Do you love to cook? I don’t. In fact, I’m not very good at it. But that doesn’t stop me from ordering food online and delivering it to my door. And that’s thanks to companies like Wolt, Bolt, and Glovo, making it easier than ever for people to shop for food online.
I’ve been using Wolt for a while now. I even started ordering groceries from them. It’s straightforward and handy. I don’t have to go to the store anymore. Instead, I order what I need, and it arrives on my doorstep instantly.
MicroCommerce platforms like Wolt, Bolt Glovo, etc., are doing to retailers exactly what Amazon did to Toys’R Us.
They’re making it so straightforward that they’ve saved me time going to the store and are shifting my food and product shopping habits.
However, there is a catch, at least for retailers.
MicroCommerce platforms like Wolt, Bolt Glovo, etc., are doing to retailers exactly what Amazon did to Toys’R Us.
How Did Amazon’s Dream Alliance with Toys ‘R’ Us Turn out Badly?
In 2000, Amazon.com and Toys “R” Us announced a groundbreaking strategic alliance in which the world’s then-largest toy retailer would make Amazon.com its exclusive provider of toys and baby products online in the U.S. It was a match made in eCommerce heaven—or so it seemed.
“This is a big win for Amazon.com, but an even bigger win for Toys ‘R’ Us,” Jeff Bezos, Amazon.com’s founder, and CEO, said at the time.
“This is a big win for Amazon.com, but an even bigger win for Toys ‘R’ Us,” Jeff Bezos, Amazon.com’s founder, and CEO, said at the time.
The alliance was supposed to be a game-changer for both companies. Toys “R” Us would get a massive online presence overnight, while Amazon would gain credibility and scale in the toy category.
It was supposed to give Toys “R” Us a much-needed boost in the digital age since they didn’t have the infrastructure to quickly and efficiently fulfill online orders. This led to extended shipping times and a lot of frustrated customers.
Toys “R” Us was also struggling, as big-box retailers like Wal-Mart were starting to eat into its market share. So the company hoped that teaming up with Amazon would help it better compete against these new challenges.
But it turns out that the deal did more harm than good.
All of the problems came to a head only three years later, when Toys “R” Us announced that it was pulling out of the alliance.
The failed alliance was a huge setback for both Amazon and Toys “R” Us—and it ultimately contributed to the demise of the iconic toy retailer.
In 2018, Toys “R” Us filed for bankruptcy and announced that it would be closing all of its stores. The company blamed its struggles on several factors, including its failed Amazon alliance.
Toys ‘R’ Us has now closed its doors, and Amazon is dominating the toy category.
While the deal lasted, Amazon acquired all of Toys ‘R’ Us’s expertise in the toy industry. Where and how to make and distribute toys. Who are customers, and what they want to buy were just a few of the questions answered.
They obtained all of the data about consumers that purchase toys. What they like, buy, ad to the card, etc.
Amazon positioned itself as the best place for toys. And soon enough, customers did not care what brand of toys they bought. Instead, they were more interested in the service they were getting from Amazon.
And Amazon is the king in providing the best service to its customers. It is not their mission statement for nothing. “To be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online, and endeavors to offer its customers the lowest possible prices.”
While Amazon was investing in technology, knowledge, and systems, Toys ‘R’ Us was resting on its laurels and making money on Amazon without having to worry about creating or gaining a presence online.
They thought they had tried it on the internet once, and it didn’t work out as well as they had anticipated. So it was simpler to let someone else handle it.
But customers tend to stick with places that offer them better value for their buck. They develop loyalty and trust towards that “place” that provides them more added value.
Customers tend to stick with places that offer them better value for their buck.
Ultimately, what killed Toys ‘R’ Us was not Amazon. Instead, it was the loss of customer trust.
Shoppers stopped seeing Toys “R” Us as the go-to destination for toys, and there was no coming back.
Toys “R” Us was too slow to adapt to the changing retail landscape, and Amazon was there to fill the void.
It’s a cautionary tale for all retailers: if you don’t keep up with the times, you will be left behind.
And in our narrative, Wolt is Amazon that has arrived in town and is changing the game.
They’re creating a whole new way to shop on a daily basis. They’ve created the MicroCommerce way of shopping.
What is MicroCommerce?
Micro commerce is a new way of shopping, where buyers and sellers connect with suppliers through a mobile app or website. This means shoppers can order anything they want, usually in smaller quantities. Wolt is an example of a micro commerce retailer.
If you didn’t notice, I used the word Retailer 😉
They sell food and other items through their mobile app or website.
What are the benefits of MicroCommerce?
- You can order anything you want, anytime, anywhere.
- Simplified and accelerated user shopping experience.
- You can find what you’re looking for quickly and easily.
- You can order from multiple sellers in one place.
- You can get your order delivered to you in minutes.
What are the disadvantages of MicroCommerce?
- There is a limited selection of items available.
- You may have to pay shipping fees.
- You need to make smaller quantity orders
What is Wolt?
A Simple explanation for someone who did not have the pleasure of using Wolt or a similar platform is that Wolt is a micro commerce technology company that connects restaurants and retailers with customers. They mediate between sellers and buyers through their app, offering services.
They don’t own anything they sell.
But that is how it was initially. Now Wollt is moving towards their warehouses (Dark Stores), where they will start selling food and other items through their mobile app or website.
Wolt is becoming a MicroCommerce Retailer that is changing the game by creating a whole new way to shop on a daily basis.
What is a Dark store?
The term “dark store” refers to a retail store that has been closed to the public but is still used for fulfillment purposes. In other words, dark stores are used as warehouses where orders are packed and shipped from, but customers are not able to enter the physical store.
The concept of dark stores is not new, but it has been gaining popularity in recent years as eCommerce continues to grow. Many retailers are turning to dark stores in order to cut costs and improve efficiency.
There are a few advantages of using dark stores:
- Cost savings: Dark stores can be cheaper to operate than traditional retail stores because they require less staff and have lower overhead costs.
- Increased efficiency: By dedicating a store solely to fulfillment, retailers can optimize their process and reduce shipping times.
- Improved customer experience: With faster shipping times and lower prices, customers are bound to be happy with their purchases from a dark store.
The trend of using dark stores for order fulfillment has been growing in recent years as the eCommerce industry has boomed. Many retailers see dark stores as a way to improve their fulfillment operations and speed up delivery times.
How did Wolt become so popular?
Wolt has a few key things working in its favor.
First, the company has focused on providing an excellent user experience. The app is intuitive and easy to use, and the delivery process is quick and efficient.
Second, Wolt offers a wide range of products, including food and non-food items. This makes it a one-stop-shop for many people’s needs.
The company has built a strong brand associated with quality and convenience.
We must not overlook Wolt’s role in saving the day during the Covid-19 lockdown when restaurants were forced to close. The chain of lockdowns threatened restaurants with bankruptcy.
We must not overlook Wolt’s role in saving the day during the Covid-19 lockdown when restaurants were forced to close.
However, Wolt and similar platforms with vast delivery networks came to the rescue. When restaurants and people could not communicate with each other, Wolt was there to connect them.
All of these factors have contributed to Wolt’s tremendous growth. The company has become one of Croatia’s most popular micro-shopping apps in just a few years. And as its user base continues to grow, so does its potential to disrupt the retail sector.
Are Retailers Feeding the Monster that will eat them later?
Retailers are selling their items on Wold since it is easier and more convenient for them.
For a low investment, they got a new sales channel that is a lot easier and less expensive to set up than setting up own operation.
Investing in eCommerce, developing brand awareness, arranging financing and marketing know-how is resource-demanding. It takes a significant sum of money to develop a new vertical.
It is much easier if you have a partner who solves your problems in an instant and saves you a lot of money.
At least, that is what it seems.
But in reality, Retailers are feeding Wolt with data about their customers daily. They are giving them data on what they are buying, where, and how long they are willing to wait for the delivery.
Soon Wolt will know more about Retailers customers than they do.
Soon your Partner will Know More about Your Customers than You Do.
And as Wolt continues to grow, its potential to disrupt the industry will only increase. Sooner or later, traditional retailers are going to have to start taking Wolt as a threat. Otherwise, they may find themselves out of business.
There are a few key things to pay attention to:
- the company could use its data to identify new trends and unmet customer needs. This would allow Wolt to launch new products and services that address those needs, taking market share away from traditional retailers.
- Wolt, Bolt, and others are constructing their own warehouses (Dark Stores), where they have every merchandise available in the retail store. Locations of those Dark Stores are not in prime locations, their overhead expenses are lower, and they can sell products at a lower price.
- Wolt is educating new generations of shoppers. The next generation does not want to walk around the store but instead wants quality time. Going to the store is a waste of time. It can be used to watch TV, play at home, spends family time, or do nothing—so many more interesting things to do with free time.
- Wolt could use its brand and customer base to launch a private label product line. This would allow the company to sell products at a lower price than its competitors, putting even more pressure on traditional retailers.
- The location of a retail store is becoming irrelevant. If a customer can get an order delivered in 15 minutes, he or she is unconcerned about the location they got their bananas.
- Customer loyalty is linked to convenience and price.
Is it too late for Retailers to avoid the Toys ‘R’ Us scenario?
Wolt is awesome. It provides added value in the area where others don’t have anything to offer.
It saves time.
And retailers don’t have anything to offer in terms of time.
They can offer bananas for a better price. And that is easy to beat. Anybody can offer a lower price for a bestselling product.
Retailers first need to understand what they are up against. They need to understand that the rules of the game have changed and that Wolt is not just a food delivery service.
Wolt is a technology company that uses data to its advantage.
The main advantage that Wolt provides is that it saves time. And with so many people seeking for more time, time is geting more valuable by the day.
In order to compete, retailers need to start collecting data about their customers and using it to improve their operations.
They need to focus on creating a seamless online and in-store customer experience. And they need to invest in technology and infrastructure that will allow them to compete with Wolt on convenience and price.
It’s not going to be easy, but it’s not impossible. If traditional retailers don’t make these changes, they will inevitably go the way of Toys ‘R’ Us.
What do you think? Will Wolt be the downfall of retailers? Or will they be able to adapt and compete? Let us know in the comments! Thanks for reading.
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