How were you able to sell local retailers on the Lokaso concept?
Schulte: By aiming at redirecting one percent of the already existing e-commerce sales in the region into the region. That’s currently approximately 350,000 Euros per day – extrapolated based on German statistics – and would mean, we redirect 3,500 Euros into the region every day. Given 50 to 60 retailers and a shopping cart value between 50 and 60 Euros, we would generate about one order per retailer per day. This allows for a realistic assumption pertaining to the approximate volumes a retailer can expect.
Can you already draw some early conclusions?
Schulte: At the beginning of September 2016, we went online with the platform. After 10 weeks, we have successfully processed about 650 orders with 38 retailers. This is a great achievement if you look at other comparable regions. After one year, they didn’t even have 100 orders.
The scope is still manageable and obviously still needs to be expanded. We presently have 700 registered users but we are addressing 150,000 potential customers. That’s actually a good thing because the system was programmed from scratch of course. Things need to be corrected and improved. Given the customers we currently have, we can monitor exactly where the problems are and at what point we act in real time. This lets us adapt our system and accommodate delivery of specific articles by days or even by time windows.
What are the advantages for the user?
Schulte: We have free same-day delivery if you spend a minimum of one Euro. Customers actually expect this since they are already familiar with this convenient aspect thanks to amazon or Zalando. Like I mentioned already, the delivery is paid for by the retailer based on a percentage of merchandise logistics. The merchandise that the customer orders at the retail price is being picked up at the vendor and delivered to the customer’s home.
Same-day delivery was the first and only option for us since we also ship fresh produce and refrigerated items. If you order by 10 a.m., the items will be delivered between 1 and 3 p.m. If you order by 3 p.m., the items will be delivered between 6 and 8 p.m. Returns can be made at the local retailer or through Lokaso. At the customer’s request, we also take back deposit bottles or reusable packaging from a coffee shop for example.