It’s not news anymore that the way Brazilians shop has been affected by the digital channels. Recently, research has shown that even the traditional grocery shopping has been losing space to e-commerce. As a leader in the subject, the GPA analyzes the future of the segment and reveals how to prepare to continue beating the competition.

Last edition of the fair APAS Show, the biggest event of supermarkets in the world that happened in the first week of May in São Paulo, left no doubt: the digital era is also present in the supermarket sector. This year’s edition was focused on the technologies that concern innovation of the supermarkets worldwide.

To understand how interesting this event is, during the four days of the fair, there were more than 100k people: 23,8% more than 2018’s edition. In the list of the new features we can highlight the mats that automatically read the product’s barcodes, virtual reality, self check-out and independent stores like Amazon Go. A good brazilian example of the last one is Zaitt, the first convenience store following the independent model in Vitoria-ES.

It arouse curiosity and soon had photos and videos spread all over social media. After all, the people from São Paulo wanted to understand how to buy things without the need to go through a cashier. “Clients today look for convenience and the experience”, analyzes Fabrício Cardoso from the consulting company EY. “That’s why innovating initiatives drag so much attention”.

Online grocery shopping

As for those who don’t enjoy grocery shopping in the traditional way, that being wasting time and long minutes at the cashier line, there are apps like Rappi to solve their problems. In just a few clicks, wherever you are, it’s now possible to buy groceries and have them delivered to your home – with the upside of having your credit card integrated into the system.

The latest analysis was done to exclude all doubts from those who didn’t believe in the beginning the new way of shopping would be a national success. According to a study by the Supermarket Association of São Paulo (Apas) and the Intelligence of the Brazilian Institute of Public Opinion and Statistics (Ibope), 15% of the Brazilians already buy their groceries via digital channels.

This market is, for sure, full of growing potential. Over here, online foodstuffs sales represents 1% of all food sales. In countries like China and England, for example, the representativeness is enormous: 30% and 12%, respectively.

The coverage has been growing nonstop and it fits as a little push towards changes on the focus of the supermarket chain. Now, they give more attention to the omnichannel customer – the one that traffics through both physical and digital environments.

As evidence we have the big battle between two of the biggest groups in the sector, Carrefour and GPA – owner of brands like Pão de Açúcar and Extra – that fight to see who wins the most in the online market and the loyalty of generations that appreciate a lot a good innovating shopping experience.

The french group Carrefour, that made R$56,3 billion in 2018, announced the creation of a new business segment aimed to a digital transformation focused on food selling. Named Carrefour eBusiness Brasil, it arrived to steal GPA’s thunder that, despite being the second biggest company in the sector with a R$ 53,6 billion profit in 2018, is the leader in the digital area.

GPA’s actions on the e-commerce started way before Carrefour – which unstably settled itself only in 2016. Pão de açúcar, for example, was settled in the digital channel in 1995 and has been investing for a few years now on technology and relevant initiatives, like its app, that offers a unique promo system and rewards for its clients.

To focus on the omnichannel customer has been leading the priority list of Pão de Açúcar. In some units, for example, there’s some kind of lab to test the products and services – the chosen consulted public was the Millennials and Z.

“Brands finally understood that they must attend this new customer and need to be present at all rounds”, analyzes Fabrício Cardoso.

The new generations prioritize comfort and want to have some kind of autonomy in the way they consume. GPA’s current shopping ecosystem gives the clients two options: to shop online and have it delivered to their homes or order online and withdraw their things at the store.

Nova forma de consumo

Scan & Go: allows the client to scan the product’s barcode and pay via the app

There is another model in test phase: the Shop & Go. “the client goes to the store to shop but leaves his cart there to be delivered to the designated address”, notifies Antonio Salvador, GPA’s director of digital transformation, in an interview to CWS.

Check out the main passages of the interview with the executive of GPA:

CWS: In December last year, GPA bought a startup called James Delivery. What caused this deal?

Antonio Salvador: The acquisition of James Delivery is part of the omnichannel strategy of GPA, once the customer nowadays look for better shopping experiences in all segments. That allowed the company to enter a new sector, the superapps – platforms that let users receive in an hour products from all source of partners like supermarkets, pharmacies, restaurants and others. This new proposition complements the other delivery categories of the group. The decision to buy James is also based on our wish to develop that new category on our business coordinated with the market’s evolution nationally and worldwide, with our goal being to offer a better shopping experience to our clients, long-term.

CWS: Now, six months later, what’s changed in the operation?

Antonio Salvador: With that deal, we invested on a unique personalized service for our clients, since James Delivery became the official delivery platform of the brands Extra and Pão de Açúcar. Initially, the platform was available only in Curitiba – Paraná, where it was created, but now it started to expand to São Paulo. It is estimated that until December this year we can attend the entire city, plus other ten cities in Brazil. There’s a massive expansion of services plan so clients from Extra and Pão de Açúcar can also have that option to purchase their favorite products in a more practical and faster way.

Nova era

Antonio Salvador: “GPA keep its innovation and growth strategies grounded in the digital transformation”. Photo: divulgation

CWS: Online food shopping has already reached 15% of brazilians. Does GPA believe this category will overcome the sales of the physical stores?

Antonio Salvador: Although, there is a convergence between the digital and the physical and that is a scenario that’s already a reality and only tend to grow in the next few years, also we already identified a significant mobile participation on grocery shopping. The client’s relationship is more with the brand than the channel itself – he wishes to shop at Extra or Pão de Açúcar and, in order to do that, he goes to the physical stores, or uses the app, an e-commerce, it depends on the moment. For that reason, all channels continue to coexist and GPA will continue to offer all those options while there are demands. The client is free to choose which way is the most convenient for him on his routine.

CWS: So, unlike what we know on clothing retail sales, supermarkets don’t tend to shrink and become withdrawal spots…

Antonio Salvador: In the supermarkets case, when it concerns food, the sensibility is higher. Despite the tech innovations and constant changes on the ways of consumption, the relationship is still human and the convergence process between the digital and the physical becomes more and more concrete. We need to be prepared to serve all kinds of profiles and shopping moments and the physical store ends up playing a big role in the process – even if it is as a showroom or a selling spot for clients that still feel the need to have a physical contact with a product, for example.

CWS: GPA has also been investing in startups. How has the partnership being?

Antonio Salvador: We have been investing a lot on startups, like Cheftime, the first foodtech to close with GPA. They used to sell gastronomic kits exclusively via e-commerce and, since November 2018, they provided the products to stores of Pão de Açúcar, including exclusive recipes for the chain. Recently, GPA formalized associations with other foodtechs, offering special conditions for them to sell their products in their retail net. Today, more than 200 products of those companies can be found at the shelves in Pão de Açúcar and Extra.

CWS: How has GPA been dealing with the payment alternatives?

Antonio Salvador: GPA created and has been improving some initiatives. One example is Scan & Go, that is in a test phase in a store Minuto Pão de Açúcar and allows the client to scan the product’s barcode and pay via the app Pão de Açúcar Mais. there’s also Self Check-out – a cashier option in which the customer himself scans and pays his groceries, with no interaction to an employee – that’s already operating in some stores from the brands Compre Bem e Pão de Açúcar. Shop & Go is still in pilot test phase, in which the client does his shopping at a physical store and leave the cart to be delivered after to an address of his choice (payment is done at the deliver).

CWS: Will the digital transformation keep being the main path to win the market?

Antonio Salvador: Yes, GPA keep its innovation and growth strategies grounded in the digital transformation, always focused on the multichannel action. For that reason, it will continue to invest in different forms and initiatives that facilitate and improve the customer’s shopping experience.

(Published June 2019).