Cornershop, Uber’s shopping platform, and Carrefour have entered into another partnership, this time to offer express deliveries for shopping within 15 minutes. The new operation, still in the pilot version, operates from 5 stores under the Carrefour Express label and has been running for the third month. There are no fixed deadlines for the growth of this service – the perspective is that another 10 stores of this type in São Paulo will be added to the project by the end of the year. “If it’s not by the end of the year, it will be right away,” says Samuel James, chief digital officer of Grupo Carrefour.
The difference between this project and other fast delivery projects offered by competing platforms is that it does not use exclusive stocks for e-commerce, the so-called. dark stores. Deliveries come from stores that already exist: which has advantages and disadvantages.
For Cristina Alvarenga, head of Cornershop in Brazil, having a retailer as a partner means that the company does not have to worry about activities that are not its specialty, such as looking for a place to rent to build inventory and form a range of products ideal for the region. On Carrefour’s side, according to James, the advantage is that they don’t have to incur the costs of motorbike fighters standing in stores waiting for calls, as well as all the technology that includes a delivery app.
On the other hand, both companies had to adapt to the use of space that was initially intended for customers’ purchases, in order to use it as a micro distribution center, where employees can quickly separate products and release them for delivery. In this adjustment, Alvarenga says the Cornershop had to add technology to the process so that orders would take less time to reach the employees tasked with preparing the customer’s package. This leaves more time for this process, which, if done in a dark store, would be faster.
Carrefour (BOV:CRFB3) stores that became part of the program had to add an employee to the payroll to take care of customer service in the physical store and fast digital shopping. James explains that this model is not yet complete and that it is possible to achieve greater efficiency without the need to increase the number of employees per institution.
For both companies, this is still an investment period. In fact, e-commerce is usually not a great source of profitability when operating at this level of speed and with low value-added products. The focus of this type of operation is to encourage the customer to buy again through the platform multiple times and in different formats: larger purchases with longer delivery times or even in person. Profitability comes from that combination and scale.
“Our goal is profitability, but not now, in the short term, in a three-month pilot. There is an investment from our side so that we can start the operation. It has already reached the level of ‘units per order’ (contribution margin per order) in line with what we expected for this phase and with the potential to improve as the project grows,” says Cornershop’s Alvarenga.
In other joint operations between the two companies outside the country, this path to profitability has evolved, the CEO says. Carrefour and Uber are partners on a global level for the delivery of purchased products, regardless of the delivery method. In France, there are more than 1,100 Carrefour stores available on Uber Eats (the flag that has been discontinued in Brazil), in around 200 cities, with more than 6,000 products available. In Spain, the partnership was launched in the first half of 2022 and has more than 100 stores in more than 50 cities. The goal is to expand the offer to around 150 additional Carrefour Express and Carrefour Market stores in the country throughout the year. Carrefour and Uber Eats also have partnerships in Italy, Belgium and Taiwan.
In Brazil, the express delivery pilot operation offers between 2,000 and 3,000 products to customers in each store, with fresh products accounting for 30% of the items ordered. In addition, the partnership with the Cornershop application for longer delivery times is extended to the brands Carrefour Hiper, Carrefour Bairro, Atacadão, Carrefour Drogaria, Big, Nacional, Big Bompreço, Maxxi, SAMs, Super Bompreço and Todo dia. In all, more than 250 stores in 25 Brazilian cities are available in the app.