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PnP joins Mr D on the exploding grocery deliveries battlefield

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Toby Shapshak is publisher of Stuff (Stuff.co.za) and Scrolla.Africa.

Pick n Pay’s unusual deal to partner with Takealot for grocery deliveries, via its Mr D app, is a smart strategic move.

Most traditional business logic would dictate that a retail chain should build its own delivery operation, thereby keeping costs down and retaining total control. Thankfully, Pick n Pay has not been traditional in this regard.

Simply put, Pick n Pay is nowhere with deliveries, in spite of buying the Bottles delivery app and rebranding it as ASAP.

One of the unintended consequences of Covid-19 was the significant increase in e-commerce, as South Africans caught up for years of reticence and rushed headlong into having things delivered. Checkers Sixty60 estimates that its R35 delivery fee is less than the R54 it reckons it costs you to drive and park at a store. It also saves significant amounts of time.

I use Woolies Dash and Sixty60 to buy groceries for my 94-year-old mother (hi ma) and my own household every week. I have started trying out Pick n Pay ASAP – which will run until the Mr D service is operational – and ordering from the PnP app has been pleasingly quick. I’m happy with next-day delivery for beer and whisky, especially as I seldomly find my favourite Hoegaarden in stores but it’s always available online.

Pick n Pay has enough fires to put out, as anyone would know after reading innumerable articles in the last month featuring CEO Pieter Boone explaining the new strategic direction of the company.

“It is more than outsourcing,” Pick n Pay’s chief transformation officer David North told DM168. “We think it is actually a very good set of synergies between two different companies, really. What we bring to it is obviously our long-standing expertise in food and grocery, and in supply chain, and the existing relationship with customers that we have.”

Pick n Pay has a crucial trust relationship with its customers, he stresses.

Takealot’s Mr D, on the other hand, has “the best technology in the market”.

“We’re very excited to be partnering with the biggest and the best food delivery player in the country in Mr Delivery. They already do millions of deliveries for food takeaway every month.”

But North thinks it’s a much bigger problem that they hope to solve with grocery deliveries.

“I think the reality for South Africans is that food delivery or restaurant food delivery is still a luxury for most people, whereas with groceries every customer, every person in South Africa, is buying groceries today. So, the opportunity for us to partner with Mr D and to get grocery delivery right is really, really massive. And I think, together, we can build the best customer offer for grocery delivery in the country.”

Takealot has 14,000 drivers and has established its own trust relationship with its 2.5 million customers, believes Alex Wörz, CEO of Mr D Food.

“It’s really about bringing the strengths of both companies to the table. And that’s what makes the proposition. From a Mr D perspective, it’s certainly more than just the logistics,” he told DM168.

The new arrangement will be piloted in August in a few stores around Cape Town –to “stress test the system and the processes, as well as to learn, because there’s a lot of learning that still needs to happen in order for us to ultimately ensure that we can really deliver on our promise of a superior customer service”.

Deliveries in all nine provinces are likely to be running by the first quarter of next year.

Since the Bottles app integration, Pick n Pay has seen a more than 300% increase in sales since August 2021, says North.

Bottles co-founders – Vincent Viviers and Enrico Ferigolli – are the heads of the retailer’s omnichannel operations. Clearly their experience of starting a booze delivery service, which pivoted to groceries during 2020’s Covid lockdown, is paying off with those increased sales.

It’s a strategically sound move by Pick n Pay to focus on its core competencies, as it tries to realign its brand and offerings. DM168

This story first appeared in our weekly Daily Maverick 168 newspaper, which is available countrywide for R25.

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