The Co-operative Group is the latest retailer to join a new wave of supermarkets joining the online revolution.
Head of retail Steve Murrells told The Grocer that as part of the society’s new strategy to turn around the fortunes of its food business, trials would be under way by the end of the year to explore the best format. The move follows Morrisons’ tie-up with Ocado that will see it start selling groceries online from January, and Iceland’s resumption of online delivery in April.
Murrells said the society was mulling over options including: a version of internet grocery shopping tailored for the convenience market that “is quite unique and exciting”; click & collect; and home delivery.
“By the end of the year we’ll be into trials,” he said. “We’re effectively trialling four models. We’ll probably start two before Christmas and two after Christmas. But it is certainly one of those capital projects that will get a lot of support because there is an acceptance we need to be in that space now. We’ve put it right to the top.”
“We’ve woken up to the fact that one size does not fit all and you need to be multichannel and multi-format”
Steve Murrells, Co-op
He added that there were only two channels in grocery that were in growth - convenience - in which The Co-op was “very confident” - and online. “We’ve woken up to the fact that one size does not fit all and you need to be multichannel and multi-format if you want to be in tune with the challenging lives people have,” Murrells said. “Technology is coming to the Co-op, and I think it couldn’t come quickly enough.”
Murrells admitted that the Co-op had “taken its time” to go online, but said this had given it the opportunity to learn from its rivals. “This might be the only area where it’s good to be a bit late to the party,” he said. “If you are one of the big four, you’re finding online is duplicating your bricks and mortar service - it’s eroded your profitability. That’s why we are searching for models that will grow our sales and benefit our profitability.”
The Co-op already has a home delivery service, used by 20,000 customers a week, where customers can have their shopping delivered to their home if they have spent over £25 in-store. Murrells said this service was one of the society’s “best kept secrets” and that was why the Co-op was reviewing it.
Murrells said he couldn’t predict which online format would be launched. But he added: “What I can predict is that we will clearly be in that space. When you’ve got a market share of 6.5% there is everything to go for and this could well get us moving in the right direction again because we haven’t really understood or got involved in it.”
Will they, won’t they?
In October 2011, Helen Bridgett, the Co-op’s then head of strategy, insight and planning told the IGD’s Online Grocery Retailing conference the society was planning to launch an online grocery service “within the next year” with mobile set to play a key role.
A launch was “within reach” Bridgett told delegates.
But less then a year later, in September 2012, there was a backtrack, when the then group CEO Peter Marks told reporters: “We are not going into online grocery right now. We are investing in technology to improve efficiency but not online. Never say never, but it is not a priority for us. We see online hitting the big hypermarkets.”