By offering fresh produce, organic products and a wide variety of choice, PENNY Romania is able to meet the needs of customers and respond to current trends. The product range is expanded on a weekly basis with limited special offers. PENNY has been operating on the Romanian market since 2001. The company runs over 300 PENNY stores with over 5,300 employees. PENNY Romania is an equal opportunities employer that focuses heavily on personal development. Another of its strong points is that it constantly seeks to improve its energy efficiency and conserve resources. PENNY is among the top organisations that received the title “Top Employer 2022” in Romania. The certification reflects the care, commitment and performance in human resource practices.
IKI impresses customers with its wide range of regionally and locally sourced products. Customers can choose from over 11 high-quality store brands, including IKI, PAGAMINTA, BIO Village and Bon Via. IKI boasts the second largest loyalty club in Lithuania with over 1.2 million members. IKI has been operating in the Baltic state since 1991. The company runs over 230 stores with around 5,600 employees. IKI is one of the country’s largest employers and employs around 1,500 trainees and apprentices. Another of its strong points is its climate protection credentials: more than 85 per cent of its stores in Lithuania are already energy-efficient.
Bananas, bananas and more bananas. Dana Balanescu, Digital Commerce Operations Team Lead at PENNY Romania, grins as she inspects the list of products that the discounter regularly delivers to its customers’ homes. PENNY has dropped off 21 tonnes of bananas at doorsteps up and down Romania over the last year. No other product has been as popular online. Fruit also recently ranked amongst the products most frequently ordered for delivery by BILLA customers in Austria. The situation has been similar in Lithuania where customers of the country’s second largest food retailer, IKI, for which the REWE Group is the majority shareholder, have also demonstrated a clear preference for fresh produce. According to Andrej Pometko, Head of Digital Channels at IKI, bananas are right up there once again.
The pandemic has triggered a real surge in online food retail, and not just in Germany but many other countries too. Many consumers who were previously hesitant because they were doubtful of the quality and reliability of the delivery services have been using them during the coronavirus crisis to avoid contact with other people. As such, they experienced just how convenient it is to have your own basket of goods delivered right to your door. And on top of that they came to realise that the quality of the fresh produce is never compromised. We’re embracing this trend at the REWE Group with PENNY, BILLA and IKI. We’re ramping up our e-commerce activities, developing new platforms, testing out partnerships with delivery services and pinpointing exactly what our customers want in almost all the countries in which we operate.
In Austria, for example, BILLA has continuously expanded its online product range such that it now includes more than 9,000 products. Warehouse, logistics and human resources capacities have been ramped up and the range of available delivery time slots has been expanded. “We’re confident that the trend for online shopping and various services such as delivery services will continue after the pandemic – both in urban and in rural areas and also across all age groups”, says David Renker, Head of Digital at BILLA in Austria.
PENNY in Romania is another prime example: “Two years ago”, says Dana Balanescu, Digital Commerce Operations Team Lead, “we began to turn our attention to e-commerce. Not on our own but together with partners who really know their stuff. As a result, we’re gradually learning how to develop our own business.” One of these partners is Glovo, a start-up experiencing rapid growth that specialises in express delivery services. Glovo, which was founded in 2015 in Spain, currently has operations in around 30 countries, and has approximately 5,000 riders in Romania alone. “Glovo is the perfect partner for PENNY because we both operate nationwide”, says Dana Balanescu. PENNY boasts a network of over 300 stores in Romania, and that number is continuously rising. The number of sites is expected to double by 2029 to over 600. Online customers’ deliveries come from the stores. Just under half of the sales network is currently integrated, and many of the stores are located in the capital Bucharest and other major towns and cities. PENNY will establish a Click&Collect service in smaller towns and cities and in remote areas where the discounter already has stores. Customers will choose online from a range of approximately 3,000 products and PENNY employees will prepare their orders ready for them to collect. “We also plan to launch home delivery services from these stores over the next few years depending on demand and competition”, explains the digital commerce expert.
Home delivery tasks are divided up between PENNY and Glovo as follows: the discounter’s employees prepare and pack the orders and the riders make the deliveries – all at lightning speed. On average, goods reach customers within 45 minutes. However, PENNY is also testing out other partnerships. “The challenges are immense and competition is fierce as there are lots of providers crowding the market”, emphasises Dana Balanescu. PENNY Romania has set itself an ambitious goal: The company is aiming to be the omnichannel top dog by 2025. The plan is for the stores to gradually become “online hubs”, i.e. platforms for various different delivery activities, potentially also including parcel deliveries for commercial customers. “We’re testing out all conceivable delivery services. Our strength lies in the fact that we already have a good national presence which is only improving”, says Dana Balanescu.
The situation for IKI and its 231 stores in Lithuania is a little different. The Baltic state has just 2.8 million inhabitants, is comparatively small and has a low population density. “A practical food delivery service is possible in at most eight to nine towns and cities in Lithuania. And consumers there also often have a food retailer in their neighbourhood”, explains Andrej Pometko. IKI relies heavily on Click&Collect services outside of major towns and cities. The plan is for customers to be given more and more opportunities to place orders online and then collect them themselves from the stores. This service is currently offered at a total of eight stores in five towns and cities, but the plan is to roll it out nationwide as swiftly as possible. In the future, Click&Collect is expected to be offered wherever IKI has a store.
According to Pometko, consumers in his native country are very tech-savvy and open to innovative new developments in retail. “However, they expect high-quality service and are used to getting their deliveries for free.” This poses major challenges for delivery services. Last year, IKI became the majority shareholder in the e-commerce start-up LastMile. “LastMile is agile and is constantly looking for ways to make customers’ lives easier, which means it is perfectly aligned with IKI’s brand promise”, says Pometko. The start-up is known for high quality and short delivery times. Around 80 per cent of all orders are delivered within one to three hours. LastMile operates on a sharing economy business model, which means that the riders don’t work exclusively for LastMile or IKI but also offer their services to third parties depending on demand. This presents real challenges in terms of planning but also in terms of ensuring that consumers get a consistent customer experience.
IKI is famous for driving innovation across the Lithuanian retail sector. In 2008, it was the first retailer to introduce self-checkouts. The aim for the near future is to install a self-checkout in every other store. At the beginning of 2022, in partnership with the start-up Pixevia, IKI opened a staffless store (“IKI Express 24/7”). “We’re always looking carefully at what customers want and adapting our services accordingly”, emphasises Andrej Pometko.
The conditions and challenges facing e-commerce in the food retail sector differ from country to country, however one thing is for certain all around the world: you will never manage to impress customers on a permanent basis unless you provide a faultless service at a reasonable price. And that’s exactly what we intend to do at the REWE Group. That’s why we are primarily focusing on tests, tests and more tests. This will enable us to find out what is really important to consumers. In the Czech Republic, for example, as from summer 2022 BILLA will make deliveries, initially to a select group of customers, from two new e-commerce warehouses in Prague and Brno. This will enable us to test the functionality of the website and the app, collate feedback from customers and gradually optimise our range of products and services. The aim, like everywhere else, is to provide a faultless service without any compromises.