Supermercato 24, a new start-up delivery service in Italy, has found a way to offer Italian consumers same day delivery thanks to the use of contracted “bellboys” to buy and deliver goods. However this super service isn’t cheap – it comes at a cost of around 15% of the basket value, plus a delivery charge. How does the service work? Customers place their orders online and select the supermarket and brands of their choice. A “bellboy” (fattorino) then does the shopping and delivers the goods to the home, with cash paid upon delivery. The minimum delivery charge is €3.5, but can be higher depending on the weight and complexity of the order and proximity of the chosen supermarket. Minimum delivery time is one hour and same day delivery is guaranteed on all orders. There are also systems in place to combat differing prices and out of stock scenarios. The supermarket pays 1.5% of their earning on the order to Supermercato 24. The team of shoppers are self-employed and customers can leave feedback to help Supermercato monitor their service levels. Online yet to really take off in Italy Italy’s e-commerce sector is one of the least advanced in Europe. Progress has been exceptionally slow for a number of reasons; including the absence of any home shopping heritage, below average broadband penetration and low credit card usage. The trend from other countries have shown that grocery basket values tend to be higher in-store than online, it is little wonder therefore that supermarkets have not rushed to invest in the internet channel. Esselunga, the only operator to register in ComScore data last year, had just 220,000 unique visitors as of September 2014. Elsewhere in Italy, the grocery market leader, Coop Italia, sells general merchandise but no food and drink on its transactional site. Will this be an Italian success story? Since its launch consumers appear to be responding well to the service, attracting almost 24,000 likes on Facebook and receiving positive customer reviews highlighting the quality of the service and the efficiency and courtesy of the delivery contractors. By January 2015 the business was using 250 contractors to buy and deliver 3,800 customer orders, with ambitions to expand the shopping and delivery team to 1,800 by June 2015 – when it has been estimated orders will have reached 14,000. Some 40% of the customers – most of whom are mothers, professionals and older people – had placed more than one order at this point. Later this year the service expects to have coverage across the whole of Italy and the CEO has begun talks about taking the format to France and the UK. Mintel’s upcoming Online Grocery Shopping UK 2015 report shows that UK consumers are prepared to pay more for things that matter to them. One of those things is same day delivery, with over a third of consumers saying they are willing to pay extra for the service. However, as UK grocers have such well established multi-channel services and low cost home delivery, we think Supermercato 24 would find it very difficult to build its business in the UK, despite the offer of one hour delivery. Grocery retailers in Italy will need to keep a close eye on the start-up’s progress and this could well be the catalyst to other supermarkets joining Esselunga online. However, the real returns will come from click-and-collect services, which will bring customers into the stores where there is potential to increase dwell times and encourage incremental spend. Because of the scarcity of home delivery services, the company’s prospects look stronger in the less developed markets of mainland Europe, even with its premium prices. However it will need to move quickly, as there is potential competition from the likes of Germany’s Shop Wings, a similar concept to Supermercato 24 offering 15,000 grocery products from stores such as Edeka, Aldi and Lidl, who may also have their eye on international expansion. Hilary Monk Senior European Analyst in the UK and European Retail Team at Mintel. Before joining Mintel in 2001, Hilary worked in retail analysis for Corporate Intelligence and Verdict Research, as well as stockbrokers Prudential Bache and Shepperds & Chase. You might also be interested in: No related posts.