The Digitalization of Spanish Retail

16th October 2020

Robyn Mullan, Global Graduate Spain, Portugal & LATAM - The Irish Food Board

Prior to the pandemic, the importance of digitalization and delivery services were expected to grow, as was identified in the Bord Bia Consumer Lifestyle Trends under the Fuller Lives trend. As has been the case in many other countries, the impact of the closure and/or restrictions that have been placed on the foodservice channel has created opportunities for retailers and those supplying them to acquire market share. Prior to lockdown, shoppers mainly purchased their groceries in-store and few retailers offered home delivery services. But the pandemic has forced retailers to improve their e-commerce infrastructure to better serve their shoppers.

IGD predicts that an additional €2.8 billion will be generated in 2020 from grocery channels, with €0.5 billion coming from online. Novedades y Noticias revealed that the percentage of online shoppers grew by 12% from 16.8% in the first 6 months of 2019 to 28.9% in the first 6 months of 2020. Food and drink was the category of highest growth, jumping from 3.8%  of shoppers in January and February to 5.7% in May and June, reaching its peak at 8.4% during lockdown. Food represents 35% of the value sales online with drinks accounting for 4%. According to Alimarket, by July food and drinks had become one of the categories that had experienced the greatest online growth, with 47% of Spaniards declaring that they had increased their virtual shopping list during quarantine. Furthermore, 88% of Spaniards plan to continue this behaviour in the ‘new normal’.

With the sudden onset of the pandemic, many retailers signed contracts with home delivery apps in order to outsource this process as efficiently as possible. Glovo has been the top choice of many retailers, increasing the number of grocery stores on its platform by 70% between the start of the pandemic in March and the first week of May. This has allowed retailers to take advantage of this opportunity now and give them time to develop their own e-commerce infrastructure. According to Alimarket, the French chain Carrefour, was one of the first retailers to align itself with Glovo in order to deliver products from its ‘Carrefour Express’ stores in urban centres in July 2019.  Following the avalanche of online orders at the start of the health crisis, both parties decided to expand their agreement. For the same reason, DIA followed suit in March, the organic chain Veritas in April, and Auchan in July. Regional stores, such as Frutas Eloy, La Vieja Castilla, Jamones Julián Becerro, Cultivo, Mercado Acre and Casa Conrado have also joined the platform. Auchan also started to offer its own delivery service in 2019, but only from one of its hypermarkets in Madrid. Sanchez Romero started working with Deliveroo in July. In May, Alimarket announced that Mercadona had extended the reach of its home delivery service to more zones of Madrid in response to Covid. Alimarket confirmed in April that Carrefour is going to adapt 13 stores for online sales.

But how can Irish suppliers make the most of this opportunity?

Visit Retailers’ Online Stores

While it’s not possible to visit physical stores at the moment, online stores are accessible to anyone with a phone or laptop. Visit the websites of Mercadona, Carrefour, El Corte Inglés, Auchan (stores known as Alcampo in Spain) and other retailers to understand the layout of their sites and which options are available on each site for promoting your product as well as to investigate how competitors are promoting themselves through this channel. Look into the kind of brand and product information that is included, what formats are supported on the site (images, videos, etc.) and how you can stand out from the crowd. Don’t forget delivery apps!

Revise & Adapt Your Digital Assets

Based on your findings, review your own digital assets and adapt them to the Spanish market. If you work with a local distributor or agent, ask them to support you with this by translating existing suitable content and perhaps developing new content. This could be information on your brand history, virtual tours of your premises, recipes based on your product and anything else you and your team deem relevant to best support online retailers in promoting your product. If sufficient resources are available, you could also use these assets for your own digital campaign using social media and online advertising to drive more traffic to retailers where your product can be purchased.

Sources:

https://pixabay.com/illustrations/grocery-online-delivery-food-4052896/

Alimarket, 88% of Spaniards will continue to buy online in the ‘new normal’ https://www.alimarket.es/envase/noticia/318567/el-88--de-los-espanoles-seguira-comprando-online-en-la--nueva-normalidad-

Alimarket, Glovo increases the number of grocery stores on the app by 70% - 08/05/2020 https://www.alimarket.es/alimentacion/noticia/314401/glovo-aumenta-un-70--las-tiendas-de-alimentacion-adheridas-a-su-app#acceder

Alimarket, Auchan joined the Glovo platform in Spain and three other countries – 16/07/20 - https://www.alimarket.es/alimentacion/noticia/318301/auchan-se-suma-a-la-plataforma-de-glovo-en-espana-y-otros-tres-paises

Alimarket, Mercadona extends its online service in Madrid and its physical network in Portugal – 20/05/20 - https://www.alimarket.es/alimentacion/noticia/315044/mercadona-extiende-su-servicio-online-en-madrid-y-su-red-fisica-en-portugal

Bord Bia Consumer Lifestyle Trends - https://www.bordbiaconsumerlifestyletrends.ie/trends/fuller-lives/

IGD, 2020 Grocery Channel Forecasts: France, Germany, Italy and Spain, June 2020, slide 15 - https://retailanalysis.igd.com/markets/presentation-viewer/t/2020-grocery-channel-forecasts-france-germany-italy-and-spain/i/9817

Novedades y Noticias, The percentage of online FMCG shoppers grew by 12% in the first 6 months of 2020 – 13/10/20 - https://novynot.com/?p=11729