently most used in large cities, but smaller communities also pose a major challenge for the introduction of local online services to customers through the click&collect format."

Contact for Media:
Aneta Zímová, Blue Events
Tel.: +420 222 749 841, e-mail: Aneta.Zimova@blueevents.eu

Contact for Additional Information About the Conference:
Barbora Krásná
e-mail: Barbora.Krasna@BlueEvents.eu

Conference Secretariat:
Blue Events
Hlubočepská 38c, Praha 5, 152 00
Tel.: 222 749 841
E-mail: info@blueevents.eu

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