A customer-oriented approach, where products and services are built with the customer and their needs in mind;
A fast and reliable delivery that doesn’t require you to book a slot and build your life around that delivery time;
Competitive prices — not overcharging customers for the convenience of getting their groceries or products delivered;
A great product range that is designed to cover most of the shopping scenarios customers might have, including their most urgent needs, their everday necessities and their impulsive indulgences; and
Outstanding customer support.
As part of our series about the future of retail, I had the pleasure of interviewing Vladimir Kholyaznikov.
Founding member of Jiffy, a London-based online supermarket that delivers groceries in minutes. Vladimir is also the foodtech director of X5 Retail Group that recently appeared on the list of the world’s 50 top retailers. There, he leads the on-demand grocery delivery services. X5 apps deliver groceries and household iteams from 1,000 offline supermarkets and dark stores in minutes, fulfilling over 60,000 orders per day across 20 cities. Just a year after its launch, X5 on-demand grocery delivery service is already among the leading e-commerce companies in the CEE region, with the FoodTech team now close to 5,000 employees, and monthly revenues in excess of 25M dollars.
Vladimir Kholyaznikov is a serial entrepreneur. He was the CEO & Co-founder of Kupivip, an international e-commerce company, and a founder of foodtech startup Foodza. He’s also a member of Advisory boards at the Home Credit Bank and CarPrice, an online service for used car auctions.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
Thanks. Actually, I was raised in a family of local entrepreneurs. My parents had a small retail company that imported goods from Germany and Poland, which were initially sold in our small stores. This later evolved into a distribution business when my parents realized their expertise on the sourcing side would be competitive, and they decided to become a supplier for other similar small businesses. From a young age, I enjoyed helping my family with the business, I guess because it made me feel older — so this love of business has been with me throughout my life.
By the age of 16, I had taken over one category in the wholesale business, and I managed the distribution and sale side. Later, when I was in university, my friends and I continued to run import businesses. We created a company that imported everything from consumer electronics to food and cosmetics.
During my university years, when I lived in the US, I realized the evolving trend of e-commerce was basically the new generation of trade and retail. I then decided to pursue this in my country, where the internet industry of the early 2000s was still significantly underdeveloped.
Can you share the most interesting story that happened to you since you started your career?
To be honest, nothing springs to mind.
Are you working on any new exciting projects now? How do you think that might help people?
Yes, I am now working in the quick-commerce space, which we believe is the next generation — level 3.0 — for e-commerce. This is the mobile commerce segment where you are able to get products literally in minutes, so basically an on-demand service. I am currently a partner in Jiffy Grocery, a London-based online supermarket providing instant delivery of 15 minutes or less based on our own chain of mini-fulfillment centers across London.
Throughout my career, I’ve seen how e-commerce evolved from a catalog business. In catalog (mail order) it sometimes took weeks and sometimes more than a month to receive a product after a mail order company processed your order. Then came the internet, and e-commerce eliminated the need to place an order over a sheet of paper and send it from a post office, replacing it with an instant checkout online while everything else remained the same. This led to a significant boost in delivery speeds, reducing these from weeks to days. But now, 20 years later, every single mail order company has either become bankrupt or has had to transform significantly to match the new reality.
Over the years, the e-commerce market has seen a dramatic increase in delivery speeds, so today you are able to receive goods the next day or even in the same day in most of the markets across the world. And today, particularly with the involvement of mobile commerce, we are now seeing how those days and hours are being squeezed into minutes. We are fairly certain this will be one of the most significant transformations for retail in the next decade. It will literally change the way people shop for the majority of their products and services. And we are on a mission to speed this transformation!
Which tips would you recommend to your colleagues in your industry to help them to thrive and not “burn out”?
I think this is an important — and, in many cases, vital — question for entrepreneurs and managers who have dedicated their lives to working. A major commitment for me in my lifetime is to enjoy the luxury provided by our developed economy. Today, we can do what we love. We no longer have to do the things our grandmothers had to do — all those things you hate doing — just to survive. I think today every single specialist has an opportunity to enjoy working by finding their right place in life — whether that’s being a piano player, a semi-professional sportsman, a businessman or a teacher. Together, the internet and a developed economy can give you an opportunity to do what you love. So I suggest finding those things in your life that you enjoy and engaging with them.
None of us is able to achieve success without some help along the way. Is there a particular person to whom you are grateful, who helped get you to where you are? Can you share a story?
Sure — that’s definitely my parents, and my wife, who is always supportive of all the crazy ideas and dreams I try to make into a reality. Because when you are growing a startup, you have to engage other people in believing in something that doesn’t exist, except as an idea or dream. You have to sell those nonexistent things to other people… and your family is usually the first people that need to be OK with that.
But beyond that, there were two people who had a particular impact on my life: my partner, Oskar Hartmann, and Rolf Shaefer, my colleague and the chairman of our company.
How have you used your success to bring goodness to the world?
I mentor and inspire other young entrepreneurs. I believe capitalism is the major driver behind the developments in social life, charity and economic development. So for me, there is simply no better way to give back than by creating new companies, projects and teams that will help build the spinning wheels of development.
OK, super. Now let’s jump to the main questions of our interview. The pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that large retail outlets are implementing to adapt to the new realities created by the pandemic?
As a result of the pandemic, large retail outlets have adapted through erasing the borders between online and offline retail, with more and more switching to using online as the primary source of communication. In some cases, retail outlets have begun utilizing their existing capacities for online commerce (for example, using ship-to-store models). The result is that online to offline effects have become huge across industries — for example, some fashion retailers across the globe ended last year with a 50%+ online share in sales. So what are they now? Online or offline retailers? I guess they will need to choose which one they want to be.
We have also seen some global retailers claiming they now see themselves as online-first businesses, and their offline capacities are in a process of transitioning to become primarily focused on online infrastructure.
In your opinion, will retail stores or malls continue to exist? How would you articulate the role of physical retail spaces at a time when online commerce platforms like Amazon Prime or Instacart can deliver the same day or the next day?
I am a firm believer that all physical formats will continue to exist, although they will likely transform. It’s like the the print book market — yes, the print book market has been affected by the emergence of digital books, however the print book market is not dead, it is simply evolving. The same is true for the vinyl record market, as an example.
On another point, people love to get together in person — it’s a form of entertainment. My belief is that the majority of large-format retail properties will transform over time to provide spaces with a greater share of entertainment offerings as opposed to commercial offerings — for example, cinemas, children’s playgrounds, video gaming and other formats — that will evolve over time. We have already seen malls around the world with a share of entertainment and food spaces up to 30%–35% of the total space. I think this trend will continue.
In the traditional grocery store space, local stores will continue to provide a community hub. There are tons of times when you just want to stop by and grab something quickly. However, I believe the use of e-commerce in food retailing will reach between 30%–50% penetration, as it is just much more convenient for most people to buy groceries online. The major thing is that it’s a “cheap kilo,” as I call it — low item prices with high volume and weight, and super-high consumption frequency. But it’s a routine exercise to get groceries, and this will all likely shift online.
The so-called “Retail Apocalypse” has been going on for about a decade. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco, are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?
I think it’s really about the innovation and vision of the future. In the future, companies will make bets and allocate their capital accordingly.Some companies in the retail market simply want to preserve what they have, even when it has become clear that times have changed and consumer habits are evolving. Others are building a discipline of constant innovation and are deploying capital on a regular basis to enhance customers’ experience with new products and services. The main lesson is not to let the legacy of your business bury you under the ground. We’ve seen this happening over and over again.
From our perspective as a venture industry, we have learned that the past does not equal the future. And the hardest thing for a large organization is to make sure you understand that psychologically. Think about it: if you are doing things the same way for 20–30 years, doesn’t there come a point when this approach is no longer working? When this happens, what do most companies do? They push harder using the same approach — they change the management and change the promo, but these are really all same things. My best advice for them is to realize that sometimes it’s important to turn things upside-down.
Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise to retail companies and e-commerce companies, for them to be successful in the face of such strong competition?
I don’t see too much of a threat coming from Amazon as a marketplace. In fact, I see the opposite example, where brands are evolving on Amazon. There are presently companies making billions of dollars of revenue on Amazon alone. While retailers are discussing whether Amazon is a threat, some entrepreneurs are taking the advantage during this time to build huge businesses there.
I think every retailer needs to develop its own clear multi-channel strategy: where do they want to be present with their storefronts, and why? If Amazon or Alibaba has become the virtual mall of today, I believe for most retailers it’s worth considering having a store there, and making sure there is a structured assortment and price strategy behind this new channel that can support the growth of the core business and customer acquisition, and that drives traffic and profit.This requiresretailers to have the discipline to invest in innovation.
Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.
The online grocery shopping experience is frustrating for most UK customers, as slots are often unavailable for days and weeks in advance, and some stores charge a premium fee for a “rapid” delivery that still takes up to two hours. We believe it shouldn’t be this way, and that getting your groceries should be as accessible and affordable as shopping at an offline grocery store, but with the convenience of an ultrafast delivery service. In a nutshell, it’s a combination of:
- A customer-oriented approach, where products and services are built with the customer and their needs in mind;
- A fast and reliable delivery that doesn’t require you to book a slot and build your life around that delivery time;
- Competitive prices — not overcharging customers for the convenience of getting their groceries or products delivered;
- A great product range that is designed to cover most of the shopping scenarios customers might have, including their most urgent needs, their everday necessities and their impulsive indulgences; and
- Outstanding customer support.
Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. 🙂
I would make studying the basics of entrepreneurship a key part of the curriculum for all schools and universities. In reality, the fundamentals of entrepreneurship cross our lives in everything we do. So why don’t we study that? Just like learning sports or being introduced to culture, kids need to learn what it’s like to find out about the great ideas creating massive value, and then share these with the world and build new things for others.
Again, I am a firm believer in the tenets of capitalism and private ownership, so I think everything created for society has to be managed by the owners of those creations. That’s the only way to keep things in order.
How can our readers further follow your work?
They can follow me and read updates on my Linkedin profile.
This was very inspiring. Thank you so much for joining us!