One of Spain’s first exclusively online supermarkets, Tudespensa.com was launched in October 2012 and now has 80,000 registered customers with 30% growth expected this year.
Tudespensa– which translates as ‘Your pantry’ – aims to set the benchmark for quality and freshness in fresh produce e-commerce in Spain. Head of fresh produce procurement and pricing, Juan Carlos Chillaron, explains how.
What is your fresh produce strategy?
Fresh produce is the most important part of the www.tudespensa.com online supermarket and so we always aim to exceed our customers’ expectations in terms of the quality of our produce. This applies to all kinds of fresh produce, but in the case of fruit implies achieving this amid the idiosyncrasies of these products, where the quality perceived by the customer is not just influenced by freshness, but by other factors such as the calibre of the fruit and, above all, the ripeness of each piece fruit, as well as the packaging and labelling. For all our fresh produce we aim to keep the supply chain as short as possible, selecting and packing the product for delivery the same day or at the most the next morning, giving the customer the maximum possible product life – these are our competitive advantages.
How are you able to offer competitive prices, particularly when you have to factor in delivery costs?
You have to bear in mind that all our products arrive in fully labelled packaging, ensuring product traceability, and via refrigerated transport. They are kept in conditions of maximum food safety until they reach our customers’ fridges. Also, the formats for each of our products are adapted so they meet the needs of all our customers, without having to buy too little or too much of something, with the above-mentioned food safety guarantee, and every tray must carry full product information, such as on origin, category and weight. As well, every product has its own information sheet customers can view online while making a purchase. Taking into account all these factors, our pricing policy is based on a comparison with our online competitors selling comparable – of the same quality and calibre – labelled and pre-packaged products. We try to keep a balance, as do all retailers, in trying to offer the best prices while also achieving the margins the company needs.
What is the biggest challenge in selling fruit and vegetables online?
It’s the same for all online food retailers, it’s getting consumers to change their shopping habits, with the additional factor that we will be selecting their fruit and vegetables for them. The immediacy expected of online sales adds other challenges, such as the need to not only have the produce available, but of the desired quality and as soon as possible, as well as to offer a very wide range. For all these reasons, the rigour we require of ourselves at www.tudespensa. com must reflect that demanded by the customer, but without incurring very high costs as they also want competitive prices.
How many of your first-time customers return?
Nearly two-thirds of customers stay with Tudespensa after trying us the first time and we are especially pleased that 9 out of 10 customers recommend us to their friends and acquaintances. Another positive aspect is that our most loyal customers are those who buy fresh produce from us. Indeed, 81% of all orders include something from the fresh produce department, and 28% involve something from every section. We think this indicates that most of our customers understand and appreciate the complexity of doing their shopping for them, and the daily effort that goes into picking and delivering the best products in a timely manner, and their loyalty is the best possible response and biggest asset we could have. Although there will always be some consumers who want to keep buying these products in a traditional way, we have developed different ways to show them how much more convenient it is to not have to go to a store and carry heavy weights. One is the site www. valoratutiempo.es (assess your time), which we launched to prove to customers that doing their own shopping ends up being more expensive, and which has already been used by 8,500 people.
Where is your logistics platform?
For fresh produce, we are strategically located right near Mercamadrid, one of the biggest fresh produce markets in Europe, where our partners in the supply of meat, fruit, vegetables and fish are also based. Every day before 9am they deliver produce – packaged and labelled – to our automated warehouse, where it is soon dispatched to fulfil our customers’ orders.
Turnover 2014: €8.9 million (expecting +30% 2015)
Expected to break even for first time this year
Average customer spend: €115
Total assortment: more than 7,000 products
Fruit & vegetable items: 158 (including pre-prepared products): fruit 69, vegetables 89
Current top-selling fruit: bananas, oranges, mandarins
Current top-selling vegetables: potatoes, onions, courgettes
Fruit & vegetables imported: 25% of total (due to off-season produce & big tropical range)
Orders including some fresh produce: 81%
Delivery: 98% of orders delivered within customer’s chosen 2-hour slot
Logistics base: more than 8,000 m2 (incl. automated warehouse) beside Mercamadrid
Coverage: Madrid, Barcelona, Toledo, Guadalajara
Main competitors: Ulabox (100% online) plus retail chains Mercadona, Carrefour, El Corte Inglés
Forecast growth in food e-commerce in Spain: 18% by 2017