Recently, a Colombian company in the online groceries market – Merqueo – received significant support by obtaining USD 50M in series C to expand its online service to other Latin American countries. Its business model has allowed value chain optimization by reducing intermediaries and integrating a logistic model of deliveries, operating in around 25 cities in Colombia, Mexico and Brazil.
It is clear how this company that decided to bet on the online service long before the pandemic, managed to boost its business during the last year, leveraging future expansion. Additionally, is projecting an attractive growth level, considering that online sales represent only 1% in the region, far from other regions.
The online market service is a growing arm in the development of one of the most competitive markets: Retail. Companies use to work hard in physical stores to highlight their products in order to be the customer’s favorite. It has motivated a strong focus in optimizing the shopping experience, considering that it goes beyond the tangible product that is being acquired.
Now, when we go to the online arena, we see a very standard shopping experience: a photo of the product that you can hardly zoom in, and a few features in a list. But … will it be possible to optimize this experience and begin to identify product information that may be relevant to the buyer?
Proper management of the data, profiling the customer and identifying the factors that influence purchase decisions will allow us to go beyond the price. It is pertinent to start exploring other factors, such as choosing the best nutritional components, an environmentally friendly production chain, purchase volumes from other users and even a shopping experience closer to the physical store. All of them could be a great differentiating component in the process.
On the one hand, it is important to consider the shopping experience. There are advances in Virtual Reality and Augmented Reality that take the customer experience to more than a list of products, allowing to simulate the shopping process as if you were in a physical store. However, is this what the customer is really looking for?
It may be convenient to evaluate, as the new normality gets in place, how to identify the customer profile who prefer to remain in the online purchase and how is their rationality during the purchase process. What makes you to decide one product over another? Could niches with significant potential be identified? For example, those who care about nutrition facts – could we give them a good comparison? -, or highlight more environmentally friendly products, or local products.
This can even be a great space for brands to test their products, their presentations, and quickly validate which ones best fit the purchase decision.
We believe that there is still room to develop in this niche. In order to grow further, proper management of customer data making a match with available product information is key to build the profile of online buyers
And you, what do you prefer when shopping? Going to the physical store regardless of the rows and scrolling? Or do you prefer to shop online? What information will help you to choose which products acquire?
Diego Forero
MBA- Manchester Business School
MSc – Industrial Engineering and BSc Administration- National University of Colombia
Passionate about innovation, data management and analytics