We invite you to watch Kross.cl’s Business Case Capsule that took place during the Ecommerce Day in Chile with an analytical and precise look, with real figures, concrete strategies and specific results. At the end you will be able to access the complete video.
Business Case Capsules at Ecommerce Day in Chile: The case of Kross.cl
Why is the Kross case a landmark case?
The Kross case is an emblematic case and was part of the Business Case Capsules at Ecommerce Day in Chile for the following reasons:
- It represents a success story of a Chilean SME in the e-commerce arena. Instead of being a large corporation, Kross is a smaller company, which makes it an inspiring example for other SMEs looking to enter the world of e-commerce.
- Kross stands out for having a horizontal working approach in its team. This means that both the management, the operations team and the e-commerce manager have knowledge and experience in the field of e-commerce. In addition, the owners themselves are involved in the detailed monitoring of what happens in the online channel.
- The omnichannel business at an administrative and financial level. Everything that happens in eCommerce is with the consent of B2N and with the consent of the different commercial channels that the company has, such as, for example, everything related to mass consumption and supermarkets.
This is what Kross looked like in 2019 before the pandemic.
- 4 branches (today they have 6).
- 87 workers (today there are more than 150 workers).
- 62 Net Promoter Score (and growing).
- 2018: start of online sales.
- 25 SKUs in the offline catalog (now 35 SKUs in the digital catalog).
- 2% of participation in digital channels (it now represents more than 30% of sales).
- More than 15 years in the market (Today they already have 20 years in the market).
- 1 person in the digital team (2019).
“When the pandemic came, the world changed and we mean there was a paradigm shift and we realized that if we did not change our thinking and the processes we had were not going towards digitalization, we were going to have a very serious problem. we realized that if we didn’t change our way of thinking and the processes we had were not going towards digitalization, we were going to have a very serious problem. The vision that Kross had was full B2B (in fact we are part of Concha y Toro’s subsidiary as a company) and we started to ask other types of questions. We had a lot of data but we were not working on the detail of what the consumer wanted, when and how they wanted it. Before the pandemic, we could deliver in 3 days, but then the market would not allow it. In that challenging context we had to learn how to work. The development that Kross underwent was gradual and forceful. The eCommerce in pre-pandemic was not important and then with the pandemic it started to be much more relevant. Somehow we went from being a model of a company with a full B2B vision to start getting to know this consumer and improve the quality of the questions we were asking. We may not know all the answers, but we do want to raise the quality of the questions and nurture other businesses. Key to this was key to working with our partners to begin navigating this new world for us.“. Gonzalo Zigarán Costa, eCommerce and Marketing Manager, Kross.cl.
How to make a successful migration to an internalized model?
“What we did was more and more thinking in terms of omnichannel. It was a great development that we have been working on at Kross and it is one of the great achievements we have beyond the numbers. At the beginning we found ourselves with digital processes that did not exist yet, we did not have digital knowledge. There was a company that thought like a B2B and we had to start thinking like B2C so it was really a structural change, we had to start processes from scratch and the partners were key in this migration.“.
“In terms of structure, first we thought we had to improve the site and change the user experience on the web, making it faster and more attractive. Also change our marketing structure, change the logistical processes. We went on to understand that the data was super relevant as we had a lot of information. We have over 25,000 people visiting our Kross Bars and at that time we didn’t know about it. We were in a digital childhood and as time went by we started to grow in terms of digital experience. That’s where partners like Known Online gave us that learning opportunity and over time we developed the case we ended up with today. We realized that we had the possibility to offer a product that for us is an experience in itself, it is much more than just having a beer at the end of the day. We want to sell a beer experience, that is what allows us to be in a model that we feel is somehow unique, that of having different alternatives that lead you to improve the quality of the questions and that allows you to really get to know your customer. “.
Kross Business Case Capsule: Some of Kross results
- +27% eCommerce profitability.
- +70 hs average hours recovered in delivery time to the customer.
- +75% incremental increase in the company’s database. For example through a QR code on the Kross Bar’s letter where a form was sent to them which then gave them all the flow of customer information.
Kross objectives: How digital did they want to be?
- Improve Ecommerce profitability by 25%.
- Begin to understand omnichannel: boost databases and increase them by 40%.
- Improve delivery: they went from 96 hs average to less than 24 hs.
“Internalizing the business gave us better profitability, better knowledge of our customers, and greatly reduced delivery times and increWe are moving to a much stronger digital structure. We moved to a much stronger digital structure. We started to set objectives based also on the help of strategic partners and to ask ourselves what were the next steps to follow in terms of omnichannel. For example, understanding the recurrence of purchases when a customer buys from Kross.cl and then buys from you in a Taproom or the other way around. Now that we have this information, we can see how we can work on it in the future. “.
How did you propose to achieve these objectives?
- Incorporate eCommerce operation with the help of strategic partners.
- Encourage interaction between the physical points and the online store.
- Improve delivery times and quality.
“We are a store with 35 SKUs, a small store, but nevertheless it is impressive how people keep choosing us and it forces us to offer better and better experiences in terms of site, deliveries, etc. We knew we had to improve the website that had been left in time, we had to have a much faster site and make the shopping experience easier. Now we are working on a Fulfillment that allowed us to improve the quality of delivery and achieve a much more complete experience.
In addition, at a structural level, we had to make changes both internally with the internal team and externally with partners. It was key to choose the VTEX team, for example, which helped us in terms of Customer Success. Our team had to understand what the challenges were, with the Known Online agency we work on the part of Marketing and improved SEM, with campaigns with more investments, with a strategy of email marketing, with a website adapted in terms of SEO. Synergy between the Development and Marketing teams is essential. because it often happens that when you choose a technology, the person who implements it does not know marketing or the marketing agency does not know the technology. It is very important that the teams combine with each other to manage relational audiences, make email marketing or search engine positioning strategies.” .
How was the project executed?
- They moved from the traditional Full Commerce model to the Known Online Full commerce bridge model.
- Facilitated the incorporation of local physical customers to online and vice versa
- Optimized processes in the distribution center and last mile.
Kross Business Case Capsule: What tools and suppliers did you use?
- Known Online as an implementation, marketing and BI agency.
- VTEX as an ecommerce platform.
- Wings as the last mile.
“To the question of whether we could move to a different model, the answer was yes we can. Then it was to ask ourselves how much we are willing to get to know our customers. What do you think? When do you want it, how and where do you want it? How can we improve? That was the big achievement we had. We left that model because we saw a different opportunity in terms of cost savings, structure changes and to boost the profitability of the business.“.
Keys to ecommerce profitability
- Pay attention to variable costs and minimize them.
- Generate economy of scale in partners and suppliers.
- Leverage omnichannel to achieve a lower CPA.
- Encourage repeat purchases.
- Raise the average ticket through staggered promotions.
- Monitoring of logistics KPIS to improve NPS.
Improvements after implementation
- +27% profitability.
- +28% omnichannel purchase recurrence.
- +22% improvement in NPS.
Kross Business Case Capsule: Involved partners and results
Known Online: Implementing Agency
- 12 people involved in the project.
- 6 cross-platform integrations: CRM, ERP, automation database, point of sale, logistics, SAC, WMS, PMS.
VTEX: Saas Platform
- 4 months from the start of the project to go live.
- +32% conversion rate.
Kross Business Case Capsule: What were the challenges and pain points?
“In eCommerce you have to be very prepared because there are many things that can be very unpleasant. For example, one of the biggest challenges are the Cybers because they show you all the good and bad things you can do and it shows very quickly. But we also know that The success was to have the structure and organization that we had with the partners. It gave us the facility to experiment in this structural change so that we had the least amount of pain points and knew that we had a lot of learning processes. . There was a continuous and very marked improvement. This is the opportunity we have to continue to develop as a company, we have a product and a very big opportunity yet. “.
Kross target 2023
- Maintain profitability growth of more than 15% YoY.
If you want to see the full talk of the Business Case Capsules at Ecommerce Day in Chile click here.
You may be interested in:
- Success story Kross: “With Known Online we made a great leap as a company at a digital level”.
- Webinar Summary: How to Plan a Full Commerce Exit Process
