Robin Phillips , Director of Ecommerce at Waitrose , speaks to Emma Herrod about the phenomenal growth of the grocer’s online business and the launch of its dedicated wine site.
AROUND £262M of Waitrose’s £6bn annual turnover is now generated by Waitrose.com. While this may seem like a small percentage of its overall sales, its online grocery business has recorded a significant 41.4% growth over the past financial year.
This growth has been put down to investment in products and services, innovation, personalisation, its continuing adaptation to changes in cross-channel behaviour, plus its new look for the site, which has made it more tablet friendly and easier to register, navigate and search for products.
Like-for-like sales at its physical branches remain fairly constant with 5.1% growth this year. But with Waitrose outperforming the market for 56 months in a row, according to Kantar, most of the growth is incremental as it comes via new transactions online. Customers continue to do top-up shops in store but are completing their ‘full’ shop at Waitrose. com. “People are realising they can do a full shop and keep their behaviour of topping up with us,” says Robin Phillips, Director of Ecommerce, Waitrose.
Growth in 2014 has been particularly strong following a four-week television advertising campaign in January highlighting Waitrose. com and the home delivery service. Online has since grown by 110% and become as much as 20% of all transactions at one branch.
“Our customers are technology savvy and heavily armed with kit,” says Phillips. “Although that’s a plus, it’s also a challenge since customer expectations are high and set by the likes of Amazon and John Lewis. However, the John Lewis basket is 2 or 3 items and they don’t have to be picked from different locations and be kept at different temperatures until they are delivered to the customers’ door. It’s like doing 1-click with Amazon but we’re trying to be ‘simple, smart and seamless’ with a 50-item shop (from a choice of 20,000 skus) that has to arrive in great condition, with the right sell-by date. That’s very different.”
He adds: “Customers expect a Waitrose experience that’s relevant to the technology they’re using; where they are on their shopping journey; and their emotional state – whether that’s transactional or inspirational. We try to give customers the most relevant and helpful experience, whichever touchpoint, device and channel they are using.”
The tablet is increasingly important to the retailer since one third of transactions are now made via this medium, according to Phillips. The current iteration of the Waitrose. com site is built on the IBM WebSphere platform with HTML5, so it gives customers a good experience on all devices, including tablets. An upgrade to the latest WebSphere platform is in Waitrose’s digital roadmap for its main grocery site following the launch of its waitrosecellar.com wine site.
As other retailers have found, shoppers are using their tablets in the evening when they want inspiration and offers as well as a purely transactional experience. They are planning the weekend’s dinner party, seeking inspiration such as a recipe from chef and face of Waitrose Heston Blumenthal or looking for wine to go with it, explains Phillips. The site will flag up occasions such as Mother’s Day so customers can start planning a dinner they can cook themselves or have it pre- prepared through the firm’s made-to-order service. Full details are given under a separate ‘entertaining’ tab.
Some customers start their shop by looking at the items that are on offer, explains Phillips, while others go straight to typing in their entire shopping list in the jotter application, which then searches for them. Their favourite items or brands, based on past purchases, are offered as the first result. For example, 2 pints of Cravendale semi-skimmed milk might be shown as the first option in a selection of milk bottles as the most often or usually purchased milk brand. For those shopping on a tablet, it is then simple to swipe across the row of bottles to see alternatives.
CELLAR HINTS AT THE FUTURE
Waitrose’s new wine site, waitrosecellar.com, which launched in early May, is part of its mission to inspire customers, however they buy.“This isn’t just about inspiration in our digital channels, it’s about the store environment as well,” said Tony Rivenell, Head of Omnichannel Delivery at Waitrose. The site features a wine finder, recommendations from wine specialists, tasting notes and videos from the company’s award-winning wine buying team and in-store wine experts. It is Waitrose’s first to feature ratings and reviews, using Bazaarvoice technology. Individual customers will see relevant content that’s personalised to their interests. “It’s creating a much richer, much more engaging environment, that brings Waitrose to life,” said Rivenell. He said the Cellar was the first example of an approach that would be extended across Waitrose’s sales channels. It’s also the first Waitrose site to be based on the latest version of the IBM WebSphere platform. The Waitrose vision of a joined-up future is illustrated by typical customer, ‘Mrs W’. She might be invited to the store for a personalised tour. On arrival, she might have something to eat from the grazing bar before being shown to the wine department to be talked through the wines recommended for her on a particular day, said Rivenell. Once she’s seen that information she can scan the bottle of wine herself, using a mobile app released soon after the website, to get more information. She might choose to buy from the extended range that’s stocked online, checking out using her myWaitrose details or at the in-store point of service. Once she’s bought a wine, tasting notes will be sent to the phone. In future, said Rivenell, “a customer can turn up at the store, pre-order their goods, one of our partners will pick and pack that for them, the customer can graze the store, and through a concierge service take delivery of their goods. It’s a much more experiential service and that first comes to life with the Cellar.”
New customers can see suggestions of full shopping baskets or import their list of usual purchases or favourites from other online supermarkets functioned by mysupermarket.com. Phillips says that customers generally have a list of 100 items from which they regularly purchase.
The mobile site and iPhone app make it easy for them to alter their order or add items that they forgot in their original shop. It also includes a barcode scanner through which they can get further information about a product or add items to their shopping list. The retailer is further developing the experience of the in-store shopper using the Waitrose mobile app on their phone.
It’s also developing the online experience as it draws further on the expertise of its partners – its name for all members of staff who are co-owners through its co-operative business model. “Partners are at the heart of what we do,” says Phillips, which is why their faces can be found on delivery vans as well as online to help signpost shoppers on their journey around the site.
Customer experience, product quality and the partners are the main reasons why customers visit a branch of Waitrose explains Phillips. Customers trust the partners, often knowing them or being friends with them in branch. Online, customer expectations are high so technology standards have to be high as well. What remains important, he adds, is the personal touch. So the challenge for ecommerce, says Phillips, is: “How do you get that warmth and authenticity that customers receive in branch and translate that online and onto the site itself?”
For customers having their shopping delivered, the face of the brand is the driver’s. Another way of reinforcing the personal touch is to showcase partners online. They are already used to signpost customers around the site, and the company has been busy filming partners in store sharing their expertise for the new wine website, which launched in early May. One of the wine specialists at the Stratford branch has been tweeting about wine and connecting with customers after starting the initiative himself. Waitrose does have a social media team, led by Julia Randall, and Phillips says the retailer is “experimenting and innovating” with this medium, explaining that branches have “freedom within a framework”.
An upgrade to the latest version of WebSphere is planned for the main Waitrose site with Phillips seeing “quite a role for video and integration of Waitrose TV throughout the site”. This could be showing a video of a recipe being cooked alongside the recipe text so “bringing together the transactional journey with the inspirational one in a way that’s seamless”.
Customers have told Waitrose that they don’t like major changes, so there will be no more “big blockbuster developments” on the site as the company moves to a process of continual and more iterative developments. That’s not to say that there won’t be changes, adds Phillips. But they’ll be gradual improvements that are noticeable if you look at the site at the end of a year and compare it to the beginning, he explains. This is helped by the business and systems teams at Waitrose working next to each other as they hot desk.
“It’s better for the customer and the teams,” says Phillips. “Customers don’t particularly like massive change at once, they like improvements.”
MYWAITROSE
Some 70% of all Waitrose transactions are made by 4.5m myWaitrose cardholders with the card proving a valuable source of data and giving opportunities for personalisation. It will be “very significant for us in the future,” says Phillips. The card is the company’s way of saying thank you to its customers, he explains. It’s personal, wanting customers to feel that Waitrose is a trusted friend. “We’re conducting an adult-to-adult conversation,” he says. “We’re not stalking them on social networking.” He emphasises that the company has to behave in “ways that our customers expect us to” and that are “consistent with the brand”.
PARTNERS & STORES
The role of stores is changing, too – they are becoming multichannel hubs with welcome desks at their entrance to replace the customer service desks with additional tasks including welcoming and greeting customers, and click and collect points for Waitrose and John Lewis orders. All stores will eventually be equipped with the new desks and tablets to help partners explain products to customers, place orders for entertaining and celebration cakes and process meals and snack orders at in store grazing bars. To date, over 4,000 devices have been issued to partners in branches with 100 of the 308 stores refitted with the new click and collect desks.
Two stores have been equipped with large tablet screens in a wine concept area enabling partners to help customers to choose wine from the 1,500 skus available for home delivery via the waitrosedirect.com site and further technology is being trialled at the new Swindon store. Customers can use an interactive kiosk to find out more about wines or recipes and a screen in the cafe area is streaming Waitrose TV.
Having tech savvy customers with the latest technology is a challenge in store since Waitrose needs to ensure its partners are similarly well equipped. “We’ll be investing this year,” says Phillips. “We are increasingly looking at how phones and tablets can be used by our partners. The retailer will be innovating further with tablets to make stores into destinations in the way that it is doing with its 2 wine concept stores. “We’re wanting to trial lots of technology and see what works for us,” he explains.
ON A ROLL
Along with growth has come the need to increase capacity. The company has doubled capacity for online grocery and “we’ve pretty much filled that up,” explains Phillips. What started out as 200-300 orders a week being fulfilled in each branch has now reached a norm of 1,000. On top of this is the huge growth in the number of John Lewis orders being collected at Waitrose stores. In the past financial year, 57% of the department store’s Click and Collect orders – a total of 2.5 million – were collected at Waitrose.
The time has come to look at maximising space in terms of collecting online groceries, explains Phillips. A Milton Keynes store has its own ecommerce hub for e-fulfilment where partners can assemble orders once they’ve been picked in store. “It may mean becoming a 24-hour business, picking through the night or early morning during busy times” he says. In store space could also be used differently as branches become 24-hour places of work.
In the meantime, a second dotcom store is opening in Coulsdon in September, to handle the increase in orders in London. It has also announced plans to open a national distribution centre (NDC) in summer 2015, to “enable more sustainable growth” and handle the distribution of the around 25,000 nationally available grocery and home department lines that can be found in Waitrose branches and on Waitrose.com. The NDC will deliver the national lines via Waitrose’s four regional distribution centres to simplify the supply chain and improve efficiency of handling nationally available lines that have historically had to be sent between RDCs.
There is also more development to come in terms of grocery collection, such as drive- through (which is being trialled at five stores) and collection lockers. “We’re experimenting with collection from store as well as with collection lockers, such as the trial with Transport for London (TfL) at which lockers will be placed at stations at the ends of the lines,” explains Phillips. “The rise of collection will be interesting for grocery,” he adds, whether it’s through delivery from its own branches, John Lewis stores, Waitrose convenience stores or third party sites such as the pilots being run with TfL, which starts in the second half of 2014.
“We’re looking at other locations.” says Phillips including other transport hubs, convenience stores and John Lewis stores, but these are still in their trial phase. A bank of lockers is currently being tested for grocery collection by staff at its Bracknell headquarters. The lockers, supplied by ByBox, include a touch screen on which the customer enters the PIN they were given when they checked out online. This enables them to open freezer and refrigerated compartments as well as the specific ambient temperature locker containing the rest of their grocery order.
In future, lockers will include all three different temperature areas so customers only have access to their own order. At present, Waitrose staff can order groceries for delivery to the lockers in the same way as completing any other order online. The lockers have the same cut-off times as other online orders and shoppers have a half-day window for collection.
According to Phillips trials will “probably” continue until the end of the year since “we have to make sure that it works really well”. He points out that as well as the challenges of making sure that they get the service right and that it works properly for customers, retailers also have to take into account that customers expect to access all services at all locations.
NEXT STEPS
Seamless integration is the next step for Waitrose in its “simple, smart and seamless” plans, explains Phillips. It will also be looking at how it brings all of the improvements to the different channels together. “Mobile and collection are the multichannel glue that hold them together,” he says.
“It’s about apps in the future,” he adds and what the retailer does with stores and the role of collection to bring that together. From pre- shop through to payment and then fulfilling the order, it’s all about having the right picking devices (such as ones that will work in walk-in chiller areas in the new dotcom store), more efficient vans – which are being rolled out – and making the doorstep experience better so drivers can resolve issues on the doorstep rather than the customer having to phone customer services. “We’re looking at points of friction and taking those away.”
There are also supply chain efficiencies and shelf replenishment issues to be overcome as online continues to grow: Waitrose needs to make sure that there is enough produce in each shop both for online orders and the customers who shop in store. Availability alters throughout the day, so it needs to increase the accuracy of it data about what’s ordered and what’s delivered. “That’s just as important as the online experience,” comments Phillips.
With customers’ love for the brand being reflected in the phenomenal growth in its online service and the company’s digital roadmap drawing on the strengths of the brands’ messaging and partners, it will be interesting to see how Waitrose integrates the channels and pushes forward to innovate.
Online, it’s the new wine site, launched on a new version of the WebSphere platform, that will give a clue to how Waitrose.com can evolve when it brings together its triumvirate of strengths: its partners, its investment in technology and the high expectations of its customers. Integrating content such as videos and Waitrose TV, with inspiration and commerce “is really what we need to be doing as a brand online to give a really fantastic Waitrose brand experience,” concludes Phillips.
