3.1. Customers behaviors and needs
Understanding and analyzing the needs and behaviors of the general French population will help us to determine the characteristics of our target groups. If this targeting is done efficiently, we will be able to offer, since the very beginning, a successful service, that will be frequently used in the partner companies. This way, we will be able to achieve our objectives and to quickly gain in popularity.
Describing the population’s behavior concerning the online shopping, we can say that people tend more and more to buy on the Internet any product whenever they need it. 59% of the French population today state that they don’t wait anymore to go to a store to see physically a product before buying it online.13
Because of this changing way of buying, we can consider that people would be more and more disposed to do their groceries shopping online, but the reality is slightly different. Indeed, several elements still constitute an obstacle to the democratization of the online shopping of groceries, and we have mentioned these elements in the previous part. To summarize them, we can say that the main elements are linked to the high delivery costs and the minimum order, that are considered too high by most of the consumers. Also, the services of delivery at home are offered on time windows of 1h30 to 2 hours, which is a too important constraint for most of the consumers. Finally, consumers regularly mention the fact that they like to choose their products according to the maturity (for vegetables and fruits), and according to the expiry date (for the rest of the products). And, it is very difficult for retail groups to enter these kinds of information for all the products that they sell.
13 La Rédaction. (2019, April 4). Comment la livraison à domicile pousse les acteurs de la distribution à se réinventer ? [Tribune]. Retrieved April 5, 2020, from https://www.lsa-
conso.fr/comment-la-livraison-a-domicile-pousse-les-acteurs-de-la-distribution-a-se-reinventer-tribune,315956
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Considering that the new needs of the customers in France being that they look for small number of products, at low prices, and usually of last-minute, we can easily understand why the services currently offered don’t have the success that they would normally expect.
On top of this, when describing the consumers behaviors, it is important to mention again that the consumers living in big cities barely have access to hypermarkets and discounters, and they are most of the time obliged to do shopping of small quantities of products, in the nearest mini-market to their home, which forces them to always pay the high price.
Finally, even if French people tend more and more to eat outside, they still prepare food at home, for most of their meals. In 2019, 1 out of 7 meals was eaten outside, or from outside (restaurant, delivery, ...). This value was representing a decrease of meals prepared at home compared to the previous year, because in 2018, 1 out of 8 meals was eaten outside, or from outside. This decreasing tendency might be explained by the growing development of prepared meals delivery services (UberEats, Deliveroo, …), but also by the fact that retail stores didn’t convince their customers with their delivery offers. However, this value shows that French people tend more to cook at home than their neighbors, because Spanish, Italians and British take on average 1 out of 5 meals outside.14
3.2. Target partner companies
When coming to the strategy of targeting of our customers, it is important to divide it into two categories: the companies, and the type of workers.
The choice of the companies with which we will create partnerships is important. If this choice is not consistent with our strategy, high costs might be incurred for the setup of lockers that will not be used as forecasted, in the end.
14 Godart, N. (2019, February 10). Les Français mangent toujours plus au restaurant. Retrieved April 14, 2020, from https://www.bfmtv.com/economie/les-francais-mangent-toujours-plus-au-restaurant-1627507.html
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In order to touch workers that will present a need for our service, we want to create partnerships with specific companies:
Head offices of corporations of any industry
Consulting firms
Bank or insurance companies
This choice is linked to the fact that, in these companies, in France, most of the workers stay at work until late. For the bank and insurance companies, they stay most of the time until 11pm, or even later. In consulting firms, it depends on the current mission of the workers, but, most of the time, they need to stay at least until 8pm. Finally, the head offices of corporations usually have gathered workers from different departments, and, depending on the size of the corporation, an important proportion of workers usually stay until late. We target these companies specifically because, for workers having these schedules, it is hard to find some time to do the groceries shopping. This issue is emphasized by the growing number of dual-income families, in which both mother and father might have a similar schedule, and in which, sometimes, children need to be looked after.
Another characteristic that will be important in the selection of the companies, is the number of employees. Indeed, our lockers can be bought in blocks of 12 lockers. The objective is to settle, in each of our partner companies two of these blocks.
We estimated that a majority of the customers’
orders will occupy 2 lockers (when exceeding 30 euros). This is why, we forecast to enable 15 employees per day, in each company, to use our service. Targeting only companies of more than 150 employees would permit us to lower the risk of not meeting our forecasted demand. The first months of operation of our service will be important, in order Figure 4 – Our blocks of 12 lockers
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to understand whether we should also work with companies with less employees, or not, and if we should settle more lockers, when possible, in the companies of more than 150 employees.
To create the partnerships with the companies, we will make use of the argument that employees would be more efficient and happier at work if they had access to this type of service. Indeed, we consider that employees having the working schedule described earlier already have enough stress at work. Considering that besides the work, they need to think about what they are going to be able to cook during the night, when and where they will buy the products, and even, for some of them, which products they have left at home for their children, it usually makes that they don’t have much time to relax during the week. By offering to the employees of a company the opportunity to use this service, we take a weight off their shoulders. Also, we aim to improve employees’ satisfaction with their employer, because they might be grateful that efforts are made, in order to improve their comfort. Moreover, an employee planning to make his shopping before coming back home, has the necessity to leave work before a certain time. But, if his groceries products are directly brought to his working place, he will have less pressure regarding the time he should leave. To create the link with the companies, we will need to communicate with the employee representative committee (Comité d’Entreprise) of each of them. This committee is composed with the employer, some elected representative employees (usually 4 in companies of around 150-200 employees), and union representatives. This committee takes decisions in order to improve the life of employees at work, and to offer them activities, services, or even discounts on events.
3.3. Target customers’ characteristics
In order to have a more concrete knowledge about our specific customers, a questionnaire was shared among workers from five different companies. In total, 85 responses were collected, and 83 of them were relevant (2 answered that they were not living in a big French city). From these 83 relevant answers, an analysis was performed, and it helped us to have a better understanding of the concrete needs of the customers, and to segment the future customers according to their socio-demographic characteristics. Obviously, these 83 answers are not representative of the global population, but it was not easy to gather relevant answers, since we are targeting workers from very specific companies.
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However, some elements of this study can still be used, because they permit us to understand which characteristics seem to be the most relevant. Respondents were split, in the questionnaire, according to the fact that they already do their shopping of groceries online, or not. Among the respondents, the range of age where the most cyber-purchasers have been found was “35-45 years old” (50% of the respondents). On the other hand, the “18-25 years old” group was the one with the least cyber-purchasers (30.8% of the respondents). This might be explained by the fact that the youngest generations never felt the necessity of buying on the Internet, because the online services for the groceries shopping are mainly used because of the comfort they offer.
On top of this, in this range of age, the revenues are usually very limited, and the cost of buying the groceries online is so high, that it is not beneficial for them to use such service. Also, comparing the average number of people in the household for the cyber-purchasers, and the non-cyber-purchasers, we can observe that, when the number of people in the household is growing, the probability that the respondent is a cyber-purchaser is also growing.
We can also observe with the questionnaire’s answers that only 15.7% of the respondents would not be interested in the service of delivery of groceries shopping at their work. And, this value is even lower among the cyber-purchasers (only 3% answered “No”). This proved that the cyber-purchasers are easier to convince, because of their confidence in the delivery of groceries shopping. With 24% of “No” answers, the non-cyber-purchasers will be more difficult to convince, and they will need to gain in confidence. Pushing further the analysis, we tried to know if the interest in the service was dependent of the age of the respondent. The following table summarizes the results.
Table 2 - Table "Age" X "Intersted in the service?"
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The percentage of people answering “No” is growing, as the age goes up. The high percentage of respondents answering “Maybe” to this question, among the “18-25 years old” group is an indicator that, even if most of them are not cyber-purchaser, they could be willing to change this habit if the service offered is convincing enough to them. As a conclusion from the above table, the younger generations seem to be more opened to innovation, and even if they are not the ones buying the most on the internet, they seem to be more interested in discovering a new service than the older generations.
3.4. Pricing
Determining the price of the service will be key for its success. From the survey answers, we observed that 55.9% of the cyber-purchasers were selecting their cyber-market according to its prices. Among the non-cyber-purchasers, 43.8% answered that the price would also be a main characteristic for their decision whether to use the service, or not.
For this service, when coming to a decision on the price, two elements must be distinguished:
the delivery fees, and the price of the products.
In order to determine the cost of delivery, we know that it will be very low for us, for reasons that will be described later in the logistics part. Also, in terms of price of the products, the fact of buying directly from a wholesaler will permit us to obtain the products at a very low price, compared to what they would cost in a supermarket. We estimate that the price of a shopping cart in Metro is on average 16% lower than in a supermarket, and 12% lower than in a hypermarket.
To make a margin with our service, we evaluated two different options:
Offering the products at a similar price as in the average supermarket inside Paris, and making customers pay around 2.50 euros for the delivery
Offering a free delivery and increasing the price of the products by about 5 to 10 percent, compared to the average supermarket inside Paris
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To make our decision, we used information provided by the results of the survey but also by previous studies.
A French magazine named Les Echos realized a study in April 2019 on a sample of 1,400 people, all living in major French cities, concerning their opinion on the services of delivery at home of groceries shopping. 64% of them answered that they would buy online groceries shopping on a regular basis, if the delivery fees were more reasonable. But the most interesting element raised by this study is the fact that 80% of the respondents declared that they wouldn’t change the composition of their shopping cart, and that they would sometimes buy online if the delivery fees were included in the prices of the products.15 This is for this reason that, after consideration, we want to offer a free delivery, as an incentive for people to buy online, and to increase the price of the products, compared to their regular prices. Psychologically, setting a delivery fee also gives to the customer a “value” of not going to the supermarket and picking up the products by himself. Whereas, including the delivery fees in the products’ prices, most of the customers wouldn’t even notice the slight difference on each product, but only on the global shopping cart.
For the decision on by which percentage we should increase the prices of the products compared to their average price in the Paris supermarkets, the following question was asked in the survey:
“If the delivery fees were free, how much would you be willing to pay for a shopping cart that would cost you 25 euros in your supermarket?”. 4 options of answers were proposed to the respondents: “Less than 26 euros”, “Between 26 and 27 euros”, “Between 27 and 28 euros”,
“Up to 30 euros”. In order to have an idea of the average price answered by the respondents, answers have been transformed respectively by the values: “25.5 euros”, “26.5 euros”, “27.5 euros” and “29 euros”. With all these values, on average the respondents said that they were willing to pay 26.67 euros for a shopping cart that they pay 25 euros in their supermarket.
Among cyber-purchasers, this value was 26.95 euros, and among non-cyber-purchasers, 26.48 euros. After further calculations, we can conclude that for a basket of products of 25 euros, if the price offered on our service were 26.25 euros, we would have 5% margin on each product,
15 Relaxnews. Livraison à domicile : et si le tarif était inclus dans le coût des courses alimentaires ? Retrieved from https://www.lindependant.fr/2019/08/19/livraison-a-domicile-et-si-le-tarif-etait-inclus-dans-le-cout-des-courses-alimentaires,8367148
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compared to the supermarket price. And, at 5% margin, we could offer a price that more than 78% of the respondents are willing to pay.
3.5. Promotion
The promotion of the service inside the companies will not be very difficult to manage for us because we are planning on asking to the partner companies to share an email with all the employees, in order to announce them the new partnership and the creation of this new service offered to them. The employees will easily and rapidly know about our service, because of the word-of-mouth, and the presence of the lockers in the building. Also, our service is easy to use, and a simple access to our website will enable each worker to know what to do to receive its groceries shopping for the first time.
The only challenge for us, in the beginning, will be to push the workers to make their first order online. It will be particularly essential in our case, since a majority of the workers are still non-cyber-purchasers, and for them, the opinion about the service from a co-worker is important.
We know this thanks to the answers collected with the questionnaire mentioned previously.
Indeed, 45.8% of the non-cyber-purchasers selected the co-worker’s opinions as a decision criterion to choose whether to use, or not, the service. The most selected criterion (selected by 70,8% of the non-cyber-purchasers) was “The easiness and good organization of the service”, which shows that gaining their confidence and showing them that the service is easy to use, and well-organized, will be our main challenge when promoting it.
In order to ensure that we will have some workers using the service since the first days of operations, we will, on top of the internal communication made by the company, distribute to each employee a flyer, describing clearly the steps to be performed, in order to receive their groceries shopping in the company. The flyer will also contain a scratch card. 20% of the cards will provide the workers with a discount code giving a free shopping of groceries up to 25 euros.
10% of them will provide the workers with a discount code, giving a free shopping of groceries up to 50 euros. And the rest of the cards (70% of them), will provide to each worker a discount of 10% on their first order. All the discount codes will only be usable once, during the 30 days following the distribution of the flyers.
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This technique is designed to ensure that at least 30% of the workers will have incentives to make their first order on the website. And, among the 70% of workers with a 10% discount, we consider that most of them will want to try the service, and even more if they are already cyber-purchasers.
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