Question

Checkers, founded in 1956 in Brakenfell in the Western Cape, is a supermarket chain that operates across Southern Africa. This FMCG retailer is owned by Shoprite Holdings Ltd. and has supermarkets, hypermarkets (larger format stores) and specialty stores (Checkers Liquor) in South Africa and neighbouring countries. In 2021, MarkLives (an independent marketing and communication online platform) recognised Checkers as South Africa’s most admired brand. The FMCG retailer, known for convenience, quality and freshness, is now reaping the benefits of its commitment to innovation. Checkers appeals to the mid-to-upper consumer market and has achieved its leadership position by offering value to customers through constant innovation. On receiving the nomination, Checkers COO, Willem Hunlun, affirmed the company’s commitment to creating value for the customer.

"We are honoured to have been recognised as South Africa’s most admired brand and wish to thank our customers as this would not have been possible without their continued support." - Willem Hunlun, Chief Operating Officer for Checkers.
Adapted from MarkLives (2021)
Over the past three years, disruptions to economic activity caused, in part, by the 2019 pandemic and its repercussions, have etched a lasting imprint on consumers’ perception of value. When cities were in ‘lock-down’ and consumers housebound, service became the most critical aspect of the relationship with retailers. Consumer perceptions of value have shifted such that service has overtaken product quality and brand on the value index. Successful retailers have noticed this shift, taken steps to identify customers’ service needs and aligned their supply chain strategies accordingly.
Using the 4-step model suggested by Christopher (2016, p.40), and the information gleaned from your research, describe how Checkers linked customer value to its supply chain strategy by offering a 60-minute delivery service – the first of its kind in South Africa.

What value segments did Checkers identify, more particularly a segment that emerged during ‘lockdown’, and what are the needs of these segments? Suggest relevant characteristics and service needs of each segment (traditional and emerging segment). Consider also what aspect of service each segment is likely to value most.

Answer 1

Checkers used the Christopher model to innovate their supply chain strategy by offering a 60-minute delivery service, catering to new consumer needs during the pandemic lockdown, focusing on the emerging value segment that highly values quick service and convenience.

Step-by-step explanation:

The Checkers supermarket chain utilized the 4-step model by Christopher to link customer value to its supply chain strategy during the disruptions caused by the 2019 pandemic. Offering a 60-minute delivery service, Checkers addressed an emerging value segment that prioritized convenience and speed of service due to the limitations of lockdowns.

In light of the shift towards valuing service over product quality and brand, Checkers identified two main segments: the traditional shopper, who values the reliability and quality of products, and the emergent segment from the lockdown period, who places a higher emphasis on service speed and convenience. The needs of these segments include efficient and rapid delivery times, guaranteed product availability, and a seamless online shopping experience.

The traditional customer segment is likely to value the assurance of product quality and consistent availability. Conversely, the lockdown-emerged segment prioritizes the speed of delivery and minimal disruption to their routines, leading to the high appreciation of services like the 60-minute delivery offered by Checkers. The success of such a strategy showcases the importance of understanding and adapting to consumer needs in real-time to maintain and enhance retail leadership positions.