On course for growth: LeShop.ch increases sales by 4.6 percent

The biggest Swiss online grocery retailer is again showing strong growth in 2016: during the first six months of the year, customers spent 93.6 million francs at LeShop.ch, Migros’ online supermarket. This corresponds to a 4.6 percent growth in sales compared to the previous year. More precise delivery times, larger regions for daily deliveries and an extended PickMup collection point network have driven this growth. 40 percent of orders were placed via a phone or tablet, one percent point more than last year. The sales of organic and Alnatura products grew disproportionately, as did food sales for allergy sufferers.

At the end of the first half of 2016, LeShop.ch again achieved a sales record: the online supermarket operated by Migros delivered shopping valued at 93.6 million Swiss francs throughout Switzerland; this equates to 4.1 million or 4.6 percent more than the previous year. 40 percent of LeShop.ch orders are placed on smartphones or tablets, which is a growth of one percent point over the previous year. The level of sales at LeShop.ch DRIVE collection stores also grew positively: it exhibited even stronger growth than sales with home deliveries.

It all combines to give LeShop.ch four years of successive growth. CEO Dominique Locher asserts: “The demand for convenience is continuing to grow strongly. Having groceries delivered is becoming the norm amongst the general population.” Figures from the Swiss Online Merchants’ Association (VSV) attest to the growth of the online market: in 2015 Swiss online and mail-order sales amounted to 7.2 billion francs, a 7.5 percent increase from the previous year. ‘Traditional’ sales on the other hand simultaneously shrunk by 2.3 percent.

Geneva and Lausanne also with more precise daytime and evening deliveries as of 2016
Thanks to a continual improvement of services, shopping at LeShop.ch is now even more convenient and offers more precise delivery slots. LeShop.ch has further narrowed the time slots for its deliveries in three large Swiss cities. Customers in Geneva and Lausanne have been able to choose between four short delivery windows between 16.30 hrs and 21.00 hrs since March. The same service has been available to customers in Zurich since October 2015. What’s more, there have been shorter delivery windows since October 2015 in over 40 more Swiss cities. Here, customers can go online in the morning to opt for a midday or afternoon delivery.
The increased number of delivery windows is enabling the online supermarket to reach new customer segments: professionals who only arrive home late in the evening and residents of apartment buildings who don’t want their shopping left outside for hours. SMEs, schools and crèches as well as persons who are at home during the day have made brisk use of the daytime delivery service.

New PickMup collection points
The Migros Group is also in the process of establishing a dense network of PickMup collection points. In doing so, it is linking its vast branch network with the online shops of the Migros Group. Customers can have purchases from retailers like LeShop.ch, Ex Libris, Digitec, Galaxus and Micasa in migrolinos as well as shopping centres and fitness parks delivered to them. LeShop.ch now operates 17 (previously 11) PickMup collection points and is continually increasing this number. The LeShop.ch DRIVE collection centers in Staufen (AG) and Studen (BE) now also double as PickMup collection points. Ernst Dieter Berninghaus, head of trade at the Migros Cooperative Association and LeShop.ch board chairman states: “PickMup is a strategic milestone. We are the first grocer to give our customers the option to shop across multiple store formats. These cross-channel initiatives have allowed us to gain the trust of customers. In rolling out PickMup, Migros is seeking to place 90 percent of the Swiss population within 15 minutes (maximum) by car of their nearest collection point.”

Disproportionately large sales growth for organic, Alnatura, food intolerance and dietary products
Sales of organic products at LeShop.ch have been growing above the norm: compared to the previous year, sales of around 1080 organic, Alnatura, Alnavit (gluten and lactose free, natural juices) and Alviana products (natural cosmetics) grew by 27 percent. Nine out of ten LeShop.ch customers buy an organic and/or Alnatura product. This allows LeShop.ch to contribute to the sustainability concept of the Migros Group. LeShop.ch customers also purchased diet products and foods for allergy sufferers at an above-average frequency: the sales of products in the aha range grew by 18 percent in the first six months.

Potential in the food market – piqued competition
LeShop.ch also looks to the future with optimism. Dominique Locher expects an acceleration of this development. Comprising around 47 billion Swiss francs, the total market for food is the most important – and the one with the greatest online potential. He explains: “The volume of the food market is underestimated: currently only around 1.8 percent of food is purchased online in Switzerland. A single percentage point more corresponds to a sales growth of 470 million francs.”

LeShop.ch — Results 1st half of 2016:

1st half of 2015

1st half of 2016

Performance 2015/16

Turnover
(CHF million)

89.5

93.6

+ 4.1 million / + 4.6 %

CO2 savings* (tons)

658

715

+ 57 / + 8.7 %

Share of orders from mobile devices**
(smartphone, tablet)

39 %

40 %

+ 1 % / +2.6 %

* Collective delivery by LeShop.ch as compared to private shopping trips in a car
** For the month of June

 

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Migros online subsidiary grows by 6,6% in 2015 with 40% of all orders placed via mobile devices

In 2015, sales at the Migros online supermarket grew by 6,6% or CHF 11 million, with customers spending a total of CHF 176 million at LeShop.ch. Switzerland’s largest online supermarket saw revenues increase for the third consecutive year. This growth was driven by smartphone and tablet orders, the expansion of the delivery service and more precise delivery times.

Retailing in 2015 was affected by the strong Swiss franc: many Swiss consumers purchased groceries abroad, and around 10% of Swiss retail trade sales, CHF 11 billion, flowed out of the country, according to estimates by Credit Suisse. The entry of foreign e-commerce portals into the Swiss market put further pressure on prices.

LeShop.ch, however, is delighted to report excellent end-of-year results and record sales: in 2015, grocery sales at the Migros subsidiary reached CHF 176 million, which constitutes an increase of 6,6% or CHF 11 million over the previous year. LeShop.ch’s annual sales have risen for the third consecutive year, confirming the current growth trend. A key contributing factor was the increased use of smartphones and tablets among all age groups – more than 40% of orders on LeShop.ch are placed using mobile devices.

 

More precise delivery times and new collection points

Growth was also driven by the expansion of services for LeShop.ch customers: in June 2015, in collaboration with Migros, the online supermarket began a pilot scheme involving eleven PickMup collection points in Migrolino stores and Migros shopping and fitness centres. Online customers can collect their pre-packed groceries at these locations the day after placing their orders. As Ernst Dieter Berninghaus, head of trade at the Migros Cooperative Association, says, “Experience shows that the more closely we succeed in integrating our online and offline services, the more loyal our customers will be. Customers who shop in our stores as well as using the home delivery and collection services buy more than twice as much as «classic» store shopper. This is why we as a group are focusing on this cross-channel strategy.”

Furthermore, in October LeShop.ch introduced more precise delivery times: in over 40 Swiss towns and cities, customers can now choose between significantly narrower delivery windows. In these locations, LeShop.ch delivers in the morning between 9 am and 12 am, between noon and 2 pm and between 2 pm and 5 pm in the afternoon. In Zurich, customers can even choose between four additional 1½ hour delivery windows between 4:30 pm and 9 pm. This has allowed LeShop.ch to reach new customers. Offices and nursery schools, for example, have their shopping delivered in the morning, while those who work during the day use the evening delivery window. At the same time LeShop.ch was as the first online supermarket in Switzerland to launch nationwide home delivery on Saturday mornings from 9 am. Continued strong performance at the two LeShop.ch DRIVE collection stores, located in Studen (Bern) and Staufen (Aargau), further contributed to growth in 2015.

 

Rapid growth predicted in the online grocery trade

In Switzerland, the market for online grocery shopping is far from saturated. E-commerce experts at Credit Suisse are forecasting strong growth in this area over the next few years: in their study, Retail Outlook 2015, they predict that the proportion of grocery shopping carried out online will double from 1.7% to 3.5% by 2020. LeShop.ch’s CEO, Dominique Locher, says, “A large part of the market is still unclaimed, and everyone wants the biggest piece of the pie. In these conditions, we can gain new customers by providing fast and precise services and undertaking cross-channel initiatives in collaboration with Migros.” A quick glance at other countries shows that the market for online grocery shopping is booming: in England, France and Germany, a number of companies are preparing to enter the market, including online giant Amazon with its AmazonFresh service.

 

LeShop.ch — results 2015

2014

2015

1st half of 2014

Performance 2014/15

Turnover
(CHF million)

165

175,9

+ 6.5 mio /
+ 7.8%

+ 10.9 mio / + 6.6 %

CO2 savings* (tons)

1292

1373

+ 17 / + 2.6 %

+ 81 / + 6.3 %

Share of orders from mobile devices** (smartphone, tablet)

37 %

40 %

+ 4 % / + 11.4 %

+ 3 % / + 8.1 %

* Collective delivery by LeShop.ch as compared to private shopping trips in a car
** For the month of December

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