Online grocery giant Ocado is gearing up to enhance its same-day delivery options in response to mounting expectations, including those from its part-owner M&S, for a turnaround in performance.
While Ocado does currently offer same-day delivery in various locations across the UK, the availability of these slots is currently limited to just a few thousand each week.
The focus of this expansion is expected to revolve around encouraging customers to place larger orders for same-day delivery, rather than just catering to last-minute ingredient needs often associated with delivery apps.
Hannah Gibson, who assumed leadership of Ocado Retail in September last year, has been entrusted with revitalizing the company’s fortunes. She is reportedly eyeing same-day delivery as a key avenue for improvements, drawing on her pivotal role in developing Ocado-owned rapid delivery app Zoom.
However, M&S insiders are treading cautiously, given the historically challenging economics of rapid delivery models. Notably, Deliveroo, a prominent player in the sector, has struggled to achieve profitability over the past decade.
According to sources within M&S, succeeding in the same-day delivery arena hinges on either offering products at premium prices or encouraging customers to place larger orders. The underlying challenge lies not just in capturing market share but also in crafting a viable operating model.
Andy Adcock, a seasoned retail expert and former food managing director at M&S, has noted that Ocado’s pivot to emphasize same-day delivery could potentially impact local convenience stores. Yet, he remains optimistic that M&S’s dedicated customer base, known for its affinity for same-day shopping, will likely weather this shift.
As the landscape of grocery delivery continues to evolve, Ocado’s move to bolster its same-day services could usher in significant changes to consumer behavior and industry dynamics.