How Sixty60 does it
GROCERY DELIVERIES: SURPRISING LEAD OVER PNP AND WOOLIES
PnP asap! runs risk of becoming an app only used by hardcore PnP shoppers.
Research from 22seven Insights shows that in the last quarter of 2021, Sixty60 – the service from Checkers – made up three quarters of all on-demand grocery delivery spend.
This is clear domination of the space, leaving PnP asap! and Woolies Dash trailing at 13% and 12% respectively.
These insights are derived from the purchasing behaviour of consumers who use the 22seven money management service bought by Old Mutual nearly a decade ago. Insights and reports from this data are produced on the combined and totally anonymised data of its users. When it announced this new unit a year ago, it had reached 400 000 users on the platform.
Simon Anderssen, head of 22seven Insights, says these on-demand delivery services accounted for more than 6% of all 22seven user-spending at South Africa’s major supermarkets (excluding Spar).
Between October and December, nearly one in five shoppers (19%) had used one of these apps at least once. Anderssen says a fifth of those (so about 4% of overall shoppers) had used them more than 10 times in that same quarter.
The median transaction value for an on-demand order across all services in Q4 was R484.
Here, Woolies Dash (as one would expect) leads with a median order value of R575 (Checkers Sixty60’s was R481, while PnP asap!’s was R438).
Checkers was not first to online grocery shopping. In fact, among the majors it was last.
Shoprite Group CEO Pieter Engelbrecht memorably calls this the group’s “last-mover advantage”.
No online shopping. No warehouse fulfilment centres. No complicated delivery system.
The service is premised on shifting that entire process (from receipt of order to delivery) to the
store itself.
Its 75% market share number is unsurprising, given just how rapidly Checkers has scaled the service. It launched modestly in November 2019 (four months before lockdown) and the timing, although not intentional, couldn’t have been better. During lockdown, it quadrupled the base of stores that offered the Sixty60 service in 12 weeks.
By early July, that number had
topped 233 stores; six months later, it was 266.
You get the picture.
It plans to have expanded the service to 80 more stores by the middle of this year, for a total of more than 300.
In March, the group revealed that a third of Sixty60 customers are new to Checkers. This is massive for this business and is likely the main reason it continues to take market share from rivals.
The problem faced by Pick n Pay is that the asap! brand for its app (the rebranded Bottles) is not all that memorable.
The R33 million it spent buying Bottles at least got it to a point where it was able to compete against Checkers.