- The Kontigo drugstore chain has been closing unprofitable stores for some time. Now the decision has been made to close down all 15 branches.
- The network's offer will only be available online. How do experts assess Eurocash's decision?
Kontigo only online? Eurocash must have arguments
The move of the Eurocash Group certainly cannot be treated as a summary of the Polish market, the beauty industry or the development of e-commerce. This is a conscious move by the company, which has been developing its sales channels both through the network of stationary stores and e-commerce for many recent years. Focusing only on e-commerce must have strong arguments in the form of the relationship between costs and revenues, as well as development potential. It can be assumed that the nature of the products sold also helped in making such a decision, the vast majority of which we do not have to try on or try before purchasing – says Damian Siusta, Business Development Manager at Postis in Poland.
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Dino with an e-shop. Expert analyzes
According to the expert, basing sales solely on e-commerce will certainly be a greater challenge for logistics. This means that this is an area that requires thorough analysis and possible optimization.
Eurocash is fighting for Kontigo's profitability
Paweł Peryga, Head of Technology at Unity Group, is convinced that Eurocash is moving the operations of the Kontigo drugstore to the Internet, because it sees a future for this brand in this channel.
– This is another move by the group towards increasing sales efficiency and getting closer to achieving the break-even point for this particular project, which has recently been generating losses. The lack of a physical retail point means no costs related to renting a premises, maintaining warehouses and serving customers on-site. But such a solution means not only lower costs, but also greater flexibility and meeting the needs of those customers for whom the most important factor when shopping is their convenience, and this is what they experience online – explains the expert.
According to Paweł Peryga, moving your business online allows you to benefit even more from the implementation of new technologies – in e-commerce you can use the automation of sales and customer service processes, as well as marketing activities, e.g. using AI.
– It is also an interesting opportunity to combine the Kontigo offer with other brands within the Eurocash Group and to launch cross-border sales. All this makes the Internet a place worth investing in for businesses that are focused on growth on the one hand and constantly looking for efficiency improvements on the other – sums up the representative of Unity Group.
