Just a week after Amazon launched its local online shopping service, retail behemoth Shoprite has boldly expanded its popular same-day, on-demand Sixty60 service from Checkers to include products from its Hyper stores.
The on-demand platform plan leverages the national footprint of its hypermarkets, adding 10,000 items to Sixty60’s 17,000 products. That means air fryers, braais, prams and toys can be delivered within a 60-minute scheduled time slot.
As to the timing of the announcement, Neil Schreuder, chief of strategy and innovation at Shoprite, says it’s “coincidentally beautiful ... and there’s never been a more exciting time to be a retail consumer”, adding that the group has been working on the online expansion for more than a year.
“A lot of customers had been asking for the service. We’ve ruthlessly managed to execute our groceries for 4½ years and consumers asked for the same for more conventional e-commerce categories.”
For now the new app is only available in certain areas in Cape Town: Kuils River, Brackenfell, Durbanville, Bellville, Goodwood, Edgemead, Gardens, Sea Point and Camps Bay. Checkers will deliver within a 20km radius, with “solvers” monitoring orders, traffic routes and timing.
The group has invited about 15,000 customers to download the app, which will be free in the beta phase while customers give feedback and help iron out potential glitches.
As a business we relish the chance to compete against global best-in-class, we think we have the grit to be able to stand our ground
— Neil Schreuder
Schreuder concedes the process turned out to be more complex than the original Sixty60 app, “where everybody knows what an avocado looks like. There will be niggles while we fix it ... after that we’re going to go quite aggressively.”
That includes a new fleet of Hyper delivery vans, adding to Checkers’s ubiquitous motorbikes.
South Africa has experienced a significant increase in online shopping since the pandemic led to a surge in demand and retailers have stepped up their investment in e-commerce. Shein started operating in South Africa during the pandemic and Temu launched earlier this year. Both have been hugely successful.
Schreuder is undaunted, though. “As a business we relish the chance to compete against global best-in-class. We think we have the grit to be able to stand our ground,” he says.
“We think the big disrupter will be ordering on the same day and it comes in a 60-minute window that you select. We will guarantee that it comes in that window and you can track the driver, like you do with Sixty60.
“We compete with anybody trying to sell in bricks and mortar and online. We see white space opportunities in general merchandise and online and we’re going to try to prove our mettle online. Takealot does a very good job and we respect the competitors. But there’s a lot of space.
“The Sixty60 success is unprecedented ... food retailers are snapping at our heels trying to claw back market share, and we’re at 80% market share.”
Evan Walker, portfolio manager at 36One Asset Management, says on-demand delivery is a very powerful mechanism for Shoprite and he expects Checkers will take market share from Spar, Pick n Pay and Takealot. “It’s a big move, it’s a clever move. You’re not discounting prices in the store, but offering customers quite a premium offering.”
Walker adds that the best way for Shoprite to effectively discount and undercut the competition would be to deliver free of charge. “It’s a very effective way to take market share from other retailers that are not in a position to follow ... they’re obviously gearing up to compete quite extensively.”
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