Ocado is enhancing its same-day delivery service amidst growing pressures for operational improvement.
- The expansion aims to increase the available delivery slots for customers across the UK.
- Ocado plans to focus on encouraging customers to place larger orders for same-day delivery.
- The initiative is part of a strategic move to find a viable operating model, amidst industry scepticism.
- Insiders suggest this move may affect local convenience stores as Ocado aims for larger orders.
Ocado is poised to enhance its same-day delivery offerings as it grapples with mounting pressure from part-owner M&S to demonstrate a successful turnaround. Currently, most locations throughout the UK offer same-day delivery, albeit on a limited scale of a few thousand slots each week.
With the expansion, Ocado aims to increase these same-day delivery slots significantly, specifically urging customers to place larger order volumes. This strategic adjustment seeks to encourage the purchase of bigger baskets rather than relying solely on the spontaneous procurement of last-minute ingredients, often serviced by existing delivery applications.
This operational shift aligns with the objectives set by Hannah Gibson, who assumed leadership of Ocado Retail last September, focusing on redefining the business’s core strategies. Her approach underscores the potential for enhancement in the same-day delivery segment, considering the current competitive landscape.
However, as reported by a source within M&S to the Telegraph, the financial viability of rapid deliveries remains a contentious topic. A parallel to Deliveroo’s decade-long struggle for profitability is highlighted, insinuating a need for either premium pricing or an increase in order sizes to establish a feasible business model.
Andy Adcock, an experienced retail executive and former M&S food director, mentions that Ocado’s expansion into same-day deliveries might impact local convenience retailers. Despite this, he expresses confidence that M&S food halls will remain unaffected, given their customers’ existing preference for same-day shopping.
Ocado’s strategic move to enhance same-day delivery reflects a determined effort to adapt to market demands and improve operational outcomes.
