Ocado, the runaway success story of online grocery retail, is to open its first physical store later this year.
Interviewed on stage at last week’s eDelivery Expo (EDX16), by eDelivery editor Sean Fleming, Richard Locke, Ocado’s head of general merchandising, answered a series of questions relating to the retailer’s decision to branch out into non-food sales.
Hot on the heels of its grocery success, Ocado has introduced sub-brands, Fetch (selling pet food and related items) and Sizzle (selling cookware). By combining deliveries from Fetch and/or Sizzle with their regular Ocado order, customers avoid secondary delivery charges and Ocado gets a greater share of customer spend.
As with Sainsbury’s Argos-related ambitions – and Amazon’s entire raison d’être – the desire to be a one-stop shop for customers is clearly still a burning ambition. Are we witnessing the end of specialisation? Probably not, but consolidation is likely to be an increasingly present theme in the multichannel space over the next 12-24 months. Consolidating from a position of strength is always preferable.
The next non-food move from Ocado sees it moving into the higher-end beauty products sector, dominated by risk averse brands reluctant to see their goods over distributed or associated by anything other than an upscale retail experience.
Ocado is partnering with Marie Claire magazine, to lend credence to its newest category offer. As part of which, it will be opening a store later this year, possibly as early as late summer. Locke told the EDX16 audience that the store was a condition for being able to launch its beauty range. He also made it clear there are no plans whatsoever to launch any Ocado grocery stores.
On the doorstep, beauty products won’t be combined with regular groceries, Locke said, but will be handed to the customer with a sense of occasion, possibly with ribbon and luxuriant packaging.
Ocado is also experimenting with click-and-collect outlets on the Transport for London underground network, although Locke expressed the view that expecting customers to go out of their way to collect purchases was not a true convenience offer. “Click-and-collect is solving the problem of delivering to someone when they’re not in – the real solution is to deliver where they are, when they are,” he said.
Using London Underground stations was, he said, following the routes customers already take, not asking them to go out of their way. “Instead of going out of their way to pick up their shopping can we waylay them on their way home?”