Continente online : building a success story in the food retail business

Abstract

The online marketplace has grown exponentially during the last decade and today most click-and-mortar businesses have developed Internet sales channels. The online food industry, and more specifically groceries, presents a huge challenge for managing operations online. It has proved to be quite difficult to provide online customers with a positive experience in shopping for groceries, given the numerous challenges faced, such as: the demand to manage the significant number of products available, the need to have both stocks and pricing updated and the requirement to optimize delivery protocols. Nevertheless, the online food retail business has been steadily growing during the past few years. Continente Online (CO) is the online channel of the SONAE (Modelo Continente Hipermercados, SA) hypermarket (a European term for a large supermarket combined with a department store) chain, which is the Portuguese leader in food retail and is usually considered to be a success story in online groceries. Today, CO is perceived to have helped the group gain customer recognition and achieve competitive advantages over its direct competitors. After a temporary inoperability of the CO website, the manager of CO had to decide whether to continue to invest in the online operations or to terminate them. This turning point allowed CO to take into account what they have learned in the past and how they could use those lessons to successfully re-launch a new online channel. At the end, the company decided to increase the investment in the online operations and to build a new and stronger website for CO. This case presents the evolution and learning curve of the management team of CO. It highlights the experimental approach used by CO, which has led to a deeper understanding of the online channel. The case also examines how this channel is aligned with the overall business strategy of the company and also how it helps CO to achieve its innovation objectives and excellence in customer experience. The students will be asked to evaluate how the business model and growth strategy for CO position this company for the future.