The KoRo business idea
Selling non-perishable food like dried fruit, nuts and rice is nothing new in itself. But this is exactly what made two guys from Berlin established players in the e-commerce market. How? Through a winning concept based on optimized purchase prices. KoRo’s concept is honest, innovative and customer-centric. Sourcing its wares directly from the producer while guaranteeing great flexibility in package types and size at the same time. This allows the company to ensure short trade channels and low purchase prices that can be passed on directly to end consumers. KoRo’s track record since it started up in 2015 shows just how successful customer-oriented business models can be: hundreds of millions of euros worth of sales, up to 300 orders dispatched every day and almost 1,000 products in its online shop.
The growth champion’s system landscape – ERP, shop, fulfiller and other tools
KoRo relies on future-oriented, scalable solutions and processes. Specifically, it has Shopware as its shop system, uses xentral as its ERP system for all business processes, outsources logistics to a fulfillment service provider (that uses Descartes pixi as a WMS system) and conducts all of its post-purchase communication via PAQATO.
Thanks to the very latest Shopware plug-in xentral Business Booster, xentral’s ERP business modules can be accessed even more easily by Shopware customers.
- xentral imports all orders, aligns inventories, loads the updates to all sales channels and notifies you about any articles that require reordering.
- Whether you work with your own warehouse, FBA or a fulfiller, one glance is all you need to keep track of your logistics at any time. You can also analyze and benchmark the performance of your logistics. CEO Constantinos Calios explains the benefit: “The more products you move, the more inventory needs to be managed. xentral and our fulfillers are connected seamlessly with one another. Thanks to the processes made available by xentral, picking and packing errors are a thing of the past. As well as this, xentral automatically prints shipping labels. The workflow runs automatically. It’s incredibly efficient.”
- With the new Shopware plug-in xentral Business Booster, all incoming and outgoing invoices are available centrally, can be preassigned on request and are sent to your accounting department automatically. KoRo also benefits from this function: “Shopware allows us to offer our customers lots of different payment options. With xentral, all types of payments are posted automatically – meaning that our accounting people no longer have to do anything manually. Which in turn saves us a whole lot of time.”
Top tip from KoRo
Use software solutions like xentral ERP and Shopware that grow as you grow. Before discovering xentral, we used another ERP provider that wasn’t able to handle our growth. So we had to switch over to xentral. Otherwise it just eats up time that would be better invested in your business. For example in post-purchase communication via PAQATO. Our logistics was outsourced to fulfiller VAH Jager, which uses Descartes pixi as a WMS and receives all data from xentral ERP.
Communication: customers are looking for authenticity and expect to be kept informed while the package is on its way
It’s not just a question of choosing the right marketing channel. Rather, you should ask yourself: “What do my customers want to see and hear?” At least that is the advice given by CEO Constantinos Calios:
“Don’t limit yourself, don’t get entrenched in your own assumptions and avoid being overly technical. Agencies often try to force over-engineered communication strategies onto founders. We’d advise against that. Customers are looking for authenticity. Think carefully about the USP of your idea or product and how you can communicate this message to your customers authentically and across all communication channels. Believe in yourself, be daring in your communication, but above all be creative in your choice of medium. As a food company, we work with different channels at the same time. These include influencer relations, YouTube, Instagram and podcasts.”
An insider tip from KoRo: Post-purchase communication
Modern online retailers invest lots of time and money in their shop and brand profile, advertising measures, and influencer marketing. They do so to attract people’s attention and to get them excited about their products. But once the purchase has been made, the retailer’s communication grinds to a halt. Communication of package delivery information is handed over completely to shipping service providers like DHL, DPD, Hermes, etc. But KoRo also realized that the shipping process harbors plenty of potential for marketing while also greatly reducing customer service queries through proactive communication. This is because customers are generally very willing to engage in communication after making their purchase. Customers open more than 80% of emails and text messages sent proactively by KoRo while their package is in transit. Studies by post-purchase communication provider PAQATO also show that there is a lot more untapped potential in post-purchase communication:
- 80% of emails opened
- 20% of recipients return to online shop
- 3% higher purchase conversion rate through returning customers
- Increased customer satisfaction through proactive communication by the retailer with its customers
- Increased number of positive ratings for the retailer
The PAQATO tool also offers KoRo more than 40 different information messages in addition to standard status messages such as “Thank you for your order”. These messages can also include additional content like complementary products, articles in alternative colors, job advertisements, weather forecasts and options for rating the shop. These days, KoRo’s communication is both automated and proactive. Had there been a delivery problem before, customers would have contacted KoRo and its customer service team would have looked for the source of the problem. First, the tracking number would have been sought out manually and then a call made to the fulfillment service provider, which rarely ended up resolving the matter. This meant that, in many cases, they had to contact the shipping service provider to be able to give customers a satisfactory answer about what had happened to their package. But with PAQATO, KoRo saves valuable time and takes the strain off its customer service team. This allowed the company to bring about a significant reduction in queries about packages while increasing upselling at the same time.
Boosting efficiency with the Pareto principle
No matter what stage of development or growth you are currently at, there are always new challenges ahead. To counter this, the young start-up applied the classic Pareto principle, also known as the Pareto effect or 80/20 rule. This rule states that 80% of results can be achieved with 20% of total effort. The remaining 20% of results require the most work, accounting for 80% of total effort.
As Calios explains: “Say for example that you want to have your product listed at Tesco’s, Safeway or some other supermarket chain. If you call them up, you will generally be given the contact data for the buyer responsible for your product category – just like thousands of other start-ups and companies. Then you are requested – just like all the others – to send your information by email. Though a snazzy presentation can help, it’s very unlikely that you will get any feedback. This is why we would suggest going to virtual trade fairs and other events and using personal contacts. Do you know someone who knows someone who knows someone else? After all, the more touchpoints you have, the faster things are likely to happen.”