As a reader of Connected World it is a safe bet that you have shopped online with a retail merchant. You may have used a connected device such as a PC, laptop, tablet or smartphone to access the retailer’s site, search for an item, put it into your online shopping cart, and checked out. It is also a safe bet to say that if you have shopped on more than one retailer’s site, the experiences have been very much the same: Search, add to cart, view cart, check out. The “look and feel” of the shopping experience has been sterile and almost robotic. Not to mention the occasional frustration of trying to find the right combination of words to type into the search box to correctly return the item you want.
Online shopping for groceries and fresh foods has only recently become available to a broader consumer audience, yet, many merchants have deployed the same sterile technology used by the major retailers. When it comes to the things you eat, the online experience fails to satisfy.
Online grocery shopping is not like going to your local “brick and mortar” store, where you know the locations of the products in the aisles and the shelves. You can order fish, meats, and produce in the quantity you want, and see the attendant weigh your order on a scale. Grocery shopping is a more personalized experience, one that has not translated well to online venues. A different, more intuitive, personalized and localized online experience has been missing.
Until now that is. To understand just how powerful an online grocery shopping experience can be, watch this video.
While covering the Dublin Web Summit in early November, Connected World columnist and reporter, Tim Lindner, came across Grability, a company which is defining the new standard in mobile grocery shopping, as defined by the video you have just watched. While conversing with the company’s Co-Founder and CEO, Sebastian Mejia, it became apparent the global scope of the Internet of Everything makes for some fascinating stories.
Mejia co-founded Grability in New York and in 2013 it was one of the five winners of Intel’s annual Desafio Latin American entrepreneurs’ awards. Grability secured contracts with the largest drugstore chain in Colombia, La Rebaja Movil, and with Olimpica, Colombia’s second largest supermarket chain.
Grability has leveraged its Hispanic roots to become the mobile supermarket shopping platform for El Corte Ingles, Europe’s largest department store group.
Recently, Grability received investor funding by retail entrepreneur J. Christopher Burch, founder and CEO at Burch Creative Capital to focus on expanding business in the United States.
Lindner recently caught up with Mejia for a deeper dive into what has accounted for Grability’s rapid growth and what may lie ahead.
CW (Connected World): Sebastian, thank you for taking time from your very busy schedule to talk with us. Your “pitch” at the recent Dublin Web Summit was very well done and intriguing to say the least.
SM (Sebastian Mejia): Thank you Tim, very happy to be here.
CW: Please tell us what need you saw in the consumer engagement space that was so compelling that you started a company to address it?
SM: Seventy percent of all retail sales are for the products sold by the Fast Moving Consumer Goods (FMCG) industry, and it is by far the largest vertical in retail. However, only 3% of the goods sold are being bought online today. I think this is shocking, especially when you compare it with the disruption that is taking place in other retail verticals like fashion and electronics where online sales are booming. It speaks of a sector that is clearly underperforming. After all, buying a box of cereal cannot be more difficult than buying a pair of shoes.
So, what’s going on here? It’s a problem related to the online shopping experience. Today, we have moved away from the basic driver of shopping: an easy to use, fast and beautiful way to shop. Shopping is dull, time consuming and disconnected from how we shop offline.
CW: What then is an ideal shopping experience?
SM: An ideal shopping experience must use the behaviors that make up the habit of going to a store: Walking around aisles, grabbing a product and throwing in a basket, these are actions that all of us regardless of age know how to do. It is a way of shopping that is 100% mobile, very fast, intuitive and frictionless. This is exactly what we created.
At Grability we are obsessed about the shopping experience, and we believe it is the main driver of sales. When the behaviors of the ideal shopping experience that I just described are made part of an online store, a retailer can increase online sales from the current 1% to potentially 15% of total sales, and for the FMCG sector that means enormous potential for growth.
CW: In the introduction above, we provided a link to a video on Vimeo that provides a very concise but excellent orientation to the Grability shopping experience. One of the more interesting things is that you organize the shopping experience to mimic a shopper’s experience in the physical, brick and mortar store. The use of “aisles” online parallels the actual layout of the brand’s store aisles, does it not? Does this have a measureable impact on the shopping experience?
SM: It does, and it’s precisely the core of what we do: shop as how you’ve always shopped, with products on shelves and planograms. Good design must respect habits and make things easy for consumers; this is the key driver of adoption and use of a technology.
The measurable impact we provide is clear: faster purchase time, higher conversion rates, increase in average basket size, increase purchases of fresh produce, happy customers (4.5 rating on the app store) and a larger customer base: those who bought online and those who never even tried because it was just too difficult to do.
CW: It would seem then that you have achieved the ideal based on what we saw in the video. What led you to this “obsession” that drives Grability? Was it frustration with your personal online shopping experiences?
SM: It was part personal frustration but also seeing how consumers where underserved in their online shopping experiences. We envisioned shopping as something that had to be easy and mobile. With this in mind the Grability way of shopping had to become a standard because there is simply no easier way to shop online. Why the obsession? Because an easy way to shop is what drives sales, exactly what we want our clients to achieve.
CW: How would you describe your solution in relationship to competitive solutions?
SM: When you look at the mobile space for ecommerce, what standard mobile stores (app or browser based) have done is basically to translate the same architecture of shopping in websites (menus, clicks, long lists, and small images of products) to a smaller screen. For a user who wants to buy 50 items, this leads to a time consuming and poor experience.
We started with a clean canvas that had a basic principle: let’s bring the habits of how we’ve always shopped to this experience: Walking around aisles, seeing products on shelves, grabbing them and throwing them in the basket, buying fresh produce with a scale as if you where in the store. These familiar habits enable a technology to be easily adopted, so that the person who has never bought online can actually try it and make it the preferred way to buy.
We strive to be the company that knows the most about mobile retail, and that means building a solid platform: The UX, a tool for retailers to manage their mobile store on real time, behavioral data capabilities to understand the shopping behaviors of consumers and a robust advertising platform for brands to promote products. This also means we are flexible to fully integrate with our retail partners legacy ecommerce systems no matter how complex our outdated their backend is, or even when they do not have ecommerce.
CW: An important aspect of your solution is that Grability is “transparent” to the shopper. All they see if the store brand. Does this transparency help or hurt your ability to grow the business?
SM: I see this as an advantage for our business.
We are providing retailers a scalable solution that allows them to participate in the mobile ecommerce revolution. These are large retailers with thousands of clients, so that gives us the ability to reach a vast amount of consumers immediately and obtain results. We also see ourselves as partners of our clients, which mean we build a strong relationship for the long run to improve their business and share the success.
We are a global company with clients in 3 continents, which mean there are hundreds of potential clients we can work with in each market, an enormous opportunity for our company.
CW: How did you come up with the name of your company?
SM: Simon, my partner, and I couldn’t find a free domain for our company, so we had to put two words together and come up with a new word: Grability means the ability to grab. Together these words speak of how to bring offline experiences into the online space, to make it easy for consumers to shop, a core aspect of what we do.
CW: Can you describe your current customers and what were the key factors in their decision to use your solution?
SM: Our clients are large supermarkets, pharmacy chains and we are also talking to leading beauty and cosmetic retailers. Combined, they have billions of dollars in revenue and are the market leaders in their respective countries. El Corte Ingles is the largest department store in Europe (in revenue) and the largest company in Spain with more than 90,000 employees. All of our clients have in common a deep desire to innovate, to improve how their customers are buying their products and provide a better shopping experience to drive sales and gain market share.
The key factor in their decision is that they understand how Grability can dramatically benefit their business in the form of new sales and make it a strategic initiative in the company. They also understand how consumer behavior is changing with mobile devices. As El Corte Ingles puts it: with Grability we just opened 39 million new supermarkets (individuals) in Spain and put mobile shopping into customers’ pockets. It has also been very important that we can handle all of their systems complexities (like dealing with inventories north of 50,000 SKUs) and integrate seamlessly with their legacy systems.
Our clients are also leading FMCG brands like P&G, Coca Cola, and Mars. With Grability, brands have a superior way of promoting their products in mobile, the channel where consumers are spending almost a quarter of the media consumption time. These advertising opportunities we provide are mobile, non-invasive (away from banners), targeted based on user data and aligned closely with the buying intent of the customers.
CW: You are based in New York City, but selling your solution internationally. What are the unique challenges to doing business in the U.S.?
SM: The U.S. is a priority for us, but I have been a bit more challenging as decision makers in this sector are not giving the online channel the attention it deserves. After all, are only 3% of their total sales today. However, they know that being a slow adopter has the potential to significantly damage sales and erode market share. Given the success we are seeing overseas with our clients, and the rapid transformation taking place in the U.S. with online players entering the grocery business, we expect the U.S. to be a key market for us and we cannot wait to launch in New York City.
CW: Does what you offer to merchants better enable them to meet the challenge of same day fresh food delivery?
SM: I believe so. Many supermarkets today have delivery capabilities in place, but find it hard to build a profitable fresh food delivery business. Although we do understand the complexities that the “last mile” of delivery represents, it is also a problem of lack of sufficient orders. Economies of scale can only be generated with a larger amount of orders, and this is exactly what we provide to retailers: Orders to build a profitable delivery business.
Let me also add that we enable clients to order from a specific store, meaning that retailers we are working with are successfully delivering orders from a that same store within a certain geographic area that is closer to the end consumer, which lowers the costs of relying on large distribution centers.
CW: Is the use – and success – of your solution limited to grocery and food retailing, or can it be adapted to other retail product lines, such as apparel? Are you planning for this in 2015?
SM: We are focused on FMCGs, including supermarkets, beauty and cosmetics and pharmaceuticals. However, we do see plenty of other verticals that where we could create amazing shopping experiences, like electronics, shoes, certain type of apparel, books and other items. It is definitely in our 2015 plans.
CW: Who is Sebastian Mejia and why did you decide to become an entrepreneur?
SM: I guess I always wanted to be an entrepreneur, and even as a teenager it was clear for me that I would pursue the entrepreneurial path. I was very passionate about business and innovation. I was born in Colombia and studied business and economics in Europe before moving to New York City. Passion and curiosity are two big drivers for me and is what motivates me to create new businesses.
CW: Where do you see Grability 12 months from now?
SM: We have a beautiful opportunity to improve the ecosystem of retail in the FMCG space for retailers, brands and consumers. I truly believe Grability makes this sector perform better and is a “win – win” for all. Also, the challenge of changing the way people buy goods is something that we are passionate about and we want to make Grability the standard way of shopping on mobile. This means we will continue to work with leading retailers and brands and dramatically increase our client number, especially in the US.
If along the way we can disrupt the FMCG industry that would also make me very happy.
CW: Sebastian, thank you again for sharing such an interesting story with us. Best wishes for success and we hope to catch up with you a year from now.
SM: Thank you Tim. Looking forward to remaining in touch with you and your readers. Hopefully you can be shopping with Grability soon in New York City.