Coronavirus emergency puts online grocery home delivery services in trouble. The few Italian retail operators face the stress-test of the demand explosion and struggle to manage it. And delays related to the contingent factor are in addition to structural limitations in service delivery across the country. As well as to the violation, found in several cases, of consumer information rules.
Coronavirus, stress-testing for home grocery delivery services
On 10.3.20–at the dawn of the entry into force of the ‘Italy protected zone’ decree, which extends to the entire country the drastic measures originally limited to ‘red zones’–an overview of food ecommerce sites offers a bleak scenario.
Operational problems are stated by all sites. Carrefour, Coop, Amazon Prime, and Supermarket24 (which operates the delivery service for 8 large-scale retail brands), as expected, are reporting delays and operational difficulties. (1) But that is not all.
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Geographic limits of food deliveries sold online
Esselunga-which donated 2.5 million to contribute to the public health emergency-is holding up well to the surge in demand. The site does not go down, as happened to us with Coop’s. However, delivery service in the territory is very limited. And it is indicative in this regard how the only outlet in the capital city does not offer home delivery.
The locations served by online shopping are almost always the same, limited to a few major centers. Hinterlands and smaller cities remain excluded. The widespread lack of a list of destinations reached by each operator, moreover, forces one to check the coverage of the geographical area of interest on each site from time to time.
Exceptions are Supermarket24, which claims to reach Milan, Turin, Rome, Verona, Bergamo, Bologna, Brescia, and Padua. And Easy Coop, which claims operations in Rome, Emilia-Romagna and Veneto.
Help for the over-65s but not the disabled
Free delivery to the over-65s – initially provided only in the first hour ‘red zones’ – is being extended by Esselunga and Supermarket24 to all areas reached by the home delivery service.
However, people with disabilities do not receive any help. Proof of how the large-scale retail sector in Italy still neglects the due attention to this category of weak contractors, which represents 5.2 percent of the Italian population(Istat data) and already faces serious difficulties in accessing stores and supermarkets. Only Esselunga, even before the coronavirus, eliminated delivery charges for the disabled, for one delivery per week.
Deficiencies in consumer information
The inadequacy ofecommerce is also revealed in the failure to comply with the rules protecting consumer information. We have reported this phenomenon several times over the years, providing for several reports against Amazon to the Antitrust Authority (Autorità Garante per la Concorrenza e il Mercato, AGCM). But our complaints have been ignored, and the situation does not appear to have improved at all.
Regulation (EU) no. 1169/11 requires that all information provided as mandatory on the label be communicated to the consumer, even in the case of distance selling. (2) So that it can have full knowledge of the characteristics of the food before making the purchase choice. Which are also relevant to food safety, among other things. But this obligation continues to be manifestly evaded by Supermarket24 and Amazon Prime. No wonder, then, that there is a lack of confidence holding back the growth of this sales channel. (3)
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The information stipulated as mandatory on the label ‘shall be available before the conclusion of the purchase and shall appear on the medium of distance selling or shall be provided by any other appropriate means clearly identified by the food business operator’ (EU reg. 1169/11, Article 14)
Food ecommerce, still at lows in Italy
The marginality of the ecommerce channel in Italy, in the food sector, is well documented in the report of the eCommerce B2c Observatory, sponsored by the School of Management of the Milan Polytechnic and Netcomm, the Consortium of Italian Electronic Commerce.
The Italian online market in Food&Grocery is close to 1.6 billion euros, with an albeit remarkable 39 percent growth over 2018. And yet it still accounts for only 5 percent of total Italian B2c ecommerce (amounting to 31.5 billion euros).
Food accounted for 89 percent of transactions in Food&Grocery, worth more than 1.4 billion euros. With a clear dominance of delivery of ready meals from food service establishments:
– food delivery continuously growing, as seen, 566 million,
– grocery food (supermarket food references), 476 million euros,
– food and wine (niche products), 383 million euros.
Online shopping services in Italy
‘Online shopping services in Italy have increased in recent years, but the supply is still fragmented. ‘Today, just over two-thirds of Italians (68.5 percent, was 64 percent two years ago) can do their supermarket shopping online, but with a level of service that does not always meet expectations, and nearly half of the population (47 percent, was 31 percent in 2017) is potentially covered by home delivery service of ready-to-eat food.
Activating an ecommerce initiative is only the beginning of a long and difficult process of channel integration that requires long-term oriented choices, continuous investment (in technology and beyond) and skill development. This is the only way to overcome the still-experimental connotations of many initiatives, to ensure an ever-increasing territorial coverage, and to offer a suitable level of service. And it is precisely in the development of this sector-the first in the shopping basket of Italians-that the future of eCommerce in our country is at stake‘ (Valentina Pontiggia, director of the eCommerce B2c Netcomm Observatory – Politecnico di Milano).
Marta Strinati and Dario Dongo
Notes
(1) Supermarket24 delivers on behalf of Esselunga, Eurospin, Carrefour, Conad, Auchan, Coop, Bennet, Lidl
(2) The responsibilities of ecommerce operators are highlighted in the previous article https://www.greatitalianfoodtrade.it/consum-attori/ecommerce-quali-responsabilità
(3) Rather astonishing is the lack of official public controls, instead so scrupulous on physical sales channels (!)