Retail Pricing Heroes: The inflation brought on by the events in 2022 have notably impacted the global economic climate. Consumer wallets have mostly dried up. What does that mean for online supermarkets and their prices?
Miha Deu: Due to our omnichannel initiative, we at SPAR Online webshop promise the same prices online as offline–regarding the price policy, we did not change a thing. But, due to price increases of production, raw materials and food ingredients, and also increases in the price of labor, incoming goods have become more expensive for us as a retailer as well. That is why SPAR Slovenija put more focus on white label products in the past year. With these products, we could keep control over our prices, despite the 19% inflation within the food sector in Slovenia. We have a campaign in Slovenia where we are promising to our customers that SPAR Slovenija is blocking inflation, and this is especially important for online business, where the line between profit and loss is very thin. Remember, we have to squeeze preparation and delivery of the order into our profit margin. That is why our current picking optimization and logistics performance, as well as our bigger average shopping cart value KPIs have grown significantly in importance. We are tackling this with updates to our picking and logistics software, with a focus on speeding up and automating the process where possible. On the webshop side, we launched a special tool that, with the help of in-house developed AI, offers the most relevant products to our regular customers. And, since this tool reduces the number of products that customers forget to add to their cart, we were able to increase the average online shopping cart order value. Below the line, we did not record a drop in the number of orders, only that the growth had slowed down slightly.
RPH: Compared to pure online supermarkets, what advantages do you envision for 2023 by being part of a traditional retail chain group like SPAR?
MD: The most important advantage is that SPAR is a well-established, trusted, top of mind brand in Slovenia, with a 30-year history on the market. This facilitates our online marketing when promoting products, and also assists our purchasing department’s efforts to acquire competitive products at competitive prices.
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