On March 17, Irishman Marc Keegan should have been raising a glass to toast St Patrick’s Day but the senior manager of digital transformation at Metcash had bigger worries on his mind. By this time, the surge in demand for online grocery fuelled by the pandemic was causing huge setbacks for the nation’s biggest grocery retailers – but independent grocery chain IGA wasn’t even in the race. “We did not have an e-commerce offer at all at this point from a national perspective
ive … it didn’t exist,” Keegan told Inside Retail.
“It was never really something that our retailers had an appetite for. We were quite happy with our bricks-and-mortar approach, we never really expected that we’d have to go into a position where we’d be working from home with everyone trying to restrict their outside movements.”
But with pressure from government agencies and departments to ensure that supermarkets had plans in place for home delivery in the event of a Stage 4 lockdown, Metcash needed to think fast.
Starting from scratch
After exploring existing systems, Metcash and technology partner WP Engine came to the conclusion that they would need to build a completely new e-commerce system to cater to IGA’s unique network of independent retailers.
Within three hours, they had a server in place and began recruiting volunteers and staff members from all across the business to help get the site in place.
“We stood that site up in about four days. It was pretty hard going. I think my team at the time consisted of about six people working on this project, so we were working 17-18-hour days trying to stand this thing up,” Keegan said.
“It was no longer a job, it was more of a calling … We needed a solution for those [vulnerable] people who might be going hungry. Nothing else mattered.”
As was the primary focus of other major retailers, IGA’s initial e-commerce offering was about providing essentials to elderly and vulnerable shoppers only. The site featured four products, hampers featuring various household essentials.
“On the first day, we had thousands of people who were trying to register, but we did have criteria in place that you had to meet to actually be accepted.”
Over 200 staff were working in a call centre to help first-time online shoppers to place orders.
As an umbrella group for independent retailers, Keegan said they faced “hundreds” of challenges that the likes of Coles and Woolworths wouldn’t have to contend with, particularly around ordering and optimising picking and packing.
“At one point, we had calls maybe five times a day with our national retail board, and then down to the state board, so everybody was informed on what we were doing. That line of communication with over 1400 retailers is a pretty difficult thing to do, particularly in a pandemic when they were busy enough with their own stores,” he said.
Streamlining processes
After branching the site out to general consumers after the initial panic buying eased, IGA Online has since maintained a high level of online orders and has added 1800 additional products to the site. Metcash is also streamlining processes to achieve same day delivery where possible.
“We’ve brought on new functionality, we’ve got different interfaces for retailers to interact with to accept those orders and different ways for them to interact with consumers as well,” he said.
And while the major players are investing billions in automated warehouses, dark stores and micro fulfillment centres, Keegan said that won’t be the path for Metcash.
“We’re never going to act as a dark store, or a distribution centre that’s going to deliver on behalf [of our retailers], because they’ve got their own products, they’ve got their own ranges, they’ve got their own pricing, they’ve got their own way of doing business.
“We’re not going to interrupt their business; what we’re trying to do is complement it, and help it out in an online world.”
In certain cases, some stores will handle the distribution for three or four stores, in a Metro area usually, to ensure that orders can be fulfilled quickly.
It’s not the first time Metcash has united its retailers on an online platform. In April, it also launched an online platform for Independent Brands Australia (IBA), Australia’s second largest network of liquor retail outlets, in the space of a few weeks. The Shop MyLocal site incorporates six brands including Cellarbrations, The Bottle-O, Thirsty Camel, IGA Liquor, Porters Liquor, and Big Bargain.
Digital evolution
Despite its newcomer status, IGA recently topped Canstar Blue’s customer satisfaction ratings for online grocery shopping, with five-star scores across the board.
“That’s a pretty big achievement for us considering we never had anything before,” Keegan said.
Mark Randall from WP Engine puts the success of the site down to being clear about the offering and allowing space for improvements along the way.
“[It’s about being] very clear about what your offering is and having the right integration with your marketing technologies, having the right customer data so that you don’t have to get this right initially, but you can quickly evolve, iterate and make sure that your offer is meeting the changing needs of the consumers,” Randall said.
For IGA, it’s just the beginning of its digital transformation, with plans to enter a new phase in the coming weeks.
“We’re on the edge of jumping off that cliff into something brand new, something that we’re bringing online in the next few weeks. It’s another change, an evolution to this process,” Keegan said.
“This is something that we haven’t done before. We’re trying to catch up on 10 years of competitors’ work. And I think we’ll get there very very quickly.”