Appendix B: Transcript of the interviews
IV. Interview from General Counsel of Supermarket chain „SPAR” in Kaliningrad city Alexey Elaev
1. History of Spar Kaliningrad
Historically, our sales network is more than 25 years old, but specifically SPAR and the Friends Club was opened on August 14, 2014. But the opening date of the company representing the chain of stores in the food sector is July 17, 1998.
/ And when was the online store launched? /
The online store was launched in April 2020, which means that an online store is a relatively new business for us. We thought about it, but we didn’t anticipate that we would have to implement it very quickly. Therefore, in a month, basic solutions were introduced and then the concept was finalized and the site's functioning from April 2016 as a separate business.
2. Development of the online store. What is the rationale behind the decision?
A large number of people still went to physical grocery stores, because this is the sector where grocery stores always worked, even during lockdowns and self–isolation.
/ Can i conclude that online store is something supporting the business and not additional traffic?/
Undoubtedly, this is an addition to the business. We understand that there is a trend, and in a high degree of probability it will become a separate business, but for now this is an addition to the business. Because in the Kaliningrad region, unlike other regions in Russia and the world, large shopping centers did not close during the pandemic. That is, as already noted, the tendency to go to grocery stores continued and our network worked the entire period without closing.
But we understood that there was a certain category of the population that was obliged to comply with the self–isolation regime, and we understood that these customers cannot be lost and this is our responsibility for organizing a convenient online food trade in our region. It should be noted that this has not happened in our region before. There was a possibility of delivery using traditional delivery services, but we have created an online store as part of normal trade through the marketplace platform that did not exist before. We have had cooperation with other marketplaces where our products have been sold and are being sold to this day, but we understand that our own marketplace is better than cooperation with others.
3. Have the sales improved after implementation of the online store?
There is no relationship between the network indicators and the implementation of the online store. Due to the fact that the physical stores periodically being opened in the region.
Therefore, we cannot say for sure that this is an additional, completely separate online channel improving our KPI or just a supportive channel. We tend to think that online service mostly for our current customers. It is also important to understand, that most of the
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consumers in our city are conservative consumers, and they prefer to have visual and tactile contact with the products. They want to choose the meat and fresh baked goods personally.
It is difficult to do it in an online channel.
However, we try to be architectures of customer choice. That means that we have special recommendations for each category of consumers. If the customers want our ultra–fresh service, to touch the products and choose them individually, please attend the store, if the customer has special conditions, for example mother of many children or pensioner, we offer a convenient service for them to make a delivery and we ensure the up to date and high–
quality products. Thus, we have declared the customer’s service and their preferences as our highest priority. We try to create an omnichannel model, where the customer stands for the main figure with his needs.
/ The reason for implementing an online store. /
We understood that this was the future. Further, clear terms were given, and we introduced an online store. It should be noted that this was done on our own courier base and not on a borrowed courier base. That is, we have created our own marketplace.
And now catering establishments are joining our marketplace.
Therefore, we plan to improve the service and expand the marketplace. With regards to the service, we have already switched to 1 hour delivery slots. We think this is a very good indicator. Previously, there were 2–hour slots, but now we deliver products within an hour and a half after processing an order, which no one does in the food sector in the Kaliningrad region.
4. What are the main networking channels for customers to get in touch with the company regarding the service and online store improvement recommendations? What are the most popular question from the customers?
The most important thing for our company is not only the quality of products, but also the quality of service for consumers. An enjoyable and easy shopping experience is what we strive for and support. We use all channels and analyze all reviews. To be honest, we see less and less feedback and that is a serious problem. In the days of the USSR, there were few shops, and the shops received reviews from the book of complaints and suggestions. Thus, people understood that they did not have another store and they simply have to improve the store they already have with their feedbacks. Therefore with the help of a book of complaints, make them improve. In our era of the market, this does not work like that, if the consumer does not like the store, then he simply stops going there.
It should be noted that since the beginning of January this year, Russia has canceled the mandatory presence of a book of complaints in stores. But we understand that especially the older generation are accustomed to leaving Feedback precisely through the book of complaints, so we left it in our store to collect reviews. We also use all kinds of contact channels via phone, mail, feedback form in the online store, also through a mobile application.
/ is mobile app the most popular channel of appeal? /
Undoubtedly. It is the most popular circulation channel and the most popular ordering channel.
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5. What possible improvements you plan and expect in new future regarding to the online store?
The improvements mostly refers to the digitalization process. The main part of digitalization, the underwater part of the iceberg, is internal digitalization. Accordingly, we pay great attention to analytics, we are working on optimizing business processes, because for us digitalization is primarily a cost reduction in our main offline business. As for external digitalization we see our loyalty service “Friends Club”. There is already 500k installations of the mobile app in our region. It consists of two main components: As a local marketplace.
We plan to integrate their restaurants, other friendly businesses, flowers, electronics, etc.
Also, inside the club of friends, we have a second part – this is the value of contact with the client, which is initially formed offline, but we are trying to use it in the digital world. For us, the Internet space is, first of all, the opportunity to sell dry products: water, juices, cereals, etc. But the value of communication with ultra–fresh will of course remain behind an offline store.
6. Talking to special offers, do you have such discounts or loyalty programs?
Our “friends club” loyalty program mobile application is one of the most popular in Kal–oi region. It has already been downloaded by about 500k people, so we try to ensure that requests go through our mob. application because it is more convenient for citizens to use the application than the Internet site. Through mob. application, you can view promotions, purchases made, order food, follow the bonus system, get additional bonuses through in–app entertainment content for subsequent purchases. There is also a cumulative system of points for purchases of certain goods that can be spent in the future instead of real money.
It should be noted that we have a modern loyalty program. That is, it not only gives a discount on certain goods, but there is also a bonus accumulative program and a program of special individual offers according to consumer preferences. That is, an artificial intelligence component has been implemented that can analyze frequent purchases and offer discounts for similar products from the same category. We have introduced all kinds of new technologies into our Internet resource, because we understand that this is the future. For example, our bonus accumulative program and a program of special individual offers according to consumer preferences. An artificial intelligence component has been implemented that can analyze frequent purchases and offer discounts for similar products from the same category. We have introduced all kinds of new technologies into our Internet resource, because we understand that this is the future.
Naturally, work is undergoing. But this amount is relatively small. We understand, that in food retail if the customer decides to order something, he will do that, if not, that he has a reason also for that.
7. Has Covid–19 and anti–pandemic regulations affected the demand and company’s activity?
It should be noted that the covid influenced in waves. Depends on time, depends on the period and, most importantly, on the behavior of citizens and on the desire to follow the measures taken by the region administration.
If at first citizens bought all long–term storage goods and stopped going to stores for fear of infection, then gradually the fear passed, and the preferences of buyers practically did not
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change. And it was determined not by the covid, but solely by the financial situation of the buyers.
8. Do you sell your products on other marketplaces?
We are represented on other marketplaces, for example, in Yandex, we work with them, but this is not a priority for us. The priority for us is the development of our marketplace to such a level that other catering companies, occupying niche industries such as: baking, flowers and confectionery companies of ours cooperate with us and sell their products through our marketplace.
9. How e-commerce helped you to gain competitive advantage?
Well. The main advantage is the possibility to provide wide range of products. We provide industrial orders, i.e. an order that has a wider selection of goods, we provide a wider geography of delivery, and we also have more than 10,000 items available for searching for goods, and due to this, the consumer gets a unique opportunity to order everything at once in one place. Moreover, we plan to expand our marketplace, to attract new businesses like bakeries, electronics, ready meal etc. This is what regards the online store.
Thanks to our loyalty program and mobile application “Friends Club” we exist in the most usable device nowadays– smartphones. Most of the customers ordering food via mobile applications, considering that in our region there is a lack of such applications, we directly become one of the obvious choices where to order food and grocery products. Moreover, our loyalty program gives us opportunity to have our own client base, analyze their preferences and provide specialized offers. Combination all of this, with the big assortment and high–
quality products, making SPAR Kaliningrad the best and biggest supermarket chain in our region.
V. Interview from Promotion Director of s.r.o. Naturovo Express Viktoria Semenyuta
1. History of ‘Naturovo Express” in the market of food retail.
Naturovo Express is a food delivery service. We have our own channel of offline markets markets where we sell our natural and healthy category of products. We have also our big agro–factory when we grow our products.
Six years ago, in July 2015, the Naturovo agro–factory launched the first express food delivery service in Kaliningrad to the home. Now, instead of daily exhausting shopping trips, Residents of our city have a long–awaited opportunity to purchase all they need without leaving their home or office.
2. Development of the online store. What is the rationale behind the decision?
The rationale of development of the online store is creation of one online channel we can provide all our products. We are also selling the ready–made meal which is very popular nowadays. As many restaurants and café’s are working only to go, or serving only limited amount of people so we noticed that people mostly order ready–made lunches.
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Moreover, online store helped us to attract new customers. To be hones after online store implementation we had a rocketing result. Considering, that we had several small stores in our region, the results and promotion was very impressive. More than 40.000 buyers have come our regular customers.
3. Have the sales improved after implementation of the online store?
Yes, as I’ve mentioned we attracted a lot of new customers. We noticed that people in Kaliningrad very much prefer the natural and healthy products. It can be explained that in the grocery stores and supermarkets mostly the products including synthetic or artificial ingredients. In our turn, we grow our products in our agro–facbric without any additives.
We have only natural and organic products and people like it.
For 2021 year we noticed the increase in our sales by 120%. The pandemic situation increased our sales a lot. Moreover, we have a lot of couriers, that is why we can server per day a lot of amount of orders.
4. Talking to special offers, do you have such discounts or loyalty programs?
No. To make an order the customer should authorize but there is no discounts or bonuses included on the profiles. The discounts can be done for all in our online store. Customer’s also have opportunity to track the order.
5. What are the main networking channels for customers to get in touch with the company regarding the service and online store improvement recommendations? What are the most popular question from the customers?
The main channel is our phone channel. Elderly people find it more convenient to make orders by phone calls rather than in online store. So we have also managers that are accepting orders by phone. What regards communication, we have business accounts in all social networks: Vkontakte , Facebook, Instagram and promoting our business and products on these platforms. So the second most popular communication channels are social networks.
The least popular channel is our email channel, where me mostly receiving business offers about catering.
6. Do you sell your products on other marketplaces?
No. We sell our products only in our online stores and in our physical markets.
7. Has Covid–19 and anti–pandemic regulations affected the demand and company’s activity?
Yes. Our sales have grown a lot during the pandemic. When there were lockdowns we were working very actively. We noticed a tendency that since the pandemic people started to buy more organic and natural products, and for now they mostly prefer online purchases with the delivery. So people started more to focus on their daily tasks, and our service giving them opportunity to do that.
8. What possible improvements you plan and expect in new future regarding to the online store?
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We plan to expand the number of our couriers and expand our assortment. For now our assortment includes 700 items of natural vegetables, fruits, farm, dairy products, meat products, drinks, cereals etc. and also 50 fresh ready–made.
We also plan to expand the number of our couriers to process and server faster. For now the delivery starts from 40 minutes. We want to minimize the time and deliver faster. The minimal order price for delivery is 590 RUB.
9. How internet store helped you to gain competitive advantage?
Online store and not only the store, but our all-online channels, and media, helped us to increase our awareness among the inhabitants of our region. We are specialized store who took his niche of natural and organic products. The online channel gave us opportunity to make a good marketing and increase our sales. As a result, we and our big competitors, noticed that people are willing to buy more natural products. They trust our products so they can easily order the products online and be sure that the quality will be very high. As we have only 6 small stores in our region, the online platform is the main channel where we process the orders and provide service to our customers.
Without it less people would know about us and less order would be processed per day.
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