Ocado Zoom impulse orders are “more snacks, and more beer”

Ocado Zoom is seeking to readjust consumer attitudes to online shopping, with its ultrafast delivery of the retailer's ranges.

“We want to be a regular part of people's week and how they buy their groceries,” head of Ocado Zoom, George Dean, told the audience of the Digital Food and Beverage 2020 conference in London today (11 February).

Ocado Zoom is part of the wider Ocado brand which is undergoing considerable change in the UK. Last year, M&S and Ocado announced the creation of a new 50/50 joint venture (JV), which will see M&S acquire half of Ocado’s UK retail business and start selling its products via Ocado.com from September 2020.

Ocado Zoom's first distribution centre, in Acton, is now delivering more than 3,000 orders per week to customers in West London, said Dean, with eight new distribution centres planned over the next five years.

Dean said Zoom's proposition – 'The best of Ocado in less than 60 minutes' – has seen shoppers use it in an entirely different way to traditional online supermarket delivery services.

The brand has a high concentration of shoppers aged under 35, who find it fits in better with their lifestyles. Dean said that the quick delivery times – the quickest order on record is eight minutes and the average is 33 minutes – coupled with low delivery charges that are typically between £2 and £3, make Zoom more accessible.

For a demographic that may live in flatshares or work long hours, more traditional pre-planned home deliveries of groceries simply don't work, said Dean. Zoom “is a different way to get people's regular shopping to them”.

The venture has also thrown up a range of consumer insights, said Dean. Customers ordering a full weekly shop for delivery at a later date invariably plan to be very healthy, while those ordering on impulse order more single-serve products, more snacks, and more beer, he said.

Ocado claims it is now the fastest-growing grocery retailer in the UK, after posting its results for the 52 weeks to 1 December 2019 earlier today.

The retailer reported growth in its retail revenue of 10.3% over the period, to £1,617.5 million. Group EBITDA was £43.4 million – a figure impacted by a fire at the retailer's Andover distribution centre, which restricted its trading.

Ocado's overall loss before tax was £214.5 million, which compares to a loss of £44.4 million in 2018. It has boosted its funding position to £751 million to allow further investment for growth.