28 Dec

Posted by Roger Martin

Well we just had a double helping of snow in the UK, and with it being the lead in to Christmas it coincided with a particularly busy time in the ecommerce world.

I thought it would be interesting to see what impact this had on traditional supermarkets with ecommerce retail operations, and in particular Sainsbury’s and Waitrose (Ocado).

The marketing that these brands performed via email in the lead up to the Christmas period was based around pre-ordering and guaranteeing your delivery slot for the week prior to Christmas. I would imagine from an operational standpoint that this would enable them to do the following;

  • Inject extra cash into the business
  • Pre-plan deliveries and staffing
  • Ensure stock availability and shelf life

Seems I was wrong.

It would appear that even though the stores have taken these pre-orders they haven’t actually accounted for any of them in terms of stock. So as an example an order is placed in the last week of November for delivery on the 23rd December. You would imagine that the EPOS systems would then kick in to ensure that the relevant stocks are ring fenced at the store level to fulfill the online deliveries?

Well it doesn’t look like that is happening. It seems as if the orders are printed out on the day before/or day of delivery and people are sent through the store to pick the relevant items from the shelves. By the time the orders from both stores were ready for despatch the following problems manifest themsleves, (bear in mind its the 23rd December);

  • Out of stocks, so substitution products are added, but in both cases in large numbers, and not always acceptable alternatives
  • Short shelf life, so in the case of party food, expiry dates on the next day (24th December)
  • Inability to guarantee delivery slots due to weather problems

So the first two problems are operational, and the stores should look to their internal procedures to understand how to deal with these. In the case of Ocado they blamed it on an inability to get fresh stock delivered. But from an online marketing perspective they have failed. They should have informed the customer by email pre-delivery so that they could make alternative arrangements.

The last point is outside of the stores control, but again they need to have procedures in place to deal with this where delivery is critical. Sainsbury’s made an effort to deal with an inability to deliver by phoning their customers telling them to go to the store and pick their order up! Now hang on, its too dangerous for them to deliver, but the stores stay open, and its OK for the customer to go to the store!

OK, so there is an option for the intrepid customers with 4 wheel drive to venture out and pick up their order. So here is the typical scenario, store calls customer, “Sorry your order can’t be delivered because of the snow, would you like to pick it up? We can have it ready for you and our drivers will be here to load it into your car. You won’t of course be charged delivery.” Customer, “Ohh, I rally need that shop, OK I’ll come over and get it at 4.30pm, is that OK?” Store, “Sure, it’ll be waiting for you.”

Now bear in mind that the customer ordered an online delivery, in some cases weeks ago to guarantee their ‘premium’ pre-Christmas delivery slot, and now they’ve got to venture out in the snow, with their to-store journey time taking at least twice as long. Now they get to the store. “Hi, I’m here to pick up my order.” Store assistant, “Sure, it will take 10-15 minutes, I’ll let them know you’re here.” 10-15 minutes. Hang on, the customer told them what time they were coming, why does it take so long to bring a pre-picked order out? Uh-oh. Pissed off customer time.

In fairness, the staff were charming, but the store management need to take learning from this. If the problem occurs in the future they need to work with operations and marketing to find a better way of dealing with it. There was no financial compensation other than a delivery refund, and in our particular order we got it home only to find half a dozen items missing. OK they refunded them, but guess what. We had to go back to the store to get them! In the damn snow! (After a lengthy phone call to Ocado, no doubt there were hundreds waiting to get through, we were given a £15 compensation refund for the short life items – thank you for that)

Sorry but to Ocado and Sainsbury’s from a customer facing marketing perspective, this Christmas YOU FAILED. Take some learning and do better next time. With all the technology and millions you’ve invested in your online operations you are way behind.  You need to join some of the systems together so that they integrate properly, and where you devolve to local store management there needs to be checks and balances so that pre-ordered items don’t go out of stock or get delivered with ridiculously short shelf lives. The customer is King online, and it doesn’t take long to lose them to a competitor waving juicy free delivery vouchers in their faces – loyalty is massively important for supermarkets online, and they need to do more when things go wrong.

AND to make things worse, after treating your customers so badly, you didn’t send them an email apology with a voucher, but on Christmas day, yes Christmas day, you started emailing us with your Boxing Day Sales Promos. Come on guys….

As a postscript I also noted how the Graze business was overly affected by the post office in the lead up to Christmas. For our office, where three people use Graze twice a week on average they found that by the end of the first week in December, the weather was fine, their boxes had started to be delayed by up to a week. Graze were brilliant, they refunded when the boxes didn’t appear and they changed from perishable to longer lasting ingredients, but overall they must be questioning their commitment to Royal mail as a reliable partner. As a company that specializes in delivering fresh food to the customer when they want it, the whole experience has been a big own goal, through no fault of their own, Graze have probably lost a whole load of customers who until that point were brand advocates.

It just goes to show how important it is to get the right delivery partnership in place at part of your operational strategy, and more importantly to have a fall back strategy when things go wrong. The guys at our office have cancelled some boxes and put everything else on hold. I fear they may cancel their subscriptions in the new year… And I don’t think they blame Royal Mail, they just want their stuff, when they want it. The brutality of online business eh?

As ecommerce matures as a channel it follows that businesses need to do more to retain loyalty. One of the first things to cause switching in a price comparative environment such as that which the supermarkets operate in is failure to deliver the goods. So when this happens they need to go to extraordinary lengths to ensure that the customer experience is maintained. That the trust in their brand isn’t damaged. Otherwise they’ll end up like Tesco’s – hated. And strategically they need differentiators to survive against a behemoth like that. So customer service is key, more so online than in the actual store.

Looking forward to seeing what happens next year, or will it all be forgotten once the party’s over and the snow has thawed?

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