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Who will win the war for the client?

What is in retail today

According to Igor Shekhterman, great changes are taking place today — fundamental consumer habits are changing. If earlier the buyer chose between going to the grocery store and lunch in a cafe, now the choice is different. People choose how to get food faster and more effectively at a given time. Most often they just order delivery.

Therefore, the stores have a new competitor — delivery services, such as Delivery Club or Yandex.Food. Of course, these companies do not have a noticeable effect on retail business so far. According to X5 Retail Group's estimates, delivery services in Moscow carry out from 40 to 50 thousand orders a day, and the retailer serves daily more than 4 million customers. But the competition will grow, first in large cities and then in the regions, it's inevitable.

Interestingly enough, there's a crisis of hypermarkets all over the world. While buyers used to be happy to shop there, now they are gradually abandoning this consumption model. People became more interested in fresh products, which are pointless to buy in stock, and it is easier to buy them in the shops “at home” than to go for this purpose to the hypermarket.

The second crisis point is that sales of non-food products are steadily shifting to the Internet. “Carousel” hypermarkets have already experienced both of these trends and are looking for new concepts. However, innovations are also being prepared at “Pyaterochka” and “Perekrestok” networks.

X5 Retail Group is changing

Changes in retail networks are already taking place today. Thus, the Pyaterochka network is studying the possibilities of adjusting the assortment of each outlet to the needs of customers. Now the assortment in all shops is approximately the same, but the buyers are different. Some stores are mostly used to buy food for a week, others to buy one bottle of water or a snack.

Igor Shekhterman is convinced that this system must be rebuilt. Currently, the network is developing an algorithm with which it would be possible to determine the range of the most popular products in a certain store. In particular, the “types” of outlets, such as “Big purchase”, “Premium”, “Eat/drink now” are defined. Operational testing of the system is planned for summer 2019.

“Carousel” will change in two directions. Firstly, it is possible to order goods online and pick them up at the store. Secondly, it is planned to create a kind of “shop-in-shop”, that is, to organize a partnership with another retailer, which would take over all the work related to non-food products.

New formats are also being opened. Thus, in 2018, two “dark stores” were opened — a grocery store-warehouse, which operates exclusively for online orders. In 2019, the chain plans to open at least one more store of this type. X5 Retail Group pays great attention to entering the ready meals and semi-finished products market. Equipment for centralized production is already being tested, which would provide the entire “Perekrestok” network and partially “Pyaterochka” with ready meals.

Who will win the war for the client?

Today, several major retailers in the West occupy 70% of the market, while we have only 25%. It is obvious that Russia will see the growth of federal trade networks, and smaller ones will unite. It is easier for big players to expand, invest in new technologies, because they have serious purchasing power advantages. 

However, other things being equal, the winner is the one who is most effective in operating costs. Efficiency can only be achieved with reasonable control over operational activities. There are many ways to do this, but one of the most convenient is MD Audit. In particular, it is used in “Perekrestok” stores, which, according to Igor Shekhterman, showed the highest growth rate among all X5 Retail Group stores in 2018.

MD Audit is a quality control system of standards execution on operational processes of any business area. It is based on a well-known methodology of using checklists, but in our system it is raised to a new level. All the work is made in electronic form by means of the mobile application that repeatedly increases efficiency of this tool, in comparison with the traditional “paper” approach.

Taking control of the operating activities, you will be able to increase the efficiency of the trading network as a whole, thus gain an undeniable competitive advantage.

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