The famous "survival of the fittest" is not only applicable to the field of biology.
Thousands of kilometers away from Darwin's evolutionary theory, traditional retail works in its forced transformation so as not to be phagocyted by the unstoppable growth of ecommerce, which has already "put on" firms of the likes of Ribeiro or Musimundo and left on the edge from the precipice to almost all the others.
In Argentina, the economic crisis fractured the structures of many retailers: if the sales were going down due to the greater competition of the online channel, the collapse of the billing pushed the vast majority to have to make a central decision: speed up their transformation plans digital.The numbers speak for themselves:
- In shops, shopping malls and electro chains sales have suffered a collapse of up to 16% and bashed 12 consecutive months of fall
- In return, ecommerce grew by almost 60% during the first half, more than double the accumulated inflation in that period (22%)
Garbarino, the largest appliance chain in the country, went ahead of the rest of the platoon and turned its web business into a renewed marketplace where it literally sells "everything".
After restructuring his debt of more than $ 4,000 million (which allowed him to cut $ 2,400 million of his liabilities) he placed fifth thoroughly with his "Plan Avocado". This move was nothing more than the presentation in society of its omnichannel strategy, which combines its online and offline sales infrastructure with its logistics to companies that want another window to offer their products.
What does omnichannel mean? The integration of all existing channels of the company so that a customer who initiated a communication (or a purchase process) by one of them can continue it in another.
The reference to avocado, a favorite ingredient of Mexican food, is not accidental: the company opted for this product to viralize on the networks the concept that anything the consumer wants can be found on their platform.
In addition, with this project it aims not to lose track of Mercado Libre, undisputed leader of the sector. In a first stage, the main aspiration is to become the # 2 market, since today it is disputed by several brands, but still without a firm winner. The result of the "operative change of look" had a full impact on its website: the visits grew 50% and had a favorable impact on the sale of its new products. As an anecdote, the avocado stock ran out.
A month later, the marketplace had its great litmus test: Cyber Monday 2019. "We invoice three times that in Hot Sale, where we already had active service. The number of units sold on that date also tripled," he celebrates. Franco Lacrampette, head of Marketplace of the company.
The key to the boom was, precisely, in the expanded offer of products. In times of skinny pockets, the lowest value ticket was the big driver in billing associated with the last great discount initiative of the year. Adapt or die, without more.Reconversion, the key
"The good thing about having developed and launched our strategy long before Cyber Monday is that it allowed us to leverage in categories that have been growing much more than the‘ electro ’," the executive tells iProUP.
In that line, he says: "Retail that could not be transformed stayed out. On the other hand, if you have a marketplace you can enjoy that growth: today electro is not a necessity; yes, instead, they are categories like ' food 'or' pharmacy '".
The "best seller" of the first week of November is proof of these new consumption habits: the leader in sales within the new "online supermarket" of Garbarino was not a TV or a smartphone, but a deodorant. He even used up his stock of diapers."Pharmacy and Beauty was a monster in sales. As we have the virtual cart, people bought 10 or 15 units, simulating a supermarket," he reveals. The key, according to Lacrampette, was to offer free withdrawals in branches and delivery in 24 hours, fundamental in this type of products, since nobody would wait more than 2 days for a spray can.
Although the manager admits that he lowered the average ticket, he clarifies that they are not worried since, in the first place, the billing grew and, in the second order, it is logical that the ticket goes down by having as an immediate reference to its appliances division.
"We were building throughout the year. We made‘ noise ’with the avocado and now we transformed that event into sales," Lacrampette celebrates. It was not a simple project: it involved registering hundreds of suppliers and developing a commercial strategy for new categories that were not part of Garbarino's native DNA"Just by registering a supplier does not reach. It does not mean that if I am a regular buyer of Garbarino, that is why I am going to buy him a deodorant. I will do it if it is at a good price, if it is delivered quickly and, if I have any problem, I can claim it, "he emphasizes.
At least in the papers, the planning seems to have paid off: while the electro branch had a growth of around 30% in the framework of Cyber Monday, items such as home, clothing, pharmacy and food grew more than 100%.
And the avocados? "It has been selling the same volumes as when we launched the initiative," the executive confesses. The flagship product of the networks stopped being a curiosity to become a habitual resident of its online gondola.
"Today is the company's number one project. We work directly with the presidency, which is 'all in' with this business. This helps us to break structures more easily," says Lacrampette, in charge of the ambitious plan of digital transformation
Thus, the marketplace area works side by side with logistics and customer service, two central pillars of the new shopping experience that Garbarino is polishing. The executive emphasizes that the feedback is given "in a very different spirit: try new things, implement them and measure them, with agile methodologies."
This startup-style concept is not casual. "The goal is to triple the metrics in the first two years and, from the third, grow to double digits. That is, at rates of a 'unicorn'," says Lacrampette, with an eye on Mercado Libre."We set very aggressive goals because we see that there is a space in the market," he completes.Mercado Libre, mirror and rival
Adapting once and for all to the online business is essential for the success of Garbarino's proposal. However, the gaze is on Mercado Libre, the giant of Marcos Galperín who has comfortably dominated the segment for 20 years.Lacrampette has words of praise for its competitor. He knows that it is almost a chimera to overcome it in the game in which he is "the owner of the ball", but considers that there is a lot of space to grow in that field.
"At the local level, there were many marketplaces but none sold, only Mercado Libre did. The only thing you added to the supplier was a problem, more operating costs to sell nothing," says the manager.
The project involved an almost personal relationship with each supplier, planning each movement in detail so that the store was not simply an empty shell.
A survey conducted among all its suppliers reveals that, in effect, the marketplace already "ranks" second in sales, which puts it behind Mercado Libre. In that sense, the first major objective seems to be accomplished.
To achieve this, he initiated an aggressive strategy of "hunting" by item. That is, he went out to "hunt" suppliers of all segments. "We have business executives who manage each category, revealing who are the largest and most important vendors of each one," says the specialist.
In this regard, he clarifies that the onboarding (high) is done by Garbarino herself since her marketplace, unlike Mercado Libre, is closed. "We work directly with the brands or their distributors. They must be certified suppliers, with guarantee and that invoice their products. Thus, we determine who is authorized to sell," adds Lacrampette.
It is not a minor detail, since the "sellers" who enter the platform can make use of all the Garbarino infrastructure deployed in the country. At the moment, it has already added more than 1,000 new members, representing 20% of the total of its offer and those who are charged a commission of 15% plus VAT.
"We provide logistics service, we start looking for the deposit and the final delivery is made by us," the executive details.
Within the framework of Cyber Monday, 20% of the units sold in the marketplace were products that were already in fulfillment. That is, stored in their warehouses, which allowed to significantly accelerate delivery times.
In that sense, the so-called "last mile" is already solved by its complex logistics network: "The supplier was relieved to do a good part of the operation because we had already stored his product and distributed it from there," he adds.
Its diversified network of stores throughout the country functions as pick-up points, which gives the company a good competitive advantage and also allows it to convert a "heavy" chain of branches (for their costs) in agile centers of Delivery and distribution. Reuse and redefine the use of their spaces, that's what it is about.In this way, 55% of the unbanked population can pay in the company's establishments. At the same time, "you attack that segment of the public that is not yet encouraged to buy online," says the executive.
Today, in 90% of the operations, the client chooses to withdraw at the branch, so that process must be well cured since it is our great differential, "summarizes Lacrampette.
For the remainder of 2019, the company points its guns to "Black Friday", a last day of online discounts, and works on the incorporation of new categories, with the aim of adding sales and new users.
"For example, that at Christmas you can buy the tree, with the idea that the user does not think of Garbarino just for the gift, but for the whole experience of that date," adds Lacrampette. The ultimate goal is, in the words of the executive "to accompany the client in all instances of his life".
The pillars are three: competitive prices, financing and fast deliveries. Any product that can be marketed under these premises, has the potential to enter the platform. In other words, the possibilities are endless.