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• Case | HBS Case Collection | October 2020

  Migros Turkey: Scaling Online Operations During Covid-19 (C)

  Toni Moreno and Gamze Yucaoglu

  The case opens in August 2020 as Ozgur Tort and Mustafa Bartin, CEO and chief large-format and online retail officer of Migros Ticaret A.S. (Migros), Turkey’s oldest and one of its largest supermarket chains, are navigating Migros through Covid-19 and the unprecedented surge in demand in online groceries. Between the first official case in Turkey in March and August, customers have flocked to online shopping and Migros’ teams have been busy trying to solve the picking, fulfillment, and logistics bottlenecks. In the six months, the company recruited and trained new pickers, expanded its delivery fleet, and converted less busy stores into dark stores. Quick to react, Migros was able to add new customers to its base and was proud of its accomplishments. Now, unable to forecast how much of the surge in demand for online was here to stay, how should Migros plan for the future of Sanal Market and Hemen? Was there anything the company could do to sustain the number of hybrid shoppers it acquired during the past few months?

  Keywords: Business Model; Strategy; Technology Platform; Information Technology; Technology Adoption; Value Creation; Globalization; Competition; Expansion; Logistics; Profit; Resource Allocation; Diversification; Corporate Strategy; Crisis Management; Food and Beverage Industry; Turkey;

  Citation:

  Moreno, Toni, and Gamze Yucaoglu. "Migros Turkey: Scaling Online Operations During Covid-19 (C)." Harvard Business School Case 621-062, October 2020.  View Details

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• Case | HBS Case Collection | August 2020 (Revised September 2020)

  Migros Turkey: Scaling Online Operations (A)

  Antonio Moreno and Gamze Yucaoglu

  The case opens in November 2019 as Ozgur Tort and Mustafa Bartin, CEO and chief large-format and online retail officer of Migros Ticaret A.S. (Migros), Turkey’s oldest and one of its largest supermarket chains, are contemplating what the best fulfillment format and delivery model for the company’s growing online arm, Sanal Market, and its under-30-minutes grocery service arm, Hemen, are. Migros’s online operations had grown over 50% year-on-year in the previous three years, and the target for 2020 was to grow 100%. With all of these considerations in mind, Bartin and Tort needed to decide which levers to pull for the last mile and fulfillment to best serve the future of Migros.
  
  The case chronicles the founding and growth of Migros as well as Sanal Market and lays the ground for food and grocery retail in Turkey complete with the competitive outlook. The case then provides a detailed overview of how Migros built online channels, Sanal Market and its recently introduced Hemen, and how Tort and Bartin have thought about fulfillment and delivery as well as omnichannel mentality. The case goes into detail about the three different fulfillment models, store pick micro-fulfillment center, and dark store, that Migros is piloting in 2019 as well as providing an understanding of what the company is thinking about logistics and last mile delivery as its online sales grow.
  
  While globally, online shopping and consumer preferences were changing fast, particularly in terms of how and with what frequency customers shopped online and how fast they wanted their groceries delivered, Migros was trying to find the optimum model for fulfillment and last mile delivery. What was the best way to optimize last mile with regards to pooling store catchment areas and pooling stores, and which of the fulfillment models would yield the best results in terms of picking speed and accuracy and customer expectations? Additionally, the company needed to figure out how to position Hemen; facing fierce competition from fast-delivery grocery startups, for whom burning cash to achieve growth was not a concern, should Hemen remain as a stand-alone offering or should it be integrated within the Sanal Market app?

  Keywords: retail; grocery; Business Model; Emerging Markets; For-Profit Firms; Strategy; Technology Platform; Information Technology; Technology Adoption; Value Creation; Globalization; Competition; Expansion; Logistics; Profit; Resource Allocation; Corporate Strategy; Turkey;

  Citation:

  Moreno, Antonio, and Gamze Yucaoglu. "Migros Turkey: Scaling Online Operations (A)." Harvard Business School Case 621-026, August 2020. (Revised September 2020.)  View Details

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• Article | Management Science | September 2020

  Customer Supercharging in Experience-Centric Channels

  David R. Bell, Santiago Gallino and Antonio Moreno

  We conjecture that for online retailers, experience-centric offline store formats do not simply expand market coverage, but rather, serve to significantly amplify future positive customer behaviors, both online and offline. We term this phenomenon “supercharging” and test our thesis using data from a digital-first men’s apparel retailer and a pioneer of the so-called zero inventory store (ZIS) format—a small-footprint, experience-centric retail location that carries no inventory for immediate fulfillment, but fulfils orders via e-commerce. Using a risk-set matching approach, we calibrate our estimates on customers who are “treated,” that is, have a ZIS experience, and matched with identical customers who shop online only. We find that after the ZIS experience, customers spend more, shop at a higher velocity, and are less likely to return items. The positive impact on returns is doubly virtuous as it is more pronounced for more tactile, higher-priced items, thus mitigating a key pain point of online retail. Furthermore, the ZIS shopping experience aids product discovery and brand attachment, causing sales to become more diffuse over a larger number of categories. Finally, we demonstrate that our results are robust to self-selection and potentially confounding effects of unobservable factors on the matched pairs of customers. Implications for retailing practice, including for legacy, offline-first retailers, are discussed.

  Keywords: Retail operations; marketing-operations interface; omnichannel retailing; experience attributes; quasi-experimental methods; Operations; Online Technology; Marketing Channels; Consumer Behavior; Retail Industry;

  Citation:

  Bell, David R., Santiago Gallino, and Antonio Moreno. "Customer Supercharging in Experience-Centric Channels." Management Science 66, no. 9 (September 2020).  View Details

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