This post is co-written by Dhruv Sikri and Irene Gil López, product managers at Mercadona Tech.
With 1,626 physical stores in Spain, 99,000 employees, and €31,041 million annual revenue, Mercadona is one of the leading supermarket and online shopping companies in Spain.
Given the sheer scale of the business, the team at Mercadona Tech—dedicated to developing products that help customers shop for their groceries online and the logistics that fulfill their orders—is often faced with the difficult task of aligning objectives with the unpredictable world of consumer behavior. Product managers Irene Gil López and Dhruv Sikri describe how they use Amplitude’s insights to continuously optimize Mercadona’s website and app, and bring clarity to their day-to-day tasks.
A data-driven approach to forecasting deliveries
Dhruv Sikri, product manager for the department “Oferta” at Mercadona Tech, faces a unique set of challenges when it comes to providing optimal delivery services for Mercadona customers:
- Variable demand: Customer demand for groceries varies greatly from day to day and week to week. Predicting how many orders customers will place and when they will want them delivered is crucial to success.
- Resource management: Mercadona manages delivery drivers and preparation staff. Over-allocating or under-allocating resources would lead to increased costs.
- Customer expectations: In the era of ecommerce, customers expect the convenience of choosing delivery slots that suit their schedules.
Mercadona’s delivery slots on their application
“We want to make sure that our customers—which we call our “Jefes”—can pick from a range of delivery slots that best fit their needs,” says Dhruv. “At the same time, we need to make sure that we have allocated the right resources for preparation and delivery even before our customers pick their slots. The goal is to forecast demand accurately, matching available resources with customers’ preferences for delivery slots.”
Dhruv’s starting point was to use historical data to predict future demand, but he quickly ran into unseen demand: “This is a well-known problem in the operations world,” explains Dhruv. “Unseen demand occurs when potential customers do not place an order due to the lack of desired delivery slots. Essentially, the demand goes unfulfilled because our customers cannot find or secure the delivery slot they prefer. In the long run, this can have a huge impact on our revenue.”
Mercadona Tech tackled this major challenge by leveraging the rich digital insights found through Amplitude Analytics. They analyzed conversion rates, comparing actual demand to an ideal scenario with optimal delivery slot availability. They also estimated potential revenue gain if more delivery slots are provided during checkout.
Checkout conversion rates
The insights provided by Amplitude enable Mercadona to make impactful business decisions that boost its revenue and improve its online grocery delivery services for customers.
Helping customers find the products they need
Before customers get to choose their delivery slots, they first need to fill their baskets online. Irene Gil López, product manager for the department “Shop,” is dedicated to simplifying online shopping for Mercadona customers. The goal is to make shopping online easy, reliable, and convenient while also growing revenue.
“One of our most used app features is the Already Purchased tab,” describes Irene. “Here, customers can find products they have purchased in the past and are likely to purchase in their next order. We recommend 140 products to the customer, but we split these recommendations across two tabs: the first 40 available products are on the first tab, and the following 100 available products are on the second tab.”
Though this feature is popular, many customers complained that they couldn’t find their previously ordered products in the list. Irene decided to use Amplitude to help shed some light on the problem. With Amplitude, the team created cohorts of users that interacted with the different product recommendations. Through a funnel analysis of the cohorts, they discovered a significant difference in conversion rates between the two product recommendations tabs.
Conversion rate of users that shop products using both tabs vs. only the first tab
With these insights, the team decided to combine both of these tabs into a single area for product recommendations based on previous purchases. The impact was notable: Customers increased the number of products added to their carts.
Mercadona’s new UI for product recommendations
Mercadona's journey shows the power of data-driven decision-making. With Amplitude’s insights, the team has successfully addressed the challenges of unseen demand and improved their customers' online shopping experiences, setting a new standard in the grocery retail industry. As they continue to leverage data and insights, Mercadona stands poised to maintain its position as a leader in the Spanish grocery market, delivering customer satisfaction with every order.