More than 30 per cent of online grocery retailer Ocado’s checkouts now come via its mobile app on smartphones. When tablets are taken into the equation, the figure is 40 per cent, maybe even as high as 45 per cent, and rising. The figures were revealed last night by Ocado CEO, Tim Steiner, as he delivered the British Retail Consortium’s Annual Lecture.
During a Q&A session after the lecture, Steiner said he did not think the Click & Collect concept would ever take off for grocery shopping, and said Ocado would have no interest in ever offering such a service unless if could operate it at a lower cost than its home delivery service and pass some of the savings on to the customer, so offering an incentive for them to collect their groceries, rather than having them delivered.
Ocado operates its business, which currently involves fulfilling home deliveries for Waitrose.com, from two “dark stores” (aka warehouses), arguing that this is a much more efficient way to run a home delivery service than picking items from the shelves of a store.
Asked what impact it would have on Ocado’s business if Tesco attempted to copy its model, Steiner pointed to the development work that has gone into its eCommerce platform over the last 13 years, and told delegates: “If Tesco started tomorrow, it would still take them five years to get to where we are. We can individually pick 1.4m items a day at three times the speed you can in store. We have a lead, because we were early in this business. People thought we were mad, but 10 years ago, our competitors were either too conservative, or invested in the wrong assets.” 
Last week, Ocado signed a £216m, 25-year deal to run Morrisons’ home delivery service. As part of the deal, Morrisons is buying Ocado’s warehouse in Dordon, Warwickshire, for £170m, and leasing it back to Ocado. Morrisons is also investing £46m to expand the warehouse. Waitrose is consulting its lawyers about the legality of the deal.
In response to a question from Mobile Marketing after the lecture last night, Steiner confirmed that Ocado could not legally run the home delivery service for any more than two UK grocery retailers, but said it could operate a service for non-food retailers, or for grocery retailers outside the UK.
