Morrisons [IRDX RMOR] is now a week into its online grocery service. Deliveries started last Friday within the Midlands and the supermarket expects to cover half of the UK by the beginning of 2015. So far, said the supermarket today, those deliveries have been well-received. “We’re very, very happy with our performance in the first week,” said Morrisons head of media relations Julian Bailey. “Customers overall seem really happy. Of course you will get the odd teething problem but nothing we’re overly worried about at this stage.”
Morrisons will be reporting on the early progress of the venture, run in partnership with Ocado, in its full-year results on March 13. Analysts will be waiting with interest to see whether the service will compete effectively with those longer-established services that are already used by Morrisons’ customers. Those customers, Morrisons has said, already spend £0.5bn each year buying from other providers. It is hopeful that it will gain ground with those consumers. “The early signs are that there is clear demand from Morrisons customers to shop with Morrisons online,” said Morrisons’ Bailey.
So is the launch timely, building on insights already gained from others’ experiences, or is it too late, with many of Morrisons’ own customers already loyal to other grocers?
That’s the question Internet Retailing editor-in-chief Ian Jindal [IRDX IIJI] tackled in a recent interview on BBC Radio’s Shane O’Connor Breakfast Show. He suggests that while Morrisons’ may believe it has a second mover advantage, it has, “lost the opportunity to lock in early adopters and get that loyalty.” Instead of competing to be cheapest, it is now competing on quality, with services including the virtual butcher who will cut meat to order. Now, says Jindal, “This is a fight for the customer and not just for the online order”. Customers, he believe, will not quibble about the odd penny here or there on a can of beans. Rather, he says, the question they are deciding on is: “Who do I prefer to buy it from? Who do I see as my shop? That’s who they’re going with.” The task now for the supermarkets, he suggests, is to win shoppers’ hearts and minds by giving them the service that they want, when they want it.
Hear Ian Jindal’s interview in full (4 mins) here.
Do you agree with him? Leave your comment below.
Mentioned in this piece…
Ian Jindal is the co-founder and Editor-in-Chief of InternetRetailing.
IRUK and IREU Advisory Board member, 2015.