- The Kontigo drugstore chain has been closing unprofitable stores for some time now. Now, the decision has been made to liquidate all 15 locations.
- The chain's offer will be available exclusively online. How do experts assess Eurocash's decision?
Kontigo only online? Eurocash must have arguments
The move by the Eurocash Group certainly cannot be treated as a summary of the Polish market, the beauty industry or the development of e-commerce. It is a conscious move by a company that has been developing its sales channels through both a network of brick-and-mortar stores and e-commerce for many years. Focusing solely on e-commerce must have strong arguments in the form of the cost-revenue ratio and 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 test before buying – 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 fights for Kontigo's profitability
Paweł Peryga, Head of Technology at Unity Group, is convinced that Eurocash is moving the Kontigo drugstore business to the Internet because he sees the future for the brand in this channel.
– This is another move by the group towards increasing sales efficiency and approaching the break-even point for this particular project, which has recently been generating losses. The lack of a physical point of sale means no costs related to renting premises, maintaining warehouses and serving customers on site. However, 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 in shopping is their convenience, and they experience this online – explains the expert.
According to Paweł Peryga, transferring business to the network allows for even greater benefits 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 Kontigo's offer with other brands within the Eurocash Group and to enter cross-border sales. All this means that for a business focused on growth on the one hand, and constantly looking for improved efficiency on the other, the Internet is now a place worth investing in – sums up the Unity Group representative.