With a maturing online market, grocery websites need to create new ways to stand out to price-savvy customers. Staying ahead of the game is grocery price comparison site mySupermarket.co.uk, which compares the cost of products among the big four online supermarkets — Tesco, Asda, Sainsbury’s and Ocado (Waitrose) — and lets users cost their baskets as they shop.
Founded three years ago by Jewish entrepreneur Johnny Stern, who has since left the company, mySupermarket has a 3.5 per cent market share — greater than Ocado — and has close to one million monthly users. Amir Konigsberg, the firm’s vice president of marketing and business development, who has taken over from Mr Stern, believes it can be one of the most visited sites in the UK.
Israeli-born Mr Konigsberg is a former strategist at Google. It was there that mySupermarket “caught my eye”. He has been involved in the company, which uses technology developed in Israel, since its inception but says there has been a considerable increase in the number of users over the past 12 months as consumers seek more cost-effective ways to shop in the recession. “The site allows users to save within an existing supermarket. That has been one of the main focuses of this year,” says the 32-year-old, claiming you can save up to 20 per cent on your average weekly shop, and around £1,000 per year. “That’s a pretty nice holiday and all by swapping the like for like in the retailer of your choice, without even switching between them.”
But Mr Konigsberg acknowledges that the site must continue to innovate to differentiate it from others, particularly as the internet’s role in grocery shopping is increasing. In April, Tesco said online sales had increased by 20 per cent year on year, while Sainsbury’s reported web sales up by 20 per cent for the 12 weeks to 13 June. Advertising, which makes up about half of the company’s revenue, has become increasingly important. “We are basing our website around the need for a more authentic shopping experience.
“We have enabled technologies, revolutionary to the fast moving consumer goods (FMCG) industry, that allow advertisers to target users based on the contents of their trolley.
“This type of super-targeted advertising is great for the user because they receive adverts relevant to them, and it’s great for the advertiser because it can drive sales. So far, this is going very well.” For instance, Pampers will target someone who may have previously bought nappies or other baby products. “They won’t be wasting money on someone shopping for baked beans.
“When I was at Google, I learnt that accountability and measurability are key and this is what marketers need to understand. That is the stage of the internet we were at three or four years ago, and it is slowly coming to the grocery industry,” says Mr Konigsberg, who divides his time between London and Tel Aviv.
Is it not a tough time for advertising in general, though? “It is hard but we are doing very well, as opposed to the food and grocery industry in general. The FMCG industry is a bit of a late comer to online but they have jumped at the opportunity of advertising on a channel which isn’t just for branding purposes. It has bottom line impact because we are targeting users at different stages in the consumer buying cycle.”
Besides, the company is also benefitting from its other main revenue stream: Insights, a paid-for service that provides marketers, brands and retailers with real-time price data and trends. For instance, Asda’s famous pocket-tapping advertising campaign uses mySupermarket data to claim it is the UK’s lowest price supermarket.
Since its inception, mySupermarket has grown from a simple price comparison proposition to include a raft of consumer offerings and has brought in high-profile names, such as David Soskin, the former Cheapflights CEO as vice-chair of its board. It now provides information to brands, including Unilever and Kellogg’s, and investment banks. “What is unique about mySupermarket is the ability to provide updates about offers and prices in real time to all manufacturers and brands. It enables you to follow the correlation between promotions and online sales, which is a very powerful thing. We know which promotions work and which fail and that is very valuable data for the consumer grocery industry.”
According to Mr Konigsberg, the average trolley cost in July 2009 was £80.80, up from £80.10 in July 2008. “Considering that food inflation is running at about four per cent, it shows that shoppers have managed to keep an eye on what they are buying to keep their costs down.” He adds: “We have definitely seen an increase in the number of people switching between shops searching for deals and down shifting to own-brand products.”
Retailers are also having to change their tactics to keep their customers. Tesco, which has been losing ground to Asda, Sainsbury’s and Morrisons, recently doubled the number of points on offer through its Clubcard loyalty scheme in what analysts viewed as an attempt to close the gap with its rivals.
“We had seen a trend of shoppers deserting Waitrose and M&S in favour of Asda, Tesco and even the hard discounters: Aldi, Lidl and Netto,” says Mr Konigsberg. “However, with the high-end retailers belatedly starting to focus on cutting prices as well, many shoppers are returning to their favourite stores, confident that they can now get their groceries for a lower price than six months ago. In addition, food inflation, which rose by approximately 16 per cent between 2007 and 2008, has now dropped off, making the price of basket of groceries slightly cheaper than it was a year ago.”
A PhD candidate in philosophy and cognitive science, Mr Konigsberg graduated from the Hebrew University before joining Google in 2005, where he helped develop their operations in emerging markets. Although Mr Konigsberg has been working with mySupermarket for the past three years, he did not officially join the company until last year. “I was at Google when I became aware of the site. I met with Johnny and fell in love with the product.”
The site has secured funding from Manchester-based communal figures Joshua Rowe and David Hammelburger, in addition to around £3 million from Greylock, the venture-capital firm that backed Facebook, and from Israeli venture-capital fund Pitango.
As for other online opportunities, he says: “There are loads of opportunities in retail to help shoppers with a more convenient experience. It is about helping people find the information they need to make the best and most informed choice of product or retailer. In this way helping them make the right choices. Any start-up that is able to do this — treat the consumer as the king — will win.”
The CV
● Present: VP of marketing and business development, mySupermarket
● 2006-08 Strategist, Google
● 2004-05 Research fellow, Max Planck Institute, Germany
● 2003-05 Editor and evaluator, National Institute for Testing & Evaluation, Israel
