The « hairy » assumptions of LeShops` business plan

from utopia to reality…
CTI Invest, CEO Day Sept. 20th
[email protected] – CEO LeShop.ch
The « hairy » assumptions of
LeShops’ business plan
1998-2004: Gain market leadership in online food
retailing by challenging and winning over Migros & Coop.
1999 : Sell fresh fruits & vegetables per internet to
women and have the Swiss Post delivering them.
2002: Survive the burst of the internet bubble and refinance the company within 20 days during christmas &
new year.
2003: « The mouse eats the elephant ».
2006: Online food retailing, a truly profitable business?
[email protected] – CEO LeShop.ch
1
We believed is was fairly easy to innovate
considering the value proposition of traditional
supermarkets was so poor.
poor.
For grocery shopping in traditional B&M supermarkets, this is what
an average customer is bound to perform every year :
– Log 3 tons of groceries home!
– Stay 1 week standing in a queue!
– Stroll 45km through crowded aisles!
– Search for your prefered products when
25% of the assortment changes every year.
– Manipulate and pack 10‘000 items!
– Burn 260 liters of gas in traffic jams!
– Fight 120 times for a parking lot!
– Make you feel you make a deal when
you still spend € 10‘000 a year in groceries.
[email protected] – CEO LeShop.ch
Our Techno Website 1998
advertising
banner
advertising
banner
special
offers
2
The reality of an online supermarket
The reality of an online supermarket
Christian Wanner – CEO LeShop.ch
3
That’s how we started (1998-99)
2001 : Automated warehouse layout
[email protected] – CEO LeShop.ch
4
Regional Confectionning Center :
Bremgarten (AG)
[email protected] – CEO LeShop.ch
100 tons of food delivered every day.
[email protected] – CEO LeShop.ch
5
Value proposition :
1’500 dry grocery products.
27 out of the TOP 30 products sold are fresh produce or
dairy and meat!
meat!
Assortment : 7’500 products
Average basket value : Sfr 217.Fresh product penetration : 90%
1
BananenMaxHavelaar;MaxHavelaar
2
DieButter250g.;-
Früchte & Gemüse
16
Longobardi;-GehacktegeschälteTomaten400g;
Milchprodukt
17
ÄpfelMaigold;Schale
Früchte & Gemüse
3
4
5
Rispentomaten;Schale
Früchte & Gemüse
18
Zwiebeln1kg;Netz
Früchte & Gemüse
Chicorée500g;-
Früchte & Gemüse
19
6 SchweizerEier;Bodenhaltung
Karotten1kg;-
Früchte & Gemüse
20
Clementinen2kg;-
6
Broccoli;-
Früchte & Gemüse
21
M-Budget;-Toilettenpapier18Rollen;-
Trockenartikel
7
Valflora Milch-Drink4x1Liter;4x1Liter
Milchprodukt
22
6SchweizerBioEier;Freilandhaltung
Milchprodukt
8
Fenchel;Schale
Früchte & Gemüse
23
Jogh.Mokka2x180g;Mokka
Milchprodukt
9
Gurke400g;
Früchte & Gemüse
24
BrumeZopf400g;-
10
SalatIceberg300g;-
Früchte & Gemüse
25
ÄpfelGolden;
11
M-Budget Milch2lUHT;UHTVollmilch
Milchprodukt
26
FloralpVorzugsbutter200g.;-
12
BananenChiquita;Chiquita
Früchte & Gemüse
27
ÄpfelGala;süsslich
Früchte & Gemüse
13
Zucchetti;Schale
Früchte & Gemüse
28
Peperoni3Farben;
Früchte & Gemüse
14
CherryTomaten250g;
Früchte & Gemüse
29
MeloneCantaloupe;
Früchte & Gemüse
15
OrangenMoro2;5kg;
Früchte & Gemüse
30
HopiClassicHaushaltspapier4Stk.
Trockenartikel
Milchprodukt
Früchte & Gemüse
Brot
Früchte & Gemüse
Milchprodukt
Trockenartikel
Status 2006 1.1.-23.3.2006
[email protected] – CEO LeShop.ch
6
2004 : « dream assortment » for the
Swiss household.
[email protected] – CEO LeShop.ch
our business objectives
Î
No. 1 in Switzerland
• be the first virtual grocery shop in Switzerland operational by the
first quarter ‘98
Î
CHF 100+ Mio turnover in 5 years
• achieve 5+ Mio turnover in first year and 100Mio by 2003
Î
70’000+ customers in 5 years
• build a customer base of 15’000+ in year 1 and 70’000+ by 2003
(equivalent to ~10% penetration on core target group)
7
Online grocery in 2006 weights more than
Sfr 100Mio
Swiss Market Sales Growth in E-Groceries
(Mio CHF)
120.0
100.0
Mio CHF
+ 48%
60.0
40.0
20.0
Estimate
+ 49%
80.0
+ 58%
+ 31%
+ 27%
MIGROS
+ 54%
MIGROS
-
2000
2001
2002
2003
2004
2005
2006
[email protected] – CEO LeShop.ch
E-grocery in 2005 in Europe :
€ 2,2 billion sales (+18% vs. YA)
€ 66 Mio
0,24% of retail
€ 1’600 Mio
1,26% of retail
Inactive
market
€ 200 Mio
0,14% of retail
€ 50 Mio
0,20% of retail
€ 250 Mio
0,42% of retail
Inactive
market
ONLINE SUPERMARKETS
[email protected] – CEO LeShop.ch
8
Switzerland has still a potential to grow
by a factor of 6 to catch up with UK.
Theoretical Unexploited e-Grocery Potential in Europe vs. UK market in 2005
source : LeShop.ch Industry Research, September 2005
0.21%
Switzerland
Unexploited Potential :
€ 246
Die Schweiz hat noch ein
unausgeschöpftes
Potential von €246MM !
UK development as a benchmark
for other markets
1.26%
UK
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Falls in England bereit 1.26% des Detailhandelsmarktes Online abgesetzt werden, wie
gross wäre das Potential in anderen Ländern bei gleichbleibendem Prozentsatz?
[email protected] – CEO LeShop.ch
The Future is exciting for e-grocers :
Services : Margin with no
logistic costs.
Non Food : Basket size and
Margin
Groceries : Volume and
Frequency -> Loyalty.
Understand much deeper the customer dynamics and
expectations.
Much further Mass-customize the product offering, the pricing,
the promotions and the communication.
Maximize the Share of Wallet in groceries but also leverage
the relationship to sell all other product categories.
[email protected] – CEO LeShop.ch
9
Thank you !
Christian D. Wanner
CEO LeShop.ch
[email protected]
[email protected] – CEO LeShop.ch
10