Reference no: EM132905898

Hummelsta, a town of 1 000 people in Sweden surrounded by a beautiful pine forest, has not had had any local shops for a decade. Since December 2020, a red wooden container, has offered a lifeline, serving as a mini grocery store that locals can access round-the-clock. The store stocks a wide assortment of groceries, from fresh fruit and vegetables to Swedish household staples like frozen meatballs, crisp breads and wafer bars. Inhabitants now no longer have to travel to the city to buy small convenience snacks and small grocery items. The store is part of the Lifvs chain, a Stockholm-based start-up that launched in 2018 with the goal of returning stores to remote rural locations where shops had closed down because they struggled to stay profitable. The specificity of the Lifvs store is that there are no staff or checkouts. You open the doors using the company's app, which works in conjunction with BankID, a secure national identification app operated by Sweden's banks. Then, you can scan barcodes using your smartphone and the bill is automatically charged to a pre-registered bank card. Alongside skipping the need to pay cashiers, the firm also avoids pricey long-term rental leases. And if there's less footfall than expected in one location, the wooden containers can easily be picked up and tested elsewhere. Sweden has a tech-savvy population, so it is easy to see why the model has taken off here, despite critics warning that it would make shopping a less sociable experience. And, during the pandemic when people have been encouraged to limit contact with others, its lack of staff has been a major bonus. The consumer has matured a lot in a digital way during the pandemic. Swedes have been shopping online, they worked through video calls. Therefore, they are ok to now to go into a store using a digital tool like a mobile phone. Shopper Ms Hellqvist atetes: "My parents are 60, but they don't have a problem with the technology."

Lifvs co-founder Daniel Lundh saw the opportunity in rural locations, and the chain has opened 20 new shops in rural neighbourhoods since March last year. Lifvs is planning to launch hundreds more container stores in Sweden in the next few years. There is global interest in the idea, and the company's mulling whether to share its technology with supermarket chains in other countries or launch more of its own container stores across Europe.

Since the company always knows the identity of who is in the store at any moment, this limits shoplifting. There are 24-hour surveillance cameras too, which alert the store's manager if there is a break-in or a stock spillage. The manager looks after four stores in the region, usually visiting once a week to clean, stack the shelves and put together click-and-collect orders made online. Lifvs uses artificial intelligence to work out what stock to order for each store, based on the data it collects about locals' shopping habits. Customers also receive digital coupons and special offers based on their previous purchases. Elsewhere in Sweden, Lifvs has competition from the country's major supermarket chains ICA and Coop, which have been testing both unmanned stores and hybrid models, with some shops going staff-less during off-peak hours only. In Stockholm, Coop recently opened an unstaffed convenience store in the city centre. While quieter than usual during the pandemic, the idea is that its tech-aware members can feed back on their experiences using the store, and any other new retail technologies Coop wants to experiment with.

Q1. Critically analyze the Business Model of Lifvs (i.e. how it creates, delivers, and captures value). Propose a short statement of its value proposition.

Q2. Critically analyze what types of Appropriability Mechanisms are available to Lifvs, and hence recommend which one(s) it should adopt to protect its resources.