Scanning the national newspapers this morning you might be forgiven for coming to the conclusion that today was the proverbial slow news day.
Admittedly, I wasn’t really that interested in anything other than the reports of how Ireland tonked the Aussies – but I was surprised to see quite a bit of coverage of a report apparently slamming Morrisons for not having an online operation.
The report by Head London and Oxford Economics highlighted retailers that have failed to fully integrate their store and online operations, pointing out the amount of lost sales those businesses have subsequently missed out on.
Morrisons was branded the biggest ‘loser’, missing out on £314m in sales over the past four years – or £78.5m a year. How they reached that number is too complex to go into here. But even the headline lacks wow factor. Morrisons, remember, turned over £16.5bn in its last financial year.
Those potential lost sales are hardly likely to be keeping Dalton Philips awake at night – especially as he has now set the ball rolling in terms of catching up with its rivals in the online channel.
Morrisons.com is set to launch next year using the Kiddicare platform to sell non-food, with groceries likely to follow the following year. And earlier this month former Apple marketer Simon Thompson came on board to head up the online grocery push.
Looking at the online performance of rivals to date, Morrisons is confident its ‘second mover’ advantage (or, more accurately, fourth) will pay dividends before long.
Speaking of rivals, Ocado today had to issue a warning over margins despite a 16.9% improvement in gross sales for the 12 weeks to 7 August. Once again the retailer was hit by capacity constraints at its Hatfield distribution centre, while investments in improving customer service will also hit its bottom line.
Even the most sophisticated online specialists are still struggling to fully get to grips with the channel. So perhaps Morrisons’ hesitancy in becoming a multi-channel retailer – and trying to learn as much as possible about how it might actually work out – is a shrewd move rather than a missed opportunity.