As customer behaviour shifts towards shopping for groceries online, incumbent retailers are trying to adapt their existing businesses to this fundamental change. We are solely focused on the online channel, and committed to providing the best customer shopping experience available, without the distraction of legacy bricks and mortar operations.
The ultimate mission for the retailer is to move a product from the supplier to a customer's home. However, traditional retail models have only delivered half of this mission, by moving the product only as far as the shop shelf and then conditioning the consumer to perform the other half of the retail mission in coming to the store and taking the product home. Notwithstanding this, grocery retail remains a relatively slim margin business today.
Our proposition is that in order to improve the shopping experience for customers we will perform the entire mission delivering the product from the supplier to the customers' homes. However, in order to do this in a sustainable and profitable way, a whole new approach needs to be adopted which removes cost from the traditional model.
We do this through the centralisation of our picking operations which aggregates activities to give each function scale, and through the use of automation and technology. We distribute orders directly from our picking facility and through a series of local spoke sites located around the country.
Our operating model removes many of the costs incurred in a traditional store-based model, such as redistribution costs of stock from a separate distribution centre, significantly reduced "put away" costs of stock into our pick aisles (the equivalent of a supermarket shelf), and the costs of a store network itself. As we grow and scale our operation further, we will gain the benefit of the operating leverage inherent in this business model.
Our model also gives natural benefits to the customer. Our food should be fresher as it takes less time to reach the shelves and spends less time on those shelves. We have higher predictability of stock available for fulfilment than a store. We are able to make new range extensions available to all of our customers very quickly from one central location. This enables us to add niche products to our range quickly and effectively without risk of stock obsolescence. The significant know-how we have developed has resulted in consistent industry leading service delivery metrics which underpin our customer service proposition.
We have developed this pioneering approach to grocery retail over several years using our own bespoke systems, know-how and software, making our operation very difficult to replicate.