Can any of you remember when supermarkets didn’t do home delivery? It may be tough to recall now, but there was a time not that long ago when those little Tesco/Sainsbury’s/Ocado vans didn’t spend their days speeding round full of crates and placky bags.
Tesco was lauded early on for being first out of the gates, but it was the arrival of Ocado in 2001, a separate company from Waitrose, that really shook the market up and has since been responsible for much of the innovation in the supermarket e-grocery sphere.
Waitrose may be the most expensive of the regular supermarkets, but, via Ocado, it managed to set itself apart with little things that, initially, the more discerning customers found endearing and a reason to shop online at Waitrose.
None of these were particularly revolutionary, but the fact that drivers carried your shopping all the way into your kitchen (and still continue to do) was something that customers talked about.
It has always operated a warehouse-run business, so you’ll rarely be offered a substitution – if the item is in stock when you order, you’ll get it.
And, while plastic bags are admittedly seen as environmentally bad, putting your items into different coloured bags depending on their type (fridge, store cupboard, etc) was also a very clever, if small differentiation point, not least because the bags were also biodegradable and recycled.
More recently Waitrose/Ocado has begun to itemise customers’ bills by ‘best before’ date, enabling you to arrange your shopping based on the likelihood of fresh produce going off. Again, small but significant, but an area where they’ve stolen a march on the likes of Tesco and Sainsbury’s.
And the killer offer recently has been to offer the same produce that Waitrose sells in-store cheaper online. Internet-only prices have even reached the supermarkets and it has helped Ocado to more than 25% y-o-y profits.
Now surely the new battleground is going to be mobile. And, of course, Ocado has got there way before the others. Last July it released an iPhone app, allowing you to do your online delivery from the comfort of the train/bus/office, without the need for your regular computer.
A full 7 months later and nothing similar has appeared from their competitors. Sure, Tesco has an app to help you find your local store and a loyalty card app, but that’s very different from the ability to be able to shop without going to the supermarket.
The fact that neither Tesco nor Sainsbury’s has managed to release something similar is a major flaw in their marketing.
Of course, the accusation could be levelled that iPhones are generally owned by the middle classes, who in turn are more susceptible to shopping at Waitrose. But that’s basically rot. Sainsbury’s is just as middle-class and Tesco has such a wide customer base that there will be just as many smartphone users who shop there as anywhere else.
Put simply, Ocado is clearly a forward-thinking company that values customer satisfaction and delights in offering things that they know will be appreciated and help them stay one step ahead.