Stockon: The new kid on the block in the online grocery market


Stockon delivery by PostNL Food

The Dutch grocery market has known a wave of acquisitions and mergers which results in an oligopolistic market with five clear leaders: Albert Hein, Jumbo, Superunie, Aldi and Lidl (Rabobank, n.d.). This resulted in fierce competition on price, where every grocery formula would leverage its scale to the grow faster than their competitors. However, since the arrival of Picnic the field is changing, another dimension is being taken into account; home-delivered groceries. But not only Picnic saw potential in this market, a new contestant has entered: Stockon is a disruptive online retailer, who provides groceries for consumers’ pantry’s and is unique in the Dutch grocery market since it doesn’t own any physical stores itself and moreover, since it is a subsidiary of PostNL they are able to use their vast distribution network via PostNL Food (Boogert, 2018). This partnership enables Stockon to serve all Dutch customers at minimal cost, hence giving it a competitive advantage over their direct competitor picnic who rely on their own distribution network and can’t grow as fast. The business model of Stockon is built upon their smartphone application, where customers can browse through their products and add them to their online pantry. Stockon fills the gap for customers who are looking for home delivered groceries and don’t want to spend time managing their pantry (Stockon, 2019). Stockon is able to fill their customer’s needs because they center all their activities around their customers, Stockon places its customer at the heart of their business decisions. For this Stockon relies heavily on the data retrieved from their customers via their application. Stockon invites their customers to continuously give them feedback on; delivery, products, advertisement and more. This feedback is used for optimizing their business model to their customers’ needs, resulting in a fully data-driven decision making business model. To ensure a sustainable long-term vision, Stock on expanded their proposition by ensuring that all their products will be delivered C02-neutral (Jansen, 2018) with this, they are a pioneer in the online groceries landscape. 

Stockon bag with logo

As mentioned before Stockon’s business model is centered around its customers via its smartphone application. After downloading and log in on the application, customers can select their groceries & timeframe when they want their items to be delivered via PostNL Food. Moreover, Stockon enables its customers to make a standard shopping list that will be delivered periodically. This standard shopping list is optimized using artificial intelligence techniques supported by customer feedback to ensure the ‘basic’ household products are always present before the customer runs out, this ensures filled cabinets from a customer perspective and moreover a steady revenue stream for Stockon. Next to this Stockon implemented their customer loyalty program ‘Stocktegoed’ where the customers automatically save for discounts via purchases and referrals to friends (Stockon, 2019a), this increases switching cost for the consumers and ensures a repeat purchase. 

To assesses the efficiency of this business model we will look from multiple angles, we will look at the joint probability resulting from a joint pay -off for both consumers and suppliers.

The ritme option

First, we will look at the customers and Stockon, as mentioned before Stockon centers its business model around their customers. Decisions will be made based on their preferences retrieved via data mining or customers’ feedback. For customers, there are several joint payoffs starting with the ‘ritme’ option. This option for groceries can really serve customers’ needs because it takes away the stock management dimension of buying groceries. By better learning the consumption pattern of consumers Stockon is able to more accurately predict when a certain customer is in need of a new product, therefore they will be able to assure customers to never run out of groceries once again (Stockon, 2019a).

The recommended products section

Second, since Stockon is continuously learning about customers’ preferences, they are able to better understand their customers and this can help them to better recommend products to their customers (Li & Karahanna, 2015). Moreover, Stockon gives its customers the option to request products which they feel are missing. This gives customers the possibility to customize their obtained service from the app, with minimal complexity while gaining utility (Dellaert & Stremersch, 2005). 

Third, since Stockon doesn’t have any physical stores, they are able to save costs compared to traditional retail outlets, this combined with an integrated supply chain with PostNL Food results in cost savings for its consumers. Moreover, because Stockon is learning every day about consumer consumption patterns they are able to leverage these insights into their planning and supply chain departments. This results in better coordination between Stockon and the suppliers, and therefore Stockon is able to minimize waste (Stockon, 2019b). This waste minimization is combined with an aforementioned C02-neutral mission for the company. The company does this by actively gaining insight into their CO2 emissions. When these emissions are identified Stockon tries to minimize their impact by using recycled plastic and stimulate PostNL Food to decrease their footprint as well. Stockon does realize they will always have some impact on the environment, but to counter this impact, they partnered with Climate Neutral Group to ensure its C02 neutrality(Stockon, 2019b). 

Not only the customers are able to jointly profit with Stockon, but the suppliers of the groceries sold by Stockon also are able to profit in a new way. Stockon shares data about the behavior of its customers, this allows for direct insight into the behavior of its consumers. This direct access to data enables the manufactures to test new products and see immediate results (Boogert, 2018). As mentioned before, customer behavior is completely documented. This could help manufacturers to further increase the accuracy of their forecasting and planning tools, helped by the ‘ritme’ shopping lists of Stockon’s customers (Stockon, 2019a). Of course, this will further decrease the impact these manufacturers have on the environment because shipments can be coordinated more efficiently. 

Stockon has the potential to revolutionize the online groceries market by filling in the customers need to no longer think about planning their groceries. They have pledged to do this as a C02 neutral company. Who knows Stockon becomes the new benchmark for online groceries.

References:

Boogert, E. (2018, February 13). Boodschappendienst Stockon lanceert met PostNL – Emerce. Retrieved February 24, 2019, from https://www.emerce.nl/nieuws/boodschappendienst-stockon-lanceert-postnl

Dellaert, B. G., & Stremersch, S. (2005). Marketing mass-customized products: Striking a balance between utility and complexity. Journal of marketing research, 42(2), 219-227. Retrieved February 24 2019, from https://pinnacle.allenpress.com/doi/abs/10.1509/jmkr.42.2.219.62293

Jansen, R. (2018, August 23). Distrifood. Retrieved February 24, 2019, from https://privacy.vakmedianet.nl/distrifood/?ref=https://www.distrifood.nl/branche-bedrijf/nieuws/2018/08/stockon-bezorgt-boodschappen-klimaatneutraal-101118637+

Li, S.S. and Karahanna, E., 2015. Online recommendation systems in a B2C E-commerce context: a review and future directions. Journal of the Association for Information Systems, 16(2), 72-107. Retrieved 24 2019, from https://s3.amazonaws.com/academia.edu.documents/37448056/Li_and_Karahanna_JAIS_2015.pdf?AWSAccessKeyId=AKIAIWOWYYGZ2Y53UL3A&Expires=1548859718&Signature=lIrj90Q8pLPDYNwr1LoDrpSJTNs%3D&response-content-disposition=inline%3B%20filename%3DOnline_Recommendation_Systems_in_a_B2C_e.pdf

Rabobank. (n.d.). Supermarkten, cijfers en trends Rabobank. Retrieved February 24, 2019, from https://www.rabobank.nl/bedrijven/cijfers-en-trends/food/supermarkten/

Stockon. (2019, February 15). Zo werkt Stockon. Retrieved February 24, 2019, from https://www.stockon.nl/zo-werkt-stockon/

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