Innovative Retailer: Lifvs
The Name: Lifvs
The Place: All over rural Sweden
The Story: This is a bit niche I can hear you thinking. Innovation in rural Sweden – what’s that go to do with us here in Blighty?
I’ll do the questions, thank you: OK.
What’s that got to do with us here in Blighty? Well, there are lots of trials of unmanned stores around the world. Dotted here and there.
Heck, we even have our own now with Amazon opening three so far in London: Indeed, but they are mostly located in city centres. Sweden is a step ahead on the whole idea of this not just being the preserve of city slickers – who after all already have a plethora of late night opening and cashless ways to pay. Lifvs focuses on solving a problem of shopping in the backwaters – uniquely.
So it’s the country bumpkins’ time to shine: Yes. And this is where rural Sweden is an ideal test bed. Lots of cut-off or remote communities who are nonetheless very tech savvy – 45% of Sweden’s population do not live in an urban setting. These places have often lost their village shop just as many British villages have and that, my friend, is why it could be of import to us here.
And it goes without saying also that unmanned stores where you can shop on your own… would be useful in a global pandemic. Yes, I’m sure this is not lost on people either.
Right. And whose brainchild is this exactly? One Daniel Lundh esquire, who is co-founder and COO. He watched as food deserts became a thing in Sweden (and 98% of its food deserts are rural) while a quarter of local small shops have gone to the wall as travelling to buy your food becomes the norm for most Swedes.
And he thought – not on my watch! Pretty much. In 2018 as a way to reverse this damaging trend of food miles and store closures he opened the first of what is now a chain of 27 stores across the country with plenty more planned for this year virtually on a monthly basis, according to Lundh. So in a nutshell this is an unmanned, smart, mobile grocery shop.
So go through the operational basics for me…costs are kept low because staff are at a minimum and the usual big bricks & mortar overheads like rent are much reduced in this model. It gives the ultimate flexibility for morning larks and night owls. Lundh always wanted to use technology to build an analogue service, which is exactly what he has done. His app works in conjunction with the Swedish banking identification scheme BankID.
Hurrah. And if I happened to stroll into one of these shops – what would I find? Dry and fresh produce. There are around 500 lines in each shop but Lifvs works hard to understand the customer base before it opens so that hopefully the kind of goods that people want are stocked rather than what a central buying operation might want to buy. Obviously this approach seeks to minimise waste as well. The company knows exactly who is in the stores at any one time because of the app and there is also a surveillance camera onsite so thieves will be quickly noticed and identified.
And it’s still one size fits all: Actually they now have a second model which includes a click and collect possibility for added convenience and also increased protection in Covid times. Customers make an order within the app and it appears magically in one of the storage boxes.
But surely that requires people? Ah yes. Staff. This is not quite an unmanned operation you know. Because if you think about it someone needs to replenish the shelves and clean and sort out any issues around shoplifting and so on so the whole unmanned thing is a slight misnomer. However, most customers will let themselves into the shop via the app and potentially never see anyone. A manager will look after a small cluster of local shops and sort out the grocery click and collect too.
What do they look like? Like kit shops really. They are delivered in a container and sort of dropped into place. And villages in Sweden were queuing up to be the recipients of the next one even before Covid made them hanker after self-service, click and collect and kerbside pick-up.
Not quite the same as having a chat with the local shop owner though is it? No, but Lundh has opinions on how bricks and mortar shops have dealt with customers in recent years and it’s not pretty. “In the past they talked about the weather, how you were, the goods you are buying. Today they only ask if you are a member of their loyalty scheme,” he says.
Have to say there is an element of truth in there: He freely admits his own operation is all about data but maintains it is wisely used and collected. From the beginning he wanted a unified commerce platform with all data in one place, which Lifvs uses to ensure the offer to customers stays relevant.
So Lifvs talks to its customers just not in the usual way: Exactly. As soon as a consumer opens up the app their whole payment history can be used to give them marketing offers or remember what they bought last time. Lundh would very much argue he is communicating and all the data collected “feeds the system under the hood” from changing prices, to which items to stock, to who bought what, to what marketing offers people reacted to.
If you shop here you have no choice but to hand over the data. So I don’t need to ask if they know who their customer is. Of course they do! I can tell you that: the average age is 43, 81% of users allow push notifications through the app and the retention rate is very high at 83%. But if less people use the shop than Lifvs thought then they can just pick the unit up and take it away again with no long term lease implications at all.
Genius: But really the weirdest thing is how extensively an isolated shop, which never has a queue in it, can nonetheless become part of the community. As Lundh says: “Customers can tell us what they would like us to stock and we always add local suppliers.”
I don’t need to wonder if the future is bright: No, it’s looking good on expansion on all fronts. There is no need to stick to food either. According to Lundh “as long as the product has a barcode then any category is possible”. And Lifvs receives requests from so many different countries that it’s only a matter of time before it spreads beyond Sweden.
Wait until it gets on to selling the proprietary software for the unmanned platform: Oh don’t worry – the company is all over that already. In the end it might come down to whether Lifvs itself expands globally or whether it does sell that roll-out model to other supermarket chains around the world.
Actually I’m mainly interested in whether they do offers on Swedish meatballs. Got any data on that? No.
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