Interview • 05.05.2014
"Many customers are not ready yet to shop groceries online"
Interview with Alexander Graf, Kassenzone.de
The Kassenzone.de (English: Checkout Zone) blog was started in 2008 by Alexander Graf and Florian Hermsdorf and covers developments of online business models. In this iXtenso interview, e-commerce expert Graf, who already among other things oversaw various online corporate development projects for the Otto Group illustrates the opportunities and challenges of the still young online food sales sector.
Mr. Graf, what specific challenges are retailers that want to get into online food sales facing?
They are facing several challenges. The primary challenge is perhaps the fact that a good portion of potential customers are not ready yet to shop for their groceries online. Added to this are the lack of services by logistics service providers and the incredibly low profit margins in the food industry in Germany. Things couldn’t be more difficult.
There are currently several pilot projects in this area. Do you think there are business models that are already capable of boosting online food sales in this country?
From my point of view, the five big grocery store chains in Germany (Metro, Schwarz, Edeka, Rewe, Aldi) are waiting to see, if one of the other chains is making the big move towards online food sales. Nobody wants to force this, which is actually a smart thing to do given the circumstances. I believe the models by smaller suppliers only have niche market potential. I would advise startups to completely avoid this market.
REWE CEO Alain Caparros expects an online food sales percentage of 10% by 2020. Do you think this estimate is realistic?
I have also seen this number a lot and a recent study by E&Y supports these numbers, but nobody is able to reasonably justify them. This could only be achieved, if a full-line provider starts online in 2014, doesn’t charge shipping costs and gets a handle on the various logistical issues (cold chain, delivery times, returns, availability) at a level similar to Amazon. Is this likely? No!
From your point of view, how is this e-commerce sector going to develop in the upcoming years? Can online food sales take hold?
Yes, food retailing is also going to take hold in Germany, but most likely at a much slower pace than expected. After I have closely watched the online activities of the big chain stores, I suspect that the big breakthrough is not going to be made by these chains. Therefore, this is once again another easy feat for Amazon.
Interview: DAniel Stöter, iXtenso.com
channels: online trading
