Migros opens pick-up stations to competitor

Migors Stock photo.
By Reidar Molthe

29 September 2017 06:41

Migros opens pick-up stations to competitor

Swiss retailer Migros has started to offer customers of www.brack.ch the opportunity to get their orders delivered to Migros’ PickMup locations.

The electronics specialist, www.brack.ch, operates as a direct competitor of Migros’ banner Digitec Galaxus.

Beat Zahn, Migros’ Head of Retail Department, stated that this will be a win-win-situation for both of them, Migros and brack.ch. The latter will have access to a wide pick-up network and Migros can increase the customer frequency at its click & collect locations, writes Lebensmittel Zeitung.

As of today, Migros operates about 350 PickMup click & collect locations across Switzerland.

Leveraging one another’s resources for online is becoming increasingly common, with retailers combining forces in different ways via supply agreements, logistics, marketplaces or lockers. In the UK, Morrisons has recently become a master of this – on the one hand collaborating to use Ocado's IT and logistics services for its online home delivery service, at the same time as supplying Amazon with private label grocery lines and installing its lockers instore.

Most agreements between retailers are set up to drive growth for both parties, although mainly between non-competing retailers and without cannibalizing revenues for either of them.

The agreement between Migros and brack.ch strikes us as odd, allowing a direct competitor to benefit from the retailer's network. What could be the benefit for Migros, asks retail analyst Frauke Vor dem Berge?

It could help Migros to generate additional revenue as it is likely the case that the companies using the lockers are paying Migros a service revenue for this.

Additionally, Migros’ PickMup stations are located at its grocery stores, which is likely to increase footfall to the stores and generate impulse opportunities from shoppers coming in to collect a parcel. The benefit for smaller companies, which collaborate with Migros, is certainly gaining access to a wider distribution network.

Leveraging shared resources in this way makes sense and we expect to see more of these types of collaborations in future across the online channel. However, for the most part we can expect retailers to join forces with non-competing partners.

As Migros’ biggest competitor in Switzerland, Coop (CH), also has a huge network of click collect locations, Migros perhaps felt compelled to link up with third parties on click & collect to beat its rival to this opportunity, writes Frauke Vor dem Berge.