The Co-operative Group is planning to launch an online grocery service within the next year.
Details are currently being fleshed out but the launch was “within reach”, said Helen Bridgett, The Cop’s head of strategy, insight and planning.
Speaking at the IGD Online Grocery Retailing conference this week, she hinted that mobiles would play a key role in the offer. Describing desktops as online grocery superstores and phones as online c-stores, she said the growth of smartphone use “brings huge opportunities”.
The offer is also likely to make use of the infrastructure already in place for the society’s free home delivery service for customers who spend over £25 in-store. The home delivery service currently operates from 350 stores and has 400 vans.
The main barrier to setting up an online convenience model was likely to be the cost-efficiency of delivering small baskets. However, having a network of local shops making short deliveries would make a convenience offer more competitive, she said.
It would be a smart move for the Co-op to launch an online service, said e-commerce experts. “If it didn’t go online it would be at a competitive disadvantage compared with other retailers,” said e-business analyst Martin Gill from Forrester Research. “It’s not as if it’s starting from scratch logistics and distribution make up the lion’s share of set-up costs and it has a lot of that taken care of already thanks to home delivery.”
But supply chain consultancy Sequoia said there could be downsides to such a model. “Local deliveries may reduce driving distances, but covering a small area would also reduce the number of orders, which could harm delivery efficiency unless they plan to offer wide delivery slots or leave goods on the doorstep,” said technical director David Bosomworth.
“However, the Co-op Group is well placed to offer click and collect: by picking customers’ orders at a central depot, they could combine the SKU range of an out-of-town store with the convenience of a local store pickup.”