What are the big four grocers doing in eCommerce?

The major UK grocers as well as brands from multiple food and non-food categories are at retail research group IGD's Online and Digital Summit in October, giving the retailers an opportunity to update suppliers on their latest eCommerce initiatives.

Tesco and Unilever's stand-off, which for around 24 hours that week saw the retailer block the sale of the supplier's goods online due to a reported disagreement around cost of supply, was not referenced on stage; instead, the spotlight very much fell on future plans, digital innovation and updates on recent investments in this field.

Tesco's managing director for online, Adrian Letts, gave a broad view of the supermarket's digital strategy as opposed to delving into any specific detail about new ventures or specific partner relationships, but he did hint that its fast fulfilment will not end with a same-day click & collect service. "Watch this space," he said when talking about the potential of express food delivery options in the future.

He suggested that Tesco's move to talk less specifically about its online development under CEO Dave Lewis, compared to previous management regimes, is a sign the company is "growing up" whereby the organisation is thinking as one business not an array of different divisions.

Asda and Morrisons' online teams were arguably more open about their eCommerce strategies, with Tom Lloyd, senior manager for development and analytics at the former, offering a deep dive into Asda's partnership with parent company Walmart and relationships with third-party vendors.

Asda taps into Walmart innovation pool

In the US, Walmart Labs has been working with digital advertising company, Triad Retail Media, to link customer accounts on Walmart.com with a Google Double Click cookie allowing the retailer to understand the general online behaviours of their shoppers and offer targeted advertising across the internet to suppliers as a result.

"We saw an opportunity to bring this to the UK market as something really different and a differentiator for Asda," Lloyd explained, adding: "We defined a placement strategy and defined the placements we'd be targeting and the creative approach.

"We worked with the eCommerce partners we have in the UK to deliver those placements on the site, to unlock the tagging and analytics we needed in order to match customer accounts to cookies and we're now able to match over one million customer accounts to a Double Click cookie."

Asda suppliers can now target ads they are buying programmatically through a wide range of retail sites – based on an Asda customer's transactional data history and browser behaviour.

"As we know, previous purchase history is probably the best indicator for future purchasing intent for groceries," Lloyd remarked.

Aside from the innovation and tech support leveraged from being part of the Walmart family, Lloyd referenced five key eCommerce partners his team works alongside to optimise its online operation: Dynatrace for website performance; Oracle business intelligence for sales and commercial information; Simple Usability for eye-tracking studies; OpinionLab for web customer feedback; Adobe for web analytics; and – most recently – Decibel Insight for session replay.

He revealed that Decibel Insight has "allowed us to learn some things we wouldn't have learnt otherwise" around the online checkout flow. Asda noticed there were a number of customers who were abandoning their shopping at the order summary page before coming back to the site, and it turned out they were adding products they had forgotten and not using the designated "Before you go" page.

Lloyd noted: "These customers were showing us that what that page was trying to do it wasn't yet doing. We needed to make a couple of tweaks and save some customers some time."

"What we like about [Decibel Insight] is they are young, they are hungry, they've only been in business for a couple of years and their code has been developed in a way that is really modern and works really closely with our front end and also they are able to act quickly and be really agile with their changes."

Grand plans for Morrisons.com

Morrisons.com has only recently marked its second anniversary since the launch of its eCommerce platform using Ocado's technology and fulfilment facilities in 2014. This partnership is set to extend further with Morrisons agreeing to utlise Ocado's Erith customer fulfilment centre, in south-east London, when it opens in 2017.

Head of online trading at Morrisons, Chris Conway, who joined the business at the end of 2015, spoke of encouraging results in what for the Yorkshire-based retailer is relatively early days for selling good online. He revealed the online operation is now a £300 million annual revenue generator, and as the organisation progresses the focus is strongly on "profitable growth".

"We're certainly on track to build that profitability," he said, detailing how the commercial, technological and fulfilment partnership with Ocado will allow Morrisons.com to extend its geographical reach from the 56/57% of the UK it serves today to more of the market in southern England and then, eventually, in the north-east and Scotland. Select ranges from Ocado's non-food will also soon be made available on Morrisons' eCommerce platform as it looks to grow its general merchandise while at the same time increasing the profile and distribution of its own-brand Nutmeg clothing range online.

In recent times, Morrisons has built partnerships with Amazon and Doddle that have given consumers opportunities to pick up online orders in store, via lockers and specified collection areas respectively. However, as part of the company's approach to emphasise its unique strengths and traditions, for the first time in 2016 shoppers will be able to reserve their Christmas food online ahead of store collection just before 25 December.

Such a move will inevitably allow Morrisons to learn more about click & collect, which is an increasingly popular fulfilment method in the wider grocery industry.

Conway detailed how the supermarket chain has now centralised its eCommerce teams, bringing them all under one roof in its Bradford headquarters – and, although heavily reliant on Ocado's platform, there are various examples of the internal team developing unique user experiences at the online checkout.

"We've made massive strides in making sure we partner with people internally," he said, adding that members of the online marketing and online insights teams have been embedded in their respective company-wide departments to positive effect.

Apps, pick-up points and big integration at Sainsbury's

The last of the big four grocers to speak on the first day of the summit was Sainsbury's. Anja Madsen – head of online operations at the supermarket – took the opportunity to highlight the impact of some of the grocer's new mobile apps.

A general shopping app was launched in May and is now apparently used by 5% of the retailer's customers, but this is expected to grow considerably as more marketing around the technology is rolled out. One-hour delivery app, Chop Chop, is available to customers in certain south London postcodes, as the supermarket looks to ensure it offers options for all customers, while this year also saw the launch of a mobile app for Tu clothing.

"We are the first of the big four to have a clothing app," Madsen commented.

"Clearly online is a key growth driver for clothing – some of the things that perform best are childrenswear and schoolwear. For those of you who are parents, who would want to go out with your kids shopping for schoolwear?!"

She added: "Online is perfect. It allows us to showcase some of our premium Gok [Wan]-edited ranges. If you think Sainsbury's clothing is fuddy duddy, go online, check us out, there is some cool stuff."

Referencing the online changes brought about by Sainsbury's recent acquisition of Home Retail Group, Madsen said this is already evidenced through the sharing of fulfilment and collection point networks around the UK, adding that shopping on Argos and Habitat has now been made available on the Sainsbury's homepage and vice versa.

"We're trying to combine the front-end as a first quick win," she remarked.

IGD used its event to release its ShopperVista research looking at Online Shopping Trends 2016, which suggested that 28% of British grocery shoppers claim to be shopping online – up from 20% six years ago. The study also predicted the online grocery channel is set to double over the next few years and called on industry players to develop a channel management strategy to ensure they capture this forecasted growth.

Vanessa Henry, the report author and Shopper Insight Manager at IGD, warned those involved in UK grocery: "With this channel set to double over the next four years, you can't afford to miss out on this growth."

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