Interview with “Bravo” Supermarket chain

Unlike the apparel industry, all stores of supermarket chains stayed open during the lockdown. However, the operation hours were restricted, including total closure at the weekends, due to which during the working hours the supermarkets have encountered with the extreme flow of the customers. This led to the emptying of shelves due to the assumptions on the part of the customers that there would be not enough products, and they began to purchase products in large quantities. Such an intensive emptying of shelves led to the fact that the suppliers with whom the company works were not able to deliver goods in an increased amount in order to meet the soaring level of demand. In this regard, the supermarket chain began to look for new additional suppliers, regardless of the terms of the cooperation, only to meet the needs of customers and prevent empty shelves.

“During the pandemic, sales of raw food increased. It even reached to the extent that we started working with alternative suppliers because product inadequacies were monitored.”

With the aim to somehow balance the flow to the supermarkets, the company launched the telephone delivery service so-called hotline, by means of which customer could make the order and at the same time approach with any questions or compliance. The order was taking place in the following way: the client dictated to the telephone operator the goods he would buy, and the telephone operator, in turn, calculated the value of the order, placed the order, after which the order was delivered to the buyer. This kind of delivery service method was quite popular among the customers, especially among foreigners, but at some point, due to the huge number of orders, it was not efficient anymore to take the orders by phone. Because the company has created a special division that was responsible for handling received calls from the customers, and as the number of orders through phone calls increased, the department was physically unable to receive all the calls, and it was not efficient to hire additional employees.

For that reason, it was decided to launch an online store, the penetration level of which was much higher from a customer experience point rather than hotline orders.

The customer could also place an order by phone, the value of the order was calculated, and the order was fulfilled. After realizing that this was no longer effective, and it was decided to

launch a website on behalf of “Bravo.”

The performance results of the online store were quite satisfying. Nevertheless, online stores had many disadvantages in comparison with physical stores. The first disadvantage was that the online store offers a limited assortment of products. Mainly the customer is able to find only best-selling products, which mainly are products from the cheaper category. For instance, those products that occupy a smaller proportion of the supermarket shelves are those products that are included in the group of imported products and products belonging to higher-level brands. In terms of price indicators, these products are more expensive and are bought by a certain category of buyers. This means that consumers did not have a broad choice of brands.

Through the online store, customers could purchase only the most popular and materially available products for all income groups of the population. Even though more expensive and imported products are not considered as best-selling, they have their own target customer group, and it means that online store misses a particular portion of clients.

“A shelf in the supermarket sells 70 percent of the products that are considered cheap products. But, for example, there are customers that prefer more expensive products, then the

customer had a comfortable brand choice when buying from a physical store.”

Another problem with which online store encountered was from the point of IT. Since the information about products changes dynamically, either the availability of the product, price, or any other information, from the technical side, the website was not able to bear such an intensive change in the information. And partly this was one of the problems that did not allow to offer customers on the site a full range of products that are sold by the company of

“Bravo.” Thus, at the initial stage of the online store operation, the site could not completely replace the physical store in terms of reaching the entire target clientele.

“From the technological perspective, IT was not prepared for the high volatility in prices and other dynamic changes.”

As the online store gained popularity, the share of sales with online platforms increased.

And since the delivery was carried out by outsourcing companies, the turnover of work with

these companies increased accordingly. In this regard, for the company, it was no longer profitable to cooperate with third parties, and it was decided to create its own internal logistics department within the company that will deliver orders to customers. When buying goods for a certain amount through an online store, delivery was provided for free. To further increase the interest of the online store, “Bravo” is working to increase the range of products in the online store, with the aim to be suitable for all kinds of customers. In comparison with the outsourced logistics companies, “Bravo” had one disadvantage, customers were not able to track their delivery via the application.

Nevertheless, despite the growing interest in the online store, compared to sales that are made through the physical stores of the network, sales from online stores account for a minimal share of total sales. Due to the fact that buyers in Azerbaijan prefer to visit physical stores since for them this is not only a buying process but also their own kind of leisure and given the fact that the situation of the pandemic did not allow them to visit other places, a visit to the supermarket has turned into kind of entertainment for local customers.

“Azerbaijanis like to go to the physical stores. They arrange some specific day for shopping, meet with their friends and spend some time. So, for them it is kind of activity. Even during

lockdown, since majority of the shops were closed, there was a trend in SN “let’s meet in Bravo”. They were coming to the supermarket only to spend some time with their friends.”

With the advent of the pandemic, the supermarket chain has observed changes in customer behaviour, which was the impact of certain restrictions imposed by a government, including restricted time spent outside, restriction on visiting public places, and so on. Also, an economic crisis resulted in an increasing rate of unemployment. Due to this, the company arranged various marketing campaigns, revised its strategy, and applied several changes.

Among the changes, first of all, as already was mentioned, was the launch of an online store, but also various changes in physical stores. A lot of pop-up stands were placed, where mainly discounted products were offered. Talking about discount products, the supermarket chain

“Bravo” during the pandemic implemented a very aggressive discount strategy. Every week a number of products were offered for half of the original price. Or such companies as when buying one product, the buyer will receive a second one of the same products as a gift. Such promotions were mainly used for products such as buckwheat, butter, flour, etc. However, there was a set limit for the quantity of the products that customers were allowed to purchase with

applied promotion. Those campaigns were implemented mainly with the aim to support customers with low-income or those who had to lose their job due to the lockdown.

“During the pandemic, bravo customers received a 50% discount for bestselling products.”

As for the product preferences, during the quarantine, there were changes in different categories. Thus, the category of savoury food that includes pasta, flour, raisins and etc., the demand for the products of this category has drastically increased, because people started to cook their meal at home more frequently. Also, the demand for fresh food also experienced a noticeable increase. Demand decreased for the products of the confectionery category.

Customers started to buy fewer sweets, chocolate, candies, and other related products.

Regarding tea and coffee, the changes in sales were not noticed; it is possible to state that sales of this category were stable during the whole quarantine.

It is also worth noting that during the pandemic, supermarkets sold a huge number of products in bulk to organizations that were involved in charity work to help low-income families or those who lost their jobs to overcome a difficult financial period. This fact also greatly influenced the sales figures of supermarkets.

“I would like to note that during the pandemic in Azerbaijan, many aid campaigns were held for families in need, and for this reason, wholesale sales took place. For example, there were requests to purchase 200 pieces of pasta, and other similar products. Almost every day there

was a request for bulk sale.”

4.2. Analysis of quantitative data

Analysis of the quantitative data is focused on analysing the responses of the survey participants, which is divided into three groups: demographic-related questions, questions in order to analyse shopping habits of respondents, and the last group for the analysis of the perception of online shopping.

4.2.1. Demographics

The Table 1 demonstrates that the vast majority of survey participants are female (76.89%), 59 participants indicated to be male, and two respondents preferred not to mention their gender.

76.89% of the respondents are female, 22.35% are male, and 2 (<1%) respondents preferred not to mention their gender. The majority of the respondents are between the age of 18 to 23. Regarding the employment status, 46.21% of the respondents are students, 25.76%

are full-time employed employees. There are two groups of respondents that made up the majority of the sample. Not employed (14.02%), employed part-time (9.47%), and self-employed (4.55%) respondents accounted for a smaller part.

Table 1: Frequency Table for Gender

Gender n %

Female 203 76.89

Male 59 22.35

Prefer not to mention 2 0.76

Missing 0 0.00

Note. N = 264. Due to rounding errors, percentages may not equal 100%.

By analysing the variable age group, the group that includes the majority of participants is between 18 and 23 years old (39%). People from 24-29 years old are 22% of the total participants. Participants who are under 18 years old accounted for 16% of all participants.

Compared with the number of participants who are less than 18 years old, participants who are between 30 and 35 years old, who took part in the survey, are almost two times less (9%).

Analysing the graph, you can see the fact that, starting from the age of 29 and more, the number of participants who took part in the online survey is decreasing. Thus, in general, participants over 35 years old made up 13% of all participants. The Figure 5 shows the distribution of respondents by Age Group.

Participants were asked to indicate the approximate amount of their earnings, choosing from the options provided where the amounts are divided into intervals. Thereby, more than half of the participants have an income of less than five hundred AZN (63%). Fourteen percent of the participants said that the monthly income is in the range from 500 to 999 AZN.

Participants who earn from 1000 to 1499 AZN per month accounted for 8 percent. The rest (3-5%) of the participants declared that their monthly income is between 1500-5000 AZN and more. Therefore, it is possible to state that 85% of the respondents earn less than 1500 AZN per month. The Figure 6 shows the distribution of respondents by Income Group.

Figure 5: Age Groups of survey respondents

Source: Author

16%

39%

22%

9%

6%

4%

1%

0%

2%

0%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%

<18 18-23 24-29 30-35 36-40 41-45 46-50 51-55 56-60 61-65

Age Group

Figure 6: Income Groups of survey respondents

Source: Author

As for the employment status, 46 percent of survey respondents said they were students, which is significant, and 40 percent overall said they had jobs. Among those in any kind of work activity, 26 percent are full-time jobs, 9 percent are part-time jobs, and 5 percent are freelance entrepreneurs. Survey participants who are unemployed accounted for only 14 percent of the sample. The Figure 7 shows the distribution of respondents by Employment Status.

63%

Figure 7: Employment Status of survey respondents

Source: Author