Supermarkets, Kolonial.no | You think Amazon contributes to the development of the Norwegian grocery trade:

Online grocery shopping is on the rise, and this is also seen by Jacob Tveraabak, CEO of Strongpoint, which is a provider of online shopping solutions and store technology.

He recently wrote a post in Dagens Næringsliv saying that online grocery shopping will grow, thanks to the crown crisis and the Nordic launch of Amazon.

Tveraabak tells Nettavisen that it is only a matter of time before Amazon arrives in Norway. Although it will take time before they get started on groceries, he believes Norwegian grocery players need to be quick on the field to avoid getting hit by the American e-commerce company.

– If you’re going to beat Amazon, it doesn’t help to start shopping for groceries online six months early. Amazon is thinking of growing and pushing prices, and could go beyond the margins of existing suppliers, he tells Nettavisen.

It hasn’t been many weeks since Amazon announced that they will be set up in Sweden, but when that will happen is not yet known, according to DI Digital. There is also speculation that they will be set up in Norway, but nothing has been confirmed yet.

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For the benefit of consumers

Tveraabak believes that Amazon’s advantage is that they have a wealth of experience in managing online stores, and have repeatedly shown that they operate as a new company even though the company is very large.

They think like it’s day number one all the time, as it makes them willing to think a lot about growth, perhaps at the expense of short-term profitability, he explains.

Tveraabak believes that it is positive for consumers that Amazon is finally entering the Norwegian market, even though it may be several years before they invest in online grocery shopping.

– Consumers can rejoice. The crown crisis has shown that online shopping and food home delivery is something consumers want, and when grocery players know Amazon is coming at some point, they need to take action now, he explains.

While it seemed like a waste to invest in online food shopping until now, it will pay off for all parties if you invest enough, Tveraabak believes.

– It will not be a good return if you invest on a small scale. But now they know that the demand is there, and grocery players who don’t shop online today will get it, he says.

Believe that e-commerce is worth it

Since Strongpoint offers online shopping solutions and in-store technology, they wanted to take a closer look at consumer perspectives when it comes to online shopping. Therefore, Nordstat conducted a survey on your behalf. Tveraabak highlights two interesting finds in particular.

– We see that loyalty is very high once you have found a supplier with whom you are satisfied. For more than 80 percent, it is not relevant to change, says Tveraabak, explaining:

– When you buy food online, the store knows you extremely well and adapts your shopping habits to the store. So you also get a good user experience and the loyalty will be high.

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The other interesting finding they made was that consumers’ willingness to pay is almost as high outside of Greater Oslo as it is in Oslo.

– The result of the discovery is that existing supermarket chains with stores across the country, not just in Oslo, have a huge advantage when food ordered online must be delivered to consumers, says Tveraabak.

He believes the consequences for established grocery players can be dramatic if they don’t have an online purchase offer. If the growth of online grocery shopping continues to increase, the pressure in some parts of the country will be so great that it will affect the viability of physical stores.

– With the growth of online purchases, turnover in physical stores is decreasing. If you do not participate in online shopping and home delivery, stores will experience a stagnation in sales. It won’t take much loss of turnover before margins are squeezed, he explains to Nettavisen.

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Don’t fear Amazon’s entry

Karl Alveng Munthe-Kaas, founder and CEO of Kolonial.no, is not afraid of Amazon.

– We are guaranteed not to be beaten by Amazon on the price of online groceries, he says.

Trump’s boss Truls Fjeldstad at Norgesgruppen told Dagens Næringsliv that he believes Amazon will enter the Norwegian market for dry goods. Fresh produce home delivery and proper investment in the Norwegian grocery market, however, he believes it will take even longer before it can become relevant.

Munthe-Kaas also believes that it will be time before Amazon becomes a competitor.

– In the long term, you probably have to deal with Amazon, but now they are not a direct threat to us in the short or medium term, he says.

Will win in loyalty

Meny is also not afraid of competition from Amazon or other online grocery players for that matter.

– We welcome all competition. We think increased attention to home food delivery is a good thing, says Knut Nyløkken, Meny’s director of e-commerce.

He points out that there are still many who are not yet aware of or have used food delivery, especially outside of Greater Oslo.

– We think it is positive that people know us and that we have the same wide selection, including fresh produce, in our stores and online, he says.

In other words, Menu will earn customer loyalty.

While Meny and Kolonial have been delivering food at home for a few years, Coop jumped into the wave during the start of the corona pandemic this spring.

– We welcome Amazon and fear them no more than other competitors, says Bjørn Takle Friis, Communications Director at Coop Norway.

However, he points out that the e-commerce solution they have now is not a permanent solution. So far, there is only one measure during the crown crisis, and they have not decided whether they will continue to shop online permanently. In any case, they are not afraid of Amazon.

– We work daily to face all kinds of competition. There’s a lot of competition with other grocery players and other things that can take money out of your food budget, like restaurant visits, border trade, movie visits, and travel, he says.

It will take a long time

Munthe-Kaas believes that Kolonial will be preferable in terms of price and selection, even if Amazon came to Norway and tried his hand at the grocery market.

– I am convinced that you want everything in one place when you buy food online. Amazon may sell products within certain product groups, but it’s difficult with refrigerated products, he says, explaining:

– There is talk of starting a central warehouse in Sweden, but it is not close enough to serve Norwegian customers on short notice. It will probably be a while before they start in Sweden, and even longer before they get to Norway.

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The grocery entrepreneur believes that online groceries will become more popular in the future.

– Now only about two percent of food is sold online in Norway, compared to about 12 percent in the UK. But Norwegians are ideal online customers, and I don’t see any reason why we can’t reach British standards here as well. We have potential, he says, adding:

– Many have seen that buying online is cheaper than in the store, and the selection is better.

Feel free to give your opinion in the survey before reading further, the article continues below.

Billions of turnover

When the corona pandemic swept through Norway in March, Kolonial didn’t get a big boost. The pressure has remained high even as society has become more and more open.

– Sales compared to last year have almost doubled, and it’s pretty clear that those who tried shopping for groceries online for the first time under the crown have largely held up. We have gained tens of thousands of new customers and many have chosen to continue shopping with us, says Munthe-Kaas.

The customer base has also changed. Families with children are still the largest customer group, but the number of customers over 50 has increased. Now they see that the customer base in this age group has increased from about 23 percent to 37 percent.

In July, Kolonial. Did not exceed a turnover of one billion crowns. Now they bet on doubling the sum.

– We expect to sell for just under two billion kronor this year, he says.

July is normally a fairly quiet month and at the same time, they tend to sell much better in the fall than in the spring. When things have gone so well so far this year, they see no reason why they can’t reach the goal.

– The turnover of merchandise in our warehouse corresponds to 40 supermarkets, says Munthe-Kaas.

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Has exceeded last year’s turnover

Meny is also growing strongly right now, thanks to the crown crisis.

– In the weeks after the appearance of the crown, the number of orders tripled. In week 25 we exceeded the turnover of last year. Also this summer, we have also had growth in orders compared to last year, says Nyløkken at Meny.

However, he points out that they have seen a good and steady rise in the online store in recent years, and not just after the crown crisis.

Meny and Kolonial.no do not deliver throughout the country, and mainly in Eastern Norway. However, Meny also ships to Trondheim, Bergen, Stavanger, Sandnes, Sola, Klepp and Kristiansand. Coop, on the other hand, ships to much of the country.