How Empório da Cerveja increased sales through regionalization and dark stores
VTEX enabled Ambev’s ecommerce channel to triple its revenue in some regions of Brazil and boosted its value proposition.
Empório da Cerveja is an ecommerce store specialized in the Ambev beer portfolio, one of the largest companies in Brazil. It has a catalog containing products ranging from crafted and imported beers to local labels. The brand’s value proposition focuses on the premium and highly premium segment and operates nationwide.
Empório da Cerveja, a VTEX client since 2018, exemplifies the potential of omnichannel and logistics efficiency through its catalog regionalization and dark store strategies. In three years, the company has changed its business model by increasing the number of selling points dedicated to ecommerce – dark stores – and regionalizing its portfolio to customize its service to different locations in Brazil.
What are Dark Stores?
Dark stores were created in England, became widely popular in Europe, and rapidly expanded to Brazil. They arose as a strategy for fast delivery, aimed at saving customers’ time, and as a resource to increase companies’ profitability and logistics efficiency. Briefly, dark stores are closed stores that act as mini distribution centers in a given region.
Generally, in a large distribution center, the logistics operator handles deliveries to a whole city. Regardless of the customer’s address, the product is shipped from the same location. In a dark store model, however, there are predefined city locations to serve different areas. Products are previously selected for each one of them based on the local demand.
This strategy goes along with the trend of an increasingly demanding market, in which the shopping experience and convenience are more valuable to consumers, who prioritize delivery time and shipping cost over a special price.
“Today’s urge for a quick and affordable delivery, being close to customers with the right product at the right time is what makes companies look for new ways to leverage the omnichannel.”Rafael Colozza, Account Success Director at VTEX
Empório da Cerveja and dark stores: aiming for logistical efficiency
Faced with a digital consumer that values delivery time and conditions, retailers face an even greater challenge when their main product is beer.
“Beer is a heavy, fragile product with an expiration date, making it highly complex to sell via ecommerce. Besides, the consumer can easily find it anywhere, making it even more challenging for us to differentiate ourselves in the market.”Fábio Glezer, Head of Ecommerce at Empório da Cerveja
In this sense, longer delivery routes are not a viable option for products such as beer. For example, to operate an order from Empório da Cerveja’s Central Distribution Center in São Paulo to Recife, the shipping cost is higher than the beer’s cost. It also makes no sense for the consumer to wait days for a product while the same could be in stock near them.
Because of the beer’s wide penetration and distribution throughout Brazil, Ambev grasped an opportunity to leverage its ecommerce value proposition.
“We looked at our structure and noticed that we already had dark stores. They were ready but not operating. We are talking about our franchises, sales points, and local operators who are willing to make deliveries for a lower cost than the distribution center’s own operation.”Fábio Glezer, Head of Ecommerce at Empório da Cerveja
The project’s pilot launched in early 2019 was created when AMBEV, one of the country’s biggest industries, easily identified potential operators that could make deliveries for each region.
“The customer does not, and should not, have to wait for a product like beer. Even in larger transactions, such as events, the purchase is made 3 or 4 days in advance. When Emporio da Cerveja couldn’t deliver the order within this period, it automatically lost the sale, as the consumer would find another solution by going to the supermarket or through an APP.”Fábio Glezer, Head of Ecommerce at Empório da Cerveja
Ambev mapped the demand per region and considered data such as the number of accesses and order volume to define the markets to host the first dark stores to make the operation possible.
“We relied on VTEX to make this process possible. The architecture of the operation was a four-handed work, and the platform’s technology was key to give us total control of the operation, from end to end.”Fábio Glezer, Head of Ecommerce at Empório da Cerveja
Today, Empório da Cerveja has 20 dark stores all over Brazil. Most of them have a simple structure, consisting of containers storing only the inventory.
“They are elementary operations, as they take around 15 days to start selling. All it takes is to plug the product into the VTEX platform, which is very simple, and then it becomes available to our customers. With VTEX, we’ve made this model scalable, and we’ve overcome the last mile frontier.”Fábio Glezer, Head of Ecommerce at Empório da Cerveja
The major challenge in the implementation and management of the dark stores was linked to portfolio definition. After all, in its main warehouse, Empório da Cerveja has almost 700 labels, so its strategy was to focus on regionalization.
Betting on a local portfolio as a customization strategy
Beer is, indeed, widely penetrated in the national territory. However, each state has its favorite labels. The beer products relevant in Belo Horizonte are different from those in Porto Alegre or Salvador. To meet these regional particularities, Empório da Cerveja decided to take the curve A products to all parts of Brazil and, also, to work with local producers to ensure those products that are regionally relevant.
By offering a regionalized assortment, Empório da Cerveja gains customers’ trust by positioning itself as a specialist in the segment throughout Brazil. Besides the commercial benefits, the brand is strengthened by incorporating local brands into its portfolio, thus becoming closer to its customers.
“We can create a product mix suitable for each region in Brazil. For example: in Porto Alegre’s dark stores, you can find Polar, a local beer that cannot be found in any other state’s catalog.”Fábio Glezer, Head of Ecommerce at Empório da Cerveja
In the ecommerce operation, regionalization happens automatically. The customer’s location can be obtained from the browser, via IP, or the user can enter their zip code on their first access. The process does not create any usability problems from the customer’s experience either on the site or in the application and does not interfere with conversion.
“The regionalized catalog is a way to increase the efficiency of the dark stores. This strategy promotes the sale of local products, and also enables Empório da Cerveja to adjust prices and promotions according to factors such as seasonality and commemorative dates in each region.”Rafael Colozza, Account Success Director at VTEX
Continuous growth and expansion
Empório da Cerveja plans to serve Brazil through dark stores and continue to scale the regionalized service strategy, not yet available in all its units. The company also plans to use the new stores not only as in-store selling points but also as ship-from-store and pickup in-store options to serve the ecommerce.
The company also believes in the potential of outsourced bars as future dark stores. In the model, the bars leverage the Empório da Cerveja platform as another sales channel, and the company gains from the capillarity of their inventory, acting as a sort of marketplace specialized in the segment.
The NPS of the dark stores is among the main KPIs analyzed by Empório da Cerveja, which beats around 80 in all of the 20 stores throughout Brazil. The company identified a high level of customer retention from the strategy, which can also reflect financial results. In some cities, the sales tripled after the dark store.
Furthermore, Empório da Cerveja achieved greater profitability from the reduction in the cost of the logistics chain. All dark stores give customers free shipping, part of the negotiation with partners. The products shipped within the same state also saves shipping costs.
“We believe that the combination of delivery time and cost and better product distribution is what makes the dark store operation so advantageous.”Fábio Glezer, Head of Ecommerce at Empório da Cerveja