X5 expanding online program to one million Moscow households
MOSCOW. April 4 (Interfax) - X5 Retail Group will expand its Perekrestok online service pilot scheme to around one million households in southwest Moscow and some neighboring towns in the Moscow region beginning April 4, the company said in a press release.
Other districts of Moscow and towns near Moscow will be able to use the service by the end of 2017, X5 said.
In the five weeks preceding the project's launch in Moscow, about 2,000 employees at X5's head office placed online orders to test the service.
X5's online supermarket offers the same prices and product mix as retail stores, including over 13,000 PLUs (other than ready-made foods with very short sell-by dates, spirits and tobacco products).
The order picking and delivery service leverages a specially built hybrid store that combines features of a regular supermarket and a "dark store". Most popular goods will be supplied from the dark store, which gets direct deliveries from the Company's distribution centers.
"We are proceeding on the notion this is an additional service precisely for customers of the Perekrestok format," CEO Igor Shekhterman told journalists late last year.
At that time, Shekhterman said the company would test online sales on the Moscow market over the next one or two years. "Firstly, the technology must be developed. Secondly, the logistics must be prepared. Thirdly, we understand that the Moscow market has potential clients, those needing this product. Gradually, we will subsequently enter St. Petersburg. But for now, it's Moscow," he said.
X5 Retail Group previously tested online sales of nonfood products (electronics, home care products, books, etc.) by launching the E5 online store project in 2012, with merchandise orders delivered to X5 stores for customer pickup. However, X5 was unable to find an investor and shut down the project at the end of 2014.
Former X5 CEO Stephan Ducharme said the E5 model, which resembled Amazon, was best suited to a separate company, because it was not associated with the main assortment. "The only connection was that our offline stores served as pickup points for E5 orders. It was assumed that people would come to pick up the book they ordered and buy bread at the same time. But this turned out to be mistaken," Ducharme said in an interview with Kommersant concerning the failure of the E5 project.
X5's Perekrestok supermarket chain is the group's second biggest by revenue (its other chains are Pyaterochka proximity stores and Karusel hypermarkets). There were 211 Perekrestok supermarkets in operation in Moscow as of December 31. The pilot project covers 56 of them.
Another Russian supermarket chain, Azbuka Vkusa, is developing online sales. A company representative said online sales account for up to 3% of revenue. Another chain, O'Key, launched online sales in February 2015.
