Coop Alleanza 3.0 is pursuing the EasyCoop project. The most advanced food ecommerce service in Italy, with an assortment of about 11 thousand products, including more than 3 thousand very fresh products. Disruptive innovation?
Easycoop-as well as the Supermarket of the Future developed by Coop Italia with the help of Accenture, on the occasion of Expo Milano 2015-represents an excellent exercise.
Coop has two prominent advantages over its physical competitors in the territory. Domestic leadership and favorable taxation, which in an industry with profit margins of 1 to 3 percent could provide sufficient resources to increase the advantage in the domestic market and strengthen against incoming global players. Therefore, its first goal should be organizational and operational efficiency.
Amazon has acquired Whole Foods
, the ‘organic’ supermarket chain, in June 2017 for US$13.7 billion. (1) And in less than three months he cut prices to the public by 40 percent.
Amazon is dumping in an industry with minimal margins and complex issues (such as the cold chain, to name one), in a more competitive market than Italy. He is an atypical competitor, monopsonist (2) and non-specialist. It does not depend on Whole Foods’ revenues, but uses it as a laboratory to explore and conquer the grocery of the Western world. Since it is functional for other more lucrative activities.
Coop’s multichannel approach, the idea of learning about and presiding over the digital market with EasyCoop, is therefore current is consistent. But perhaps Coop could and should do more, as it cannot fight on equal terms with players like Amazon due to asymmetry of technological resources.
Coop’s heritage-to be protected and enhanced-is the garrison of the territory, the opportunity for physical contact with the end customer. Well then to the digital approach, without losing sight of the winning motto. ‘The Coop is you!’ remains the approach to follow, on every channel. And it is therefore essential for Coop to understand how consumers have changed and how they will change. And that marketing will no longer be sufficient to cover inefficiencies or products that are inconsistent with advertising communication.
The goal of groups like Amazon, through the control of data, is to digitize trust. And this is perhaps precisely what is missing from the Coop Strategic Plan 2017-2019, as it is taken for granted. The defense and enhancement of physical consumer trust, so far cultivated mainly through marketing campaigns, store restyling, revamped packaging, and discounts.
Consumers are increasingly entrusting their education to digital channels. He is constantly bombarded with information and offers that tempt him to explore new supply opportunities at the cost of losing loyalty.
The great challenge of physical retail can therefore be taken forward. Rather than chasing the path set by others-reducing store staffing costs through automation-work on applying blockchain to food traceability, for example. To enable consumers to know in detail the origin and route followed by food, under the aegis of supply chain transparency. Through systems that are accessible to all, virtual and virtuous, without the need for intermediaries or certifications.
What could Coop do? Monitor these kinds of projects so that they can be implemented as soon as they are applicable, and in the meantime invest in the physical relationship with the end customer through the enhancement and preparation of sales and delivery personnel. And vividly pursue the sharing of its unique values and projects, on all digital channels and social networks, in synergy with independent entities and think tanks.
Fabio Ravera and Dario Dongo
Notes
(1) The acquisition caused the dry loss in a single day of the market value of major U.S. retailers, grocery area, by US$22 billion.
(2) Monopsonist is ‘the buyer in a monopsony situation, that is, who centralizes in his hands all the demand for a good or service, or enjoys, at least, strong market power’ (from the Treccani Vocabulary)
Specialist in distribution models and Revenue Operations with over 25 years of projects in different industrial sectors and countries (12 years in the US). I work on Lean Organizations, Supply Chain Inefficiencies, Organizational and Financial Restructuring Projects, Digitization and GDPR
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
