Makro

COMPANY PROFILE

2013

Makro

Entering the digital age

CompANY PROFILE

Entering the digital age Editorial: Lauren Grey Production: Chris Bolderstone

Cash and carry retailer, Makro has been servicing the South African market for over 40 years with the wholesale and retail supply of food, general merchandise and liquor from its 19 warehouse stores across the country.

However, in order to extend its services and meet changing consumer demand, Makro is preparing to launch its enhanced online shopping site.

Originally a Dutch warehouse chain, Makro first opened in Amsterdam in 1968 and in the years that followed expanded into the Netherlands, several countries in Europe and South Africa, where it was the first cash and carry operation to open in the country.

The company was also the first to make use of sophisticated computerised inventory control in the country; keeping track of sales, purchases and stock with then state-of-the-art IBM technology.

MakroSA stores are located in all major metropolitan areas in the country and operate under a high volume/ low cost/low margin trading philosophy, as Marketing Director, Dr Melanie Louw explains, “Traditionally, stores have been located in the major metropolitan markets, but since 2011 stores were opened in so called ‘secondary cities’ such as Nelspruit, Polokwane , Port

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Elizabeth and Bloemfontein.

“The stores service predominantly higher LSM retail and commercially affiliated customers although there is a significant indirect offering to lower LSM customers via food and liquor resellers. The general merchandise offering is weighted to retail customers, whilst food and liquor have a predominantly commercial customer base.”

Makro’s defining feature is its ability to act as a onestop-shop with everything available under one roof, and its low cost trading ethos enables high volume distribution of merchandise at competitive prices.

“Makro has at its core a wholesale supply chain model that allows for a very high proportion of direct to store deliveries. The large format stores create this wholesale route to market and the volumes that are sold through those stores allow wholesale cost structures to be applied in support of both retail and wholesale trade.”

MAKRO

COMPETITION After its establishment in the country, the company’s structure and business model was soon replicated across South Africa, with a variety of new organisations targeting its customer base with similar products and services, however, Makro’s established brand and commitment to customers enabled it to maintain its leading position, as Louw explains.

“Our goal is to ensure superior and sustainable financial performance to our stakeholders whilst delivering superior product and offerings to our customer base.

“We are also very aware of the fact that the availability of competitor pricing in the market means that we have to use our superior customer level data and analytics to ensure that we can address the needs of our customers at the reseller, commercial and retail level.”

One way in which Makro ensures that it satisfies the needs of its customers is by storing data and keeping track of their past purchases, this allows the company to communicate with its customers through promotional activity that is driven by the customers’ needs and preferences and allows them value-added services such as storing invoices for personal and VAT purposes etc.

“Makro is supported by a unique cash customer data-base, which originates from the Makro card, Makro serves a variety of customer types through its deep understanding of their different needs and communicates regularly with them through unique targeted promotional activity.”

MAKRO.CO.ZA With 19 stores throughout South Africa, and over 8000 full-time employees, Makro services a substantial chunk

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CompANY PROFILE of the market, but the company has active plans to expand its footprint even further throughout the country via its online presence.

The company’s already established website, www. makro.co.za is primarily used by customers for researching stock and price, rather than for making purchases online. However, plans to launch an enhanced shopping experience will see a major portion of Makro’s range of products available for purchase online.

“We are extremely excited about the launch of our online shopping offering, www.makro.co.za is currently the most visited website of a bricks and mortar retailer in South Africa with more than 2.6 million unique visitors during the first six months of 2013,” says Louw.

“Our current online shopping offering is hosted through a third party and offers a limited range of general merchandise products and fulfilment out of only one store.”

Makro’s new online offering is set to launch in the first half of 2014 as part of the company’s omni-channel strategy. Although the website will list most products

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available in store, initially food products will be available for research only with GM and Liquor being available for online purchases in a phased launch approach. Eventually customers will be able to choose from almost all of its 55,000 products online.

“The offering will be national and assist us in achieving a much wider footprint with a delivery model servicing customers even in the most outlying parts of the country.”

GOING GREEN Not only is Makro making use of digital expansion opportunities, but the company has also expanded its store footprint by implementing new stores across the country and redeveloping existing stores.

“Albeit that we will still be expanding our store footprint, the aim for the next five years is to establish ourselves in the areas that we are in through price leadership and service innovation.

“Of course we are not entirely finished with the expansion of our store footprint and there are still some areas where we think there might be expansion

Letshego

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CompANY PROFILE

possibilities, without necessarily cannibalizing volume from existing stores.”

When implementing a new store, or re-developing an existing one, Makro places huge emphasis on the buildings’ environmental impact and sustainability, as the company believes this enhances the shopping experience.

Louw explains how the company’s newest store in Amanzimtoti, Durban –re-located from Rossburgh- was designed with green technologies in mind, “each Makro store is more advanced than the last, and as we get better at responding to our customers’ needs we incorporate the latest design and product offerings.

“The Amanzimtoti store incorporates the latest in butchery design, for example, presenting a best-in-class fresh produce range and also includes a baked goods offering. We have always been aware of our impact on the environment and have used our unique and privileged position to try, test and use new green technologies.

“This particular store has been built using greenbuilding concepts, local labour and locally-sourced

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construction materials.”

Other technologies used by Makro in the development of its stores include energy efficient lighting, water harvesting and utilising recycled packaging, for example new Makro stores use LED bulbs in its stores, which draw less current than traditional bulbs. This helps to significantly reduce the stores total electricity consumption.

The fact that Makro has standalone stores makes it easier for the company to implement innovative technologies such as daylight harvesting.

This advantage has seen the typical Makro store evolve and change its look and feel over the years.

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“Our goal is to ensure superior and sustainable financial performance to our stakeholders whilst delivering superior product and offerings to our customer base.”

MAKRO SA

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+27 11 797 0000 www.makro.co.za

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