Monday , May 17 2021

"The sum of both will be better than individuality"

I have months of insanity for Cornershop partners, and especially for its co-founder Juan Pablo Cuevas (JPC); and general manager of Walmart Chile, Horacio Barbeito (HB). In September, they formalized the acquisition of the most successful local company for the last time, bringing them "many hurdles". But both are happy and working hard to generate synergies that provide the full potential of what is called the business of the year.

What happened to companies after the announcement of the procurement?

-JC: We were not ready for the impact we had. What we observe most is the whole attention that has been set. We are invited to many places where we have not been invited before. And the truth is that the transaction still needs to be approved, so under practical conditions, a lot did not happen. We continue to work as we did and everything remains the same. We hope that it will soon be approved and we will see the first fruits of working together.

-HB: It's atypical of other acquisitions that not only did the company do in the past, but other types of companies. First we made a commercial agreement, we had the opportunity to get to know each other as companies. In Enade, Juan Pablo shared what he knows, cooperating and then give up this marriage and I think that in that sense he is very positive, because in our first investment in Chile, which is D & S, he gets and then starts works. In this case we met, and then we announced the announcement of the purchase. This second pledge to invest in Chile with greater certainty, knowing, starting to work, synergizes the truth that was very positive and complemented the value proposition. We quickly realized that in Cornershop we need our stores and the supply chain so that we can give it a final mile of excellence and we need Cornershop to complement our proposal in that service not only for sale, but also after sale. I think that there is super natural food and there is a commercial deal gave us the opportunity to get to know each other before you specify this. I think it is fundamental and will set a good foundation for how we will work in the future.

What happened in the publishing companies?

-CB: It was positive. Much helped us to get to know this. In fact, Juan Pablo, Óscar (Hjertonsson) and Daniel (Undurraga) were at our annual shareholder meeting last year, when we reviewed the commercial deal. Inside Walmart Cornershop is considered non-smokers, agile, good and that the sum of both will be better than individuality.

-JCK: For us, that was huge news. People inside were taken with a little surprise and would be honest with some fears, but over time they realized the huge possibility of continuing to do what we did independently and with full support from the world's largest companies. People are super motivated.

How do you see the effectiveness of e-commerce?

-HB: I believe that what is happening in some geographical areas is that our value proposition in the store, our lifting proposition and the value that Cornershop adds to that customer for home delivery in 90 minutes, coincides. When we see that ecosystem working, we realize that this is not a work of the future, it is a work of the present. We have such options for the client that today it is much stronger and more informed and has already accepted this way of buying in the present. So, what remains for the future is to continue to grow.

-JCC: I think there are certain things that the client always loved and always wanted, it's not like what is said elsewhere that the client has changed and now wants to take everything home. I believe that everyone has always wanted to bring some kind of product in some circumstances to their home, only now with technology and new developments can be made. I also think it is super certain that what will happen is that the consumer sends and what he prefers or chooses is what companies must do, they must adapt to what the consumer prefers.

-HB: There is another very important concept that has led to digital transformation, which is personalization. The retail business, 50 years ago, was a man who came to the inn, and one attended one by one. Self-esteem began to massage this relationship with customers and now we almost return to one-on-one. We will adjust the experience that has started to be massive. These client options that they buy as they like and even how Juan Pablo says sending him is something that leads to a disruption of retail business that I think is fantastic for the competition and for the client.

What synergies or work have you been able to do together?

-JCK: In the beginning, we tried to do something like that with everyone. We always require optimizations and efficiency to finally provide a better service. In particular, in the year and a half in which we work together with Leader, we are trying to move things forward, but it is also a premise – as we use the premise – that this does not stop customers, so we need to make enough improvements. So, we do things, as if we are trying to have an assortment more suited to the consumer habits of a customer in Corners, which is very important, because when people can buy from home or work or car, they no longer have time constraints that I had them at other times. This makes products to start buying at different times, then we need to agree on such things and how the premises function.

-HB: For example, when buyers enter the room and begin to "take" the products, we can real-time know what the pauses of the money we knew at the end of the day. It's real-time information, which makes us react faster, we have products faster in the sales room and we sell more, Kornershop sells more and the supplier of these products sells more. So I think there is a super fast synergy there.

But then, one of the biggest challenges in retailing are the peaks and valleys, as Juan Pablo said, in the morning, perhaps the store was quiet, where people mainly ordered things and now maybe 100 customers come in to place orders, then it's an intense schedule that in turn can take an intensity to the afternoon, in which it was very difficult to increase sales, because there was a peak too marked. So, I think that in the end this can lead to a change in the way we maximize the resources of our stores and inventory. I think there are good opportunities to continue to synergize.

Is there a store that has already changed its behavior?

-HB: Buenaventura is a good example, it's the main store where this emiacaliadadad lives. A shop that has a lot of physical traffic is the number one shop in the number of buyers in Cornerspace, it's the most sold in a pickup shop, and 30% of the sales are omnichannel. Those levels of penetration of online sales are levels of China. We say it's the most omni-channel store in Chile

Will it be repeated in more sales premises?

-BB: This allowed us to make more progress in this relationship we have with Cornershop. We believe that the future is not only in shops or just online. It is a customer who has different options for different purchasing missions.

-JC: There is a consensus in the world that stores will probably need to change slightly, to adapt to this new reality because they may not sell the same products, they deploy the same customers, but they will continue to exist, they will maybe a lot more than experience, to know new products. In the end, you have to prepare for different customers and for different uses.

Will there be synergy between and Cornershop?

-HB: For now the big synergy is omnichannel, being able to supplement the proposal of physical stores with a pickup service at home in less than 90 minutes. It's a great synergy. Once the operation is approved, the Juan Pablo team is very good at developing the technology and maybe we can explore things together, but for now there are many things at the level of premises in the way we take the products, perhaps try an area dedicated to Buyer the Cornership, where a large part of the products in the basket are already pre-arranged so that pickeo is faster and in the end, why not, it can improve the promise and drop from 90 minutes to 60, and later to 45, I do not know In Walmart China customer promise is for example Attack in 30 minutes. Obviously, it is a smaller assortment and the choice is made of shops called dark stores, closer to the neuralgia of cities. The model is different, they are ideas that can fly.

-JPC: The Cornershop mission is to deliver products from your favorite stores as quickly as possible and all that helps, we will try to do. The closure of any alternative would be foolish. And if one day we can cooperate, either with a Leader or with any other store we have on the market, we will continue to do so.

-HB: Our goal is to save our clients money so they can live better. And a few years ago, the customers incorporated the idea of ​​time, and then made savings for our customers so that they could live better, saving time, I believe that there is a mother of all synergies.

"More than thinking about new markets, we are thinking of consolidating the service"

How was the year for Cornershop?

-JCC: brief, very short. It was a huge year. The truth is that we are super young as a company, we have only three years and 4 months, then they are intensified every year. We grew up super fast and this year was the best year for everyone. We just started a new product for all small businesses so they can enter Conferhop and manage it independently. If you have a store or neighborhood store, you can enter the Cornershop store and put the name of your store, your logo, your address, to pick up your catalog and start selling. The idea is to reach all the small merchants who want to have a delivery service for an hour and a half or an hour in the places they are.

Did you leave?

-JPC: We are in white gear, we have 40 of these companies and we are selective, because we are trying everything to work well. The idea in the future is that stores can go on their own.

-HB: We are very excited and praise what they did, because it reflects a lot of what we do with SMEs. There are small and medium enterprises that can sell their products from Arica to Punta Arenas, thanks to the delivery in our distribution center, which is based on our infrastructure. We have small neighborhood businesses that have super good products and can reach the entire Santiago via Corners, which would otherwise not have arrived. They are examples that make the diet with our company really very positive. The more companies will set up on that market, the more the platform wins.

Do you see other markets?

-HB: It's clear that our decision with Cornershop was to consolidate into two very relevant markets that today are Chile and Mexico, where we see growth and the possibility is huge. We are very proud to invest in a company of Chilean entrepreneurs to use this type of platform in other markets. Once the transaction is approved there we will evaluate it well, but in the meantime, as Juan Pablo said, it's a short year, but obviously the growth is great.

-JC: After we left Cornershop, we thought the focus was very important. We started in Chile and Mexico and decided that we will work while in Mexico and Chile we hope to win and until we get a very, very good service. We still have a lot of exit there. More than thinking about emerging markets, for now we are considering consolidating the service, consolidating the product and doing it very well. We are super happy with what we have achieved, but we still do not have many things.

-BB: The day we signed the contract, we were in the same room, and the concerns of Chuck (nickname of Juan Pablo Cuevas) were that the repercussion of the news brought him many orders and could not fulfill his promise. This talks about the quality of the management and the founders of Cornership, but also about the focus of the service that is so marked, which is first service and then growth. I think it is very commendable, because they are achieved at this moment: excellent service, with very good growth rates.

How is the buyer of Cornershot?

-JCK: it's completely different. With all these technology platforms, super flexible work, you will eventually reach all kinds of people. On the one hand there are super young people who are students who use their weekend or the days when they do not have classes or graduates. On the other hand, there are all fathers and mothers who already have bigger children and already have more time, so they want to get back to work. The third group is already a group that looks at Cornershop or these platforms as a source of primary income or wants to complement it with their work. They are people who work full time or who have other work and supplement. There are also older adults.

-HB: A couple of elderly people came to deliver the order to my house. He told me that he was retired and that he was over 70 years old. She knew where the supermarkets were doing and helped her with difficult things. "We woke up several Luke, we do 4 or 5 hours a day and we have fun as crazy," he said. It is not a huge group, but in the end it can be a great opportunity for those who still feel the energy to work. Today it can be a small group, but with great potential for tomorrow.

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