When the store was introduced in Seoul in 201 1, smartened penetration was 45%, and London surpassed this figure in 2014 at 50%. Smartened penetration continues to grow in both cities (Exhibit 6). Another key factor for the success of the virtual store concept is the delivery system.
According to Deco’s website, their grocery delivery service covers most residential areas in the U. K. , so the delivery infrastructure already exists. Recommend that Deco’s virtual store’s role be more focused towards increasing Deco’s share in online retailing.
Tests is already a well-known international brand with a large market share in the U.K. The focus should be more on the online store development considering there is a good potential growth in this area (as shown in exhibit 7). Online stores could also reach customers that traditional stores may not.
The presence of virtual stores would also have a knock-on effect of general promotion of the Tests brand and products, without being the focus. Possible locations for the virtual stores could be Train Stations, underground, and Airports. I recommend train stations as the most promising locations in London for Tests virtual stores. According to the 2010 National Travel Survey, 84% of the IS.KS 1. 3 billion annual rail trips were on weekdays, with 51% of trips being for commuting.
In addition, 59% of all rail journeys in the UK were to or from London. This represents a large potential market of busy daily commuters, who would find convenient a virtual store located in the train station. Customers could shop at Tests while waiting for their train to arrive.
The London Underground is one of the world’s largest, with over 1. 2 billion annual passengers. The Underground commuter has a potential risk of smartened penetration which is not a problem with the surface train stations.At present, only Virgin Mobile customers will have access the Underground Wi-If.
Even with this potential risk Underground commuters remain a promising market. Should Wi-If access become widely available in the Underground it would be a good location given the number of potential customers. A Tests virtual online store at a London Airport would potentially target arriving passengers, enabling them to conveniently shop for items they need, having been away from home. An ideal location at an Airport would be the Arrivals Concourse, a lace where all arriving passengers transit.A virtual store at an airport could target a different market, not necessarily daily commuters. Locating Tests virtual stores in transportation hubs enable the stores to target busy daily commuters.
Exhibit 3 shows that Tests has a good market penetration in all customer groups compared with their competitors, Coda, Sad, and Ginsburg. Making Tests more accessible (with virtual stores) in key points of London would attract more urban customers (group A and E, exhibit 3). While still enjoying market majority in these groups, Tests does not have the same eminence as With other groups.Easy virtual online store accessibility in train stations for example, would attract younger, cosmopolitan customers (group E, exhibit 3) who are likely to frequently use public transportation. Maximizing accessibility to Tests products through its virtual stores would increase perhaps the percentage of the monthly budget spent on groceries online (Exhibit 7, C).
Data from Exhibit 7 (point E and F) shows that people would prefer not to buy fresh foods online for various reasons. However, a significant percentage Of the customers would prefer to buy all their groceries in one place only.