“30 million people, we estimate, live within a kilometre of a 7-Eleven and we send trucks to those 2,100 stores every day. We’ve got a very efficient and very low-cost supply chain,” Victor Paterno said in an exclusive interview with WARC. (For more, read WARC’s report: How 7-Eleven Philippines is taking e-commerce mass market.)
“Basically, we are using our logistics efficiencies to enable new e-commerce models. To the layperson, you basically come [into a 7-Eleven store] with a bar code of something you like that you’ve seen online or in print, and you have it scanned at the store and that constitutes an order. You pay and you get texted when it comes, and you pick it up with your claim bar code,” Paterno explained.
7-Eleven’s highly efficient store delivery operation allows customers to receive goods purchased via online kiosks in 7-Eleven stores as soon as the next day in metro areas, and within just a few days in more remote areas. The initiative launched in late September in Manila and rolled out nationwide in October.
While Filipinos are often suspicious of digital payments, Paterno believes 7-Eleven’s huge retail footprint and brand trust will allow it access to segments that other pure-play e-commerce providers have not been able to access, especially in provincial areas.
“We think that wariness will help somebody with a strong brand reputation, which we’re fortunate to have,” he said.
7-Eleven’s hybrid ‘agent/convenience store’ model capitalises on the preference of Filipinos to do business with people, rather than corporations, but is backed by 7-Eleven’s brand recognition and trust in the country.
“Our hypothesis is that people here trust people more than institutions… we’re starting with our store clerks [as agents] – we got a nice bump in sales when we set up the pilot in 50 stores,” Paterno said.
He estimated the potential market size at 90 million Filipinos. “We’re going after customers who can’t afford the [purchase amount] minimums that [e-commerce competitors] used to charge, who don’t trust the idea of giving money and then some goods showing up, who want the comfort of a physical store. Those are the people we’re going after.”
Sourced from WARC