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Morrisons outlines online strategy

Morrisons outlines online strategy
Friday November 22 2013

Supermarket e-commerce latecomer plans phased roll out of grocery delivery service throughout next year, focusing on its fresh food proposition

Morrisons today outlined plans to roll out an online shopping service in the UK using a phased approach that will see online grocery deliveries to customers in Warwickshire commence on 10 January.

The fourth largest UK supermarket is the last of the major grocery multiples to offer online fresh food shopping, having made its first foray into e-commerce with the launch of a specialist wine website, Morrisons Cellar, earlier this year. 

As part of a phased roll out, it said it was looking to extend its fresh food deliveries to London by next summer and to 50% of UK homes by the end of 2014.

Clear fresh food proposition

Announcing its plans as part of it third quarter interim trading statement, Morrisons stated that it now had a clear, online fresh food proposition in place, while the ranging and marketing plan has been finalised and the technology platform and integration were nearing completion, following its acquisition of Kiddicare and its e-commerce platform. 

Dalton Philips, Morrisons chief executive, said: “We continue to grow our sales in this tough market while making great progress on our strategy to be a multichannel retailer. I said at the outset that our online offer would be unmistakably Morrisons and I’m very confident that the service we unveil in January will live up to that promise.”

Online food deliveries will commence from the Dordon customer fulfilment centre (CFC) followed by an extension to Yorkshire shortly thereafter, using a delivery spoke in Leeds. And the service will seek to differentiate itself with a ‘virtual butcher’ service and an ‘expert review’ feature to emphasise a strong focus on fresh food. 

Turning an e-commerce profit

Morrisons added that the service would have low substitution rates as a result of its distribution tie-up with Ocado, which will eliminate the need to pick from its stores. And a ‘doorstop check’ feature will allow customers to request a refund or replacement of individual items, while the online offering will also provide for multi-device shopping and one-hour delivery slots with fees ranging from £1 to £5. But it did not say if its e-commerce plans would also include its new Nutmeg childrensware brand.

Planet Retail said today’s plans showed that Morrisons is making progress on its much-awaited online grocery roll out. However, the retail analyst continued to question whether it can actually deliver profits with the operation, especially considering major rivals – some with far more e-commerce expertise and experience – still struggle to generate meaningful profits. 

“We are also concerned that as an unintended consequence Morrisons may, in fact, simply shift existing core customers towards a less profitable channel – which will have a detrimental impact on revenue and profit,” added the analyst today in an online bulletin.

Tagged as: Morrisons | grocery | web | online | e-commerce | delivery | wine | Nutmeg | Kiddicare | Ocado | Planet Retail