How grocery chain Tía used ecommerce to keep sales up during lockdown
Tía, an Ecuadorian company founded by two Czechoslovakian immigrants in 1940, has grown from a small family enterprise to the biggest name in grocery retail in the South American country, amassing 230 brick and mortar stores in 106 cities. The company has a mandate to increase its value every year and, in 2020, despite the challenges to every business worldwide and an ecommerce adoption below 4% in Ecuador, Tía managed to use this tool as leverage to keep serving as many customers as possible and push sustained growth.
After more than three years of research, Tía started its ecommerce adventure in 2018, becoming the very first online store in the grocery sector of the country. This gave the company the chance to perfect its processes before 2020, when its brand recognition made it one of the best options for the Ecuadorian population locked down at home.
Big goals and big lessons
The company, used to operate as a purely physical retail operation, faced some challenges during the implementation of the first phase of its ecommerce solution. The majority of online orders were fulfilled by warehouses, which usually dealt with boxes of products and not with single units or small orders.
Tía chose VTEX as its partner for the ecommerce business, a decision that Tía’s Ecommerce Director, Jael Gudiño, thinks “allowed the company to adopt solutions that were already successful in other Latin American markets”. Lately, the website has adopted dropshipping, which now makes up 35% of total sales, and a wide range of payment methods, including its own credit solution.
“VTEX probably already has what we’re looking for, so this allows us to pick and grab whatever we need and become more nimble and able to adapt. This way we can build up to a goal that the company can set up in their strategy, independently of the company size: it’s scalable and easy to adopt. Every company aims to project itself as an omnichannel.”Jael Gudiño, Ecommerce Director at Tía
Making easier to find what’s important
In 2020, local laws forced Tía to give priority to essential products. As a response, the company created essential combos that included several products that the clients needed during lockdown, and presented them front and center on its website. The combos simplified delivery logistics for the company and decreased the amount of orders that required fulfillment.
The change forced the average ticket price down, but the number of daily orders grew up to 900%. This growth was supported by the inclusion of more payment methods besides credit cards, as well as home delivery services: a big differentiator from competitors. VTEX’s Commerce Platform, with servers hosted on Amazon Web Services (AWS), was vital for this scalability.
“We faced some challenges that are common in Latin American markets, because ecommerce isn’t as widespread as it is in developed countries. People tend to be uneasy about using credit cards or about possible frauds, so having Tía’s support gives the clients some reassurance.”Jael Gudiño, Ecommerce Director at Tía
Getting more for less
The company is also undergoing a process to onboard new sellers through an extended product catalogue, which includes selected products that are procured by these sellers, but sold and invoiced directly by Tía. The project is a growth opportunity for Tía, as it would enable the grocery retailer to sell new product categories that would’ve been otherwise unavailable because of store floor limitations. These new products are only sold online, and the virtual catalogue is shown to customers by over 200 employees armed with iPads across Tía’s 235 store locations, with full control of costs and retail price. Customers can also opt for Tía’s financing on the spot – offering customers Buy Now, Pay Later sort of solutions makes it more likely high-value orders are actually placed.
“The main idea was to sell chairs, tables, big screens that are complicated to display physically in-store. That’s how we started, but then we transformed to include appliances and technology that our clients look for, but that we didn’t usually sell.”Jael Gudiño, Ecommerce Director at Tía
The project was launched in December 2020, and in January the total orders had grown around 40% through the extended catalogue project. Additionally, AOV (Average Order Value) for offline orders increased from $10 to 271 USD, with transactions skyrocketing by 296%. This was achieved despite limitations in the seller approval process, because Tía wants to attract high profile brands in order to care for its perception amongst clients.
To date, the company has about 2.300 products online that are not displayed in-store. The goal is to reach 7,000. Total sales have grown for the past two years and the company has a bright future in mind for its grocery ecommerce channels.
“We do special offers for online products that differ from the ones in-store to drive clients to the website. Both forms of commerce complement each other, because clients go to the website to check our catalogue, even if they choose to buy in person. We don’t see it as cannibalization, but as another tool to drive sales.”Jael Gudiño, Ecommerce Director at Tía
The potential for ecommerce growth in the region is immense and consumers seem ready to move their transactions online. So far there are few options in Ecuador, but Gudiño is confident that the demand will create the offer, and Tía is in a particularly good position to take advantage of that revolution.
“We try to be in the best place possible, and we’re growing our architecture to do just that.”Jael Gudiño, Ecommerce Director at Tía