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Online grocery chiefs call for suppliers to up their game

Published:  18 October, 2012

Suppliers must be "on the front foot and proactive" in developing online strategies and adopting new technology in order to survive, according to the four major online UK grocers.

Suppliers must be "on the front foot and proactive" in developing online strategies and adopting new technology in order to survive, according to the four major online UK grocers.


Speaking together for the first time at IGD's Trading in a Digital World conference, online chiefs from Tesco, Asda, Sainsbury's and Ocado all emphasised the importance of optimising trading strategies online.


The digital channel will "change the game for many suppliers", according to Jon Rudoe, director of online at Sainbsury's, who believes a "very small minority of suppliers have got online right". "The best suppliers are the ones on the front foot and thinking proactively about growth in the [digital] channel and what they can do," he said. "What they all have in common is an online understanding and thirst to improve."


"Easy to use apps" are the future of online shopping and should be utilised better by suppliers, Kieran Shanahan, home shopping director at Asda told the audience. "Apps make customers' lives even easier, and it also means suppliers can engage with our customers at the shelf," he said.

Mobile phone app usage will "grow and grow," added Shanahan, "so long as the app is relevant to what the consumer wants". John Gillan, industry retail leader at Google, revealed that mobile phone usage is expected to accelerate dramatically in the next eight years, with 5 billion mobile users in 2012 increasing to 10 billion by 2020.

'Click and collect' was hailed as the next big thing for online trading. "There's still a lot of growth to come from it," Shanahan said. "In time I can see collection being as big as delivery for all of e-commerce, not just grocery." By Christmas, Asda will have 100 in-store grocery collection points, he revealed, and it is also trialling collection points away from store locations.

As suppliers develop and embrace new digital technology, it's important to "think about what's useful for customers and do that", rather than using "technology for technology's sake", Rudoe advised. For Shanahan, technology that personalises online shopping for consumers is developing fast and enables retailers to be "brought closer to its customers".

Ocado saw a 50% uplift in average basket spend online by offering personalised recommendations to shoppers based on their shopper history, according to Lawrence Hene, director of marketing and grocery retail at Ocado. For Hene, "successfully driving sales online involves using all the assets available" to suppliers. These include having a website that doesn't just "engage, educate, and inspire" but also drives transactions; working with third party social media sites that "build engagement"; taking advantage of Facebook offers; and "doing everything you can to make the most relevant items appear at the top of the page of retailers' sites".

Andrew Miles, grocery online marketing director at Tesco, urged suppliers to have "TescoDotCom on your agenda" and "think about all the stuff we can do together online that's hard in shops". The online arena enables suppliers to "experiment with ideas quickly and evaluate quickly - we can test and learn." "Be bold with your thoughts and ideas," he said.

Miles added that the development of digital technology "empowers customers to take control" of their busy lifestyles and Tesco has big plans to make online grocery shopping "more and more mainstream".

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