Connecting directly with shoppers

09 November, 2017 by
FMCG Business

Some of the biggest food and household goods brands in the UK have signed up to a new shopping service that claims it can slash grocery bills by 30% – by cutting out supermarkets.

Unilever, Mars, and Reckitt Benckiser, have all signed agreements to say they intend to start selling items directly to consumers through a high-tech digital platform, which is launching in the UK next year. This means hundreds of household favourites including Weetabix, Dettol products and Dolmio sauces could soon be available at much lower prices.

Advertisement

The grocery service is designed by tech company INS and set to pilot in 2018. It is expected to be part of a new wave of shopping firms offering a radically different way for consumers to shop.

Unlike supermarkets, which negotiate prices of goods with manufacturers, the website will let brands decide their own prices. It will use so-called “blockchain technology” to connect shoppers directly with products, removing the need for supermarkets in the shopping process. The service will consist of an online shopping portal through which consumers can find and buy products directly from manufacturers, and an outsourced network of warehouses and delivery drivers.

Consumers will be charged for the wholesale cost of items, plus a separate “logistics” fee to cover storage and transportation. This is expected to be anywhere between 10 and 15% of the value of an average weekly shopping basket. Shelf prices paid by supermarket customers consist of the wholesale price, plus a range of extra costs, which can raise total costs by up to an extra 50%.

Brands will also be able to gather data on consumers who buy their products and use it to offer loyalty schemes to individual customers depending on their buying patterns.

INS was founded by the makers of Instamart in Russia.