Covid accelerates e-commerce in Greece for number one marketplace and leading digital player

Public: leading digital retailer

Covid and an under-developed online market is accelerating e-commerce growth in Greece and particularly for PMM Group, the business created from the merger of Public, Greece’s top digital retailer and only online marketplace, and the Greek arm of MediaMarkt, Europe’s leading consumer electronics retailer. 

Despite PMM’s first mover advantage and investment in modern systems and platforms, circumstances changed over night with Covid, recalls Christos Kalogerakis, PMM’s CEO.

“The first thing we did was to protect our internal audience, our employees. Then we focused on building our capability and creating a tactical strategy to support increased demand and customer orders at the point of time.”

With online retail already accounting for 19% of PMM’s sales, the business had the capability to respond to increased demand due to the pandemic. However, an under-penetrated e-commerce market meant issues occurred in the last mile.

“Our handling times with customer orders were very quick but the couriers could not adapt to the huge increase in demand,” Kalogerakis reports. As a consequence, every player in Greece is now reviewing their last mile strategy.

“We need to control the last mile as much as possible as the customer experience is directly associated with it,” Kalogerakis says.

Kalogerakis blames the 2008 economic crisis, which severely impacted Greece, for the country lagging behind other European markets for e-commerce development. As such, there’s no Amazon, eBay or Alibaba established in Greece, even though Greeks may buy from those online marketplaces. Similarly there’s been no investment in supply chain, warehouses or last mile. 

That, coupled with Covid, means e-commerce growth is poised to accelerate, Kalogerakis maintains. It’s PMM’s ambition to remain number one and the undisputed leader in e-commerce, he adds. 

Wide assortment

Broad range

Assortment – and a wide one – is key to realising that growth, Kalogerakis says.

PMM’s broad offer, which ranges from smart phones to books, toys, stationery, services and tech, provides opportunities for customers to come again and again.

“We have the widest target audience and we offer the best proposition,” Kalogerakis states. “We are not a supermarket – we sell ‘wants’ not ‘needs’.”

The business is also able to leverage its retail footprint and brand – especially Public, which is claimed to be one of the most appealing in the Greek market.

Growth in online during pandemic

As in other retail markets, all non-essential stores were closed in Greece at the height of the pandemic in March. That forced everyone online with home office products and IT including notebooks, desk tops, printers etc flying off the virtual shelves. Further, since Greeks favour physical products over new media, sales were strong here too. 

“The number of orders was huge for us and more than the addition of all the big retailers in the Greek market, including MediaMarkt,” Kalogerakis says. The business actually delivered 600,000 products during lockdown in Greece – more than all its competitors put together. 

While stores in Greece reopened in May, first on the high street and then in malls, customers were initially reluctant to revisit, especially to malls.

Further, while there was an anticipation that the majority of shoppers would order online for home delivery post-Covid, the numbers who elected to order online but pick up in-store quickly returned to pre-pandemic levels.

“Every player in the market says the same thing. People prefer to go back to the ‘new normal’,” says Kalogerakis.

New marketplace sellers

Another trend resulting from the crisis has been the number of third party sellers selling through PMM’s marketplace platform. Pre-pandemic there were 220 sellers. Now there are 1,250 with many more in the pipeline and currently onboarding, Kalogerakis reports.

This growth is also attributable to an under-penetrated market, where many ‘mom and pop’ type stores have the appetite to sell but lack the technological capabilities and platform, states Kalogerakis.

For its own part, PMM is formulating its new strategy for last mile delivery, which will be a hybrid model comprising third party, large carriers plus more agile providers – a mix of its own fleet but also cooperating with two new start-ups in the Greek market. 

The business has also had to get to grips with integrating the Public and MediaMarkt operations during the crisis and to determine the biggest assortment and best prices, with many new to the company categories such as home appliances and white goods. 

“We had to do everything multiplied by two and we were in the middle of the integration [when Covid hit], so it was more difficult. 

“However, we have completed our systems integration. It was one of the biggest deals in the Greek market and everything went to plan, so now we are more confident than before,” Kalogerakis says. 

Extra costs necessitated by the pandemic, such as for PPE, were not budgeted but the decision was made to “let’s try and have the best customer experience we can”, Kalogerakis says.

He reports the business adopted Government measures but two to three fold in order to “feel confident that our customers and employees feel safe”. They are un-budgeted costs but then 2020 has been a very awkward year, Kalogerakis adds. 

Operating an omni-channel business meant PMM was shielded from tough decisions. MediaMarkt, for example, has a portfolio of just 13 stores.

“To focus online or close stores was not an issue for us,” Kalogerakis says.

Public, meanwhile, operates 51 stores and has concessions in six MediaMarkt stores, an integration that has been carefully managed so as not to confuse customers. 

“They are very different target audiences but we are very happy with how they are operating in the first two and half to three months. Customers feel they can find a proposition under one roof that they could not find in other players,” Kalogerakis says.

Plus, there’s plans to expand the network and take MediaMarkt into new, carefully selected locations. 

“Even after the pandemic there is a plan for some stores opening in very important areas in Greece where MediaMarkt is not yet present,” Kalogerakis states. 

PMM maybe big by Greek standards but is also proving to be suitably agile and nimble, witnessed by the launch of a drive up model for MediaMarkt, launched in the first two weeks into the pandemic.

How the business will fare in the near future with Black Friday and Christmas looming, is anybody’s guess but Kalogerakis does expect “totally different Black Friday and Christmas period”, since people have already invested in tech during Covid so demand will not be comparable to previous years. 

But it doesn’t daunt the PMM CEO, who spies the potential in an immature market and is currently recruiting new talent from external markets.

“We need this knowledge and we are hiring two very senior executives from European markets, who like our ambitious plans. It’s a bold decision to bring the right competences onboard. At the same time, we are strengthening our board with a new PMM chairman, who is ex Amazon. We try to do our best and embrace this opportunity and feel sure we will be the number one in terms of people as well.”