Morrisons is late to the online party but could reap mobile rewards
It’s crunch time for Morrisons. The supermarket is late to the party in launching an online operation and it will need to leverage Ocado’s expertise, if a deal is agreed, in order to bring something new to the table and convince shoppers to switch services.
The supermarket confirmed earlier today (14 March) its intention to move into the internet grocery market and said talks with the online grocer “may lead to an agreement” that would see it use Ocado’s technology and know-how to launch an online service.
Morrisons says it now has a plan to make its online grocery offer profitable and set it apart from rivals.
A lack of a branded online presence has stifled sales. It reported a drop in like-for-like sales of 2.1 per cent for the year to 3 February 2013 whereas the multichannel services of rivals such as Sainsbury’s, for example, helped them to deliver positive results over the festive period.
Online retail sales in the UK are predicted to top €64bn (£51.9bn), up from €40bn (£34.6bn) by 2017, according to Forrester. This trend is being accelerated by consumers using mobile devices and is an area that could pose some last-mover advantages for Morrisons – provided there is a strong enough link between its bricks-and-mortar offerings.
Mobile is an area yet to be properly mined by supermarkets, but it has become a bigger focus in the last 12 months. Asda announced predictions for grocery orders placed on mobile to double through its click and collect offer this year.
Ocado has also made a real effort in this space, with the company reporting that 28 per cent of all orders are now placed via a mobile device. It’s a clear indication that m-commerce will continue to shape the course of its business over the coming years and is where Morrisons should look to focus discussions between the two.
The company needs to look at ways of bolstering its customer insight offering as a lack of a loyalty card scheme could dampen the impact of its online service through lack of information. Once you better understand your customers, once you know what makes them tick, the business can put the right package before them, whether that’s an e-commerce site or a shopping app.
The supermarket’s last-mover status could work in its favour but it will need to make mobile a key differentiator if it is convince shoppers its online push has been worth the wait.