So what are the possible options (well at least the ones I can think of!)?
Option 1 - Ocado
deliver for Morrisons – Instantly gives national logistical coverage, and
Morrisons trade on the good reputation of Ocado’s service standards.
Option 2 –
Morrisons use Ocado hubs and employs their own drivers – again instant
coverage, without leveraging Ocado’s reputation.
Option 3 –
Morrisons plugs into Ocado’s technology – using an existing platform that works
could prevent teething problems.
Option 4 – A
combination of the above.
The first thing that is causing me confusion is the livery
on the vans themselves if any part of option 1 is used, are they going to say
Ocado? If so why would Morrisons want to have a competitor’s van delivering
their produce and causing confusion (and indeed add marketing value for Ocado)
for the shopper?
Now of course I can understand that the cost saving (Capex)
of using an existing fleet - even if that fleet would need a large expansion in
numbers to cope with the predicted volume increase. But for me, it seems like Morrisons are surely
just kicking the ball down the road on this one (unless of course they opt for
option 2). Now I am sure if asked they
would say that their core competence is supply chain not home deliveries, so
therefore aren’t they already pretty knowledgeable in logistics? It seems to me they are trying to enter the
market on the cheap, and although we know that Morrisons have said that they
only enter the online market if it was profitable almost immediately…is this
really the right option?
Now don’t get me wrong, I have never thought that Morrisons
should rush to enter the online market just because their competitors do it!
Unlike almost every other commentator! Market Share isn’t everything…turnover for vanity, profit for sanity. I
agree that any business unit (or channel in this case) should be profitable by
itself, but they have taken an awful long time to come to a decision, which in
reality doesn’t appear to be much of a commitment to online (I have been
critical of how slow they have been to embrace the convenience channel, but
more of that for another day!!).
There is also the problem with Waitrose (or Waitrose having
a problem with the tie-up to be precise), and how close to breaching the
Waitrose/ Ocado agreement does this come, if not in law, in principle. This can only end badly for some or all the
players.
I am a great advocate to organic growth in business, rather
than trying to run too early. Morrisons
have done some trialling on fresh in the Greater London area (Fresh being a
poor penetration category online currently this seems sensible), but there is a
significant difference between that and a full SKU level model nationwide.
For me I think I would have been more tempted to concentrate
on trialling to my shopper heartland (for us up’t north!) on a selected area
basis. These shoppers may be more
forgiving early on, and accept that there may be the odd hiccup along the way…..but
of course option 3 should prevent any of these issues…..I wait with baited
breath!Craig Bradley
