Morrisons has unveiled details of its long-awaited online launch, with plans to cover 50% of UK households by the end of next year.
The UK grocer will begin rolling out its online platform in Warwickshire, with deliveries scheduled to start on 10 January. The group will then cover West Yorkshire in February, London and South Yorkshire in “the middle” of next year and the North West by the end of fiscal 2014. At this point, Morrisons will offer an online ordering and home delivery service to around 13m homes, approximately half of the UK, the company said.
Go deeper with GlobalData
Briefing media on the retailer’s plans in London today (21 November), management emphaised that this rate of expansion represents a “real pace”.
“It has taken some of our rivals years to build up that level of coverage,” chief executive Dalton Philips stressed.
Philips added it was an achievable goal because Morrisons has been able to use the technical expertise developed by online grocer Ocado through its partnership with the firm. Collaborating with Ocado to develop the back-end infrastructure has helped to “minimise the execution risks”, he suggested.
While Morrisons is playing catch up with its UK rivals, with all of the country’s other major supermarkets offering a mature online proposition, Philips appeared confident the company can make up the lost ground. “There is a huge difference between late and too late. Yes we are late, but we are not too late. We have used that time wisely to learn from others. A decade of experience from Ocado, Fresh Direct and others. We have challenged ourselves to leverage this knowledge to create something that is different. A proposition that is worth the wait.”
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataMorrisons has looked to leverage its expertise in fresh food to boost the appeal of its fledgling online business. The group is offering a number of services it believes will reassure consumers over the quality of fresh produce ordered over the internet, including a door step check for fresh produce quality and “expert reviews” rating produce quality based on factors such as seasonality. The concept was one of the “key learnings” from Morrisons’ study of US online grocer Fresh Direct in New York and is central to building consumer trust in its own proposition, the company said.
Morrisons is also working to bring “market street to your street”, with a virtual meat department and fishmonger designed to mirror that of shopping in store. The consumer is given greater control over the cut of meat or fish product, while serving suggestions – and product placement, with suggested wines or sides – are provided. This, management insisted, is “uniquely Morrisons”.
In order to ensure freshness and quality, the company has also developed packaging specifically for its online business that is designed to maintain freshness, such as vacuumed sealed containers for meat.
“We have married the best technology that is out there with our leadership in fresh foods, from expert ratings, to ordering the meat you want in a specific way, to the doorstep check,” Philips emphasised.
Morrisons claimed its focus on freshness and quality represent a real point of difference from the other online propositions currently in the marketplace. Significantly, the group is also using Ocado technology to make it easier for people already signed up with an online grocer to switch.
“Getting people to transfer from one online shopping [system] to another can be a bit of a chore like changing your bank account,” Morrisons MD of online food Simon Thompson conceded. “We are bringing simple switching to the market.”
Unique to the platform used by Morrisons and Ocado is a function that allows consumers to import favourites on their shopping list stored on the databases of rival online grocers. Consumers can also create an account via Facebook, where personal data will be transferred over. Unlike many other UK grocers, the group will not offer price comparisons or a price guarantee.
Morrisons said it expects the new online business to contribute posively towards operating profitability by fiscal 2016.
“With the launch of online and what we are doing in convenience and the changes we are making in the core, by 2015 Morrisons will be a very different business. A multichannel, multi-format retailer competing on equal terms for the first time in a decade,” Philips suggested.
