The growth of online groceries presents great challenges. Financial director Ton van Veen of Dutch retailer Jumbo: “This is a substantial loss-making business model. Everyone knows that”. Van Veen states that the logistical process behind grocery delivery is costing too much.
CFO Van Veen says this in an interview with the Belgian edition of CFO Magazine: “With traditional shopping in a physical store it is the customer who takes care of the most expensive part of the supply chain, he comes to the store, after all the place where the supply is centralized, collects his own products, pays immediately and takes care of the transport home. By offering exactly the same things online, we integrate this final phase of the process back into our supply chain. Without any financial compensation.”
Major loss-making business model
Van Veen: “You can suggest that the grocer did the same decades ago, but the prices were much higher then. With the arrival of self-service stores, this phase of the supply chain was taken over by the customer. With online sales, the reverse is happening today. A consumer simply does not want to pay for this anymore, and even more so: people expect that online will be cheaper. This is a major loss-making business model, everyone knows that. That is why we strongly believe in an omnichannel approach. The customer wants to do the shopping when he wants to, period. That must be the starting point. During the week that is with smartphone, tablet or computer, while he may want to be inspired in a physical store during the weekend”.
Source: CFO Magazine/Logistiek.nl