Ocado is intensifying its same-day delivery services amid pressure from stakeholders to showcase a turnaround strategy.
- The online grocer plans to increase same-day delivery slots, moving beyond limited availability.
- Focus will shift toward persuading consumers to place larger orders for same-day delivery.
- Stakeholders like M&S are keenly observing the economic viability of this strategy.
- Adjusting the operational model remains crucial as Ocado strives to navigate this competitive landscape.
In a strategic move to boost efficiency, Ocado aims to expand its same-day delivery offerings significantly. The company is responding to external pressures, notably from part-owner M&S, to demonstrate tangible improvement in its operation.
Currently, Ocado facilitates same-day delivery across numerous UK locations, yet the availability is confined to a few thousand slots weekly. This expansion will potentially allow for more consumer access and convenience, addressing the limitations of the present system.
Ocado’s strategy is to encourage customers to consider larger order sizes for same-day slots rather than using the service for last-minute purchasing, a niche typically dominated by delivery apps.
Hannah Gibson, who assumed leadership of Ocado Retail in September, is spearheading this turnaround project. She identifies the same-day delivery service as a key growth area.
M&S insiders have expressed caution regarding the economic underpinnings of rapid delivery models, referencing companies like Deliveroo that have yet to achieve profitability. A pivotal consideration is whether success will stem from premium pricing or larger order dynamics, rather than merely capturing market share.
Andy Adcock, a respected figure and former M&S food managing director, weighed in, suggesting that while Ocado might impact local convenience stores, M&S food halls should remain unaffected due to their established customer base preferring same-day shopping.
Ocado’s expansion of same-day delivery options is a strategic component of its ongoing operational reset, observed closely by stakeholders.
