Exclusive: our conversation with innovative Brazilian retailer Hirota about its new autonomous micro stores

Oliver Butterworth
Retail Analyst
@RetailAnalysis

Date : 27 August 2020

Hirota is a Brazilian grocer with more than 40 stores in São Paulo, between supermarkets and convenience stores. In response to the pandemic, and to support vulnerable sections of society, the business has begun to open fully autonomous micro convenience stores, built in common areas of condominiums.  

Following on from our recent article on the new proposition (here), we caught up with Hélio Freddi, Hirota Food Express’s general manager.

Proposition inspired by the pandemic

The micro stores (which measure between 15 and 30 sq. m) are built in adapted shipping containers, which Hirota has named Hirota Express en Casa (Hirota Express at Home). Although we have seen similar stores in other markets, for example Auchan Minute in China, it was the pandemic that inspired the development of these stores in Brazil.

“The inspiration came from the Covid-19 pandemic. We wanted to take the store to serve customers at risk, and those who were in social isolation. It was a project built quickly, in less than 3 months.”

Source: Hirota

Hirota targets densely populated condominiums in São Paulo

Speaking about their target location and demographic, Freddi says “we seek residential condominiums with more than 300 apartments of social classes A, B and C”. When asked if Hirota plans to expand the model outside São Paulo, Freddi explained the company had not “thought about it yet, as we have hundreds of large condominiums in São Paulo. We want to be the largest micro market store chain in São Paulo”.

The stores will be highly convenient for customers, particularly those who are self-isolating or living in more remote locations where it is problematic to reach stores. Freddi states “The smaller the offer of local commerce, the more interesting it is for this store model”.

Fully autonomous, 24-hour stores

The stores are fully autonomous and require no staff. Customers download and register their biometrics in an app, which provides them with an exclusive QR code they use to enter the store. Smartphone ownership is widespread in larger cities in Brazil, so this does not act as a barrier to entry. 

The necessity to register in an app provides Hirota with useful data on consumption habits: “The moment the customer downloads the app, registration takes place, and from this moment on, we can follow their shopping profile.” It can use this information to send shoppers targeted promotions.

Source: Hirota

Once shoppers have chosen their products, they activate one of two self-checkouts, using a personal identification code, and pay by credit/debit card before exiting the store.

Source: Hirota

Residents can influence range changes

Initially, the range consisted of around 500 SKUs across food, beverages, alcohol, bread, fruit and vegetables, confectionary, personal hygiene and cleaning, and refrigerated products (including a selection of meats and ready meals). Up until now (August 2020), the bestselling category has been beverages.

Source: Hirota

According to Freddi, the residents can have their say in the evolution of the range: “We are working with the same product mix and making adjustments according to the suggestions of the residents. The client participates in the operation and mix, suggesting adjustments.”

Pricing and promotions aligned to supermarkets

The price of products and promotions are “fully aligned with [Hirota’s] supermarket prices”. Freddi states: “It is essential for the success of the project that the prices are the same as those of our supermarket chain”. This is simplified using electronic shelf-edge labels which are controlled and updated centrally at Hirota’s headquarters.

Opportunities to partner with brands

When asked if there was a way for brands to work with Hirota, Freddi said: “Yes, many brands have already reserved space, offering commercial advantages in the negotiation.”

Source: Hirota

Plans to reach 100 micro stores by the end of 2022

Hirota currently operates two Hirota Express en Casa stores and plans to have 15 in operation by the end of 2020. Beyond this, it intends to open around 35 stores in 2021 and 50 in 2022, taking its total number of stores to 100 in this format.

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