5 Reasons Why Challenger Brands Should Be Investing In Ocado, by Jamie Mitchell, CEO of Daylesford Organic
Daylesford Organic's rather beautiful farm shop on Ocado. Here is Jamie Mitchell, CEO of Daylesford Organic, to tell you what being on Ocado has meant for Daylesford's sales:
"For the past 7 years, I have had a bit of a crush on Ocado. Why? Well, let’s start with the service. As an internet only grocer, they have proved themselves time and again with their world class innovation in web-ordering and delivery. Their shop is the most intuitive of all online offers, and who hasn’t felt the warm glow of customer loyalty when that text arrives to confirm the imminent arrival of a food order, informing you the name of the driver, the name of the van and, in rare circumstances, any items they haven’t been able to fulfill?
But this blog isn’t about my consumer crush. I have had the pleasure of touring their logistics centre twice now, and both times I walk away amazed at the technology, all focused on improving the customer experience. And as a supplier to them for over 7 years, first at innocent and now with Daylesford, I have found myself drawn to investing significantly in Ocado as a great partner for my brands.
In September this year, Daylesford launched a virtual farmshop on Ocado, fully utilizing their brand new ‘shop-in-shop’ technology. Our sales quadrupled overnight. Here are my top five reasons why I think every challenger brand should not only seek a listing on Ocado, but should over-invest in them:
1. Ocado wants to be the emporium of food…
That means they want to list smaller, unique brands – you don’t have to be listed with Waitrose first. That’s not to say any brand can walk in to Titan Court, Hatfield and get listed – you still need to prove your worth, prove your quality and uniqueness, and demonstrate why you will deliver incremental sales for them.
2. Ocado is a rich platform for telling your story…
Most challenger brands have a great story: innocent and gu have shown the way. Scores of other artisan and challenger brands are following. But other than on the back of pack (a medium too many brands overlook), it’s almost impossible to tell your story in traditional retail. Even if you invest in shelf POS, which costs big time, we all know that you ‘shout’ only one simple message at shelf. And it is a shout, not a conversation – grocery customers with a trolley don’t tend to meander much for a chat.
But online, you have more of an opportunity to break their cycle, to say hello and to tell your potential customers something about yourself. Whether you invest in a micro-site or shop-in-shop on Ocado or send an incredibly targeted email to a segment of their customers, there are a multitude of ways to have a direct conversation. It costs money, of course, but when combined with a promotion, the paybacks are large and fast.
3. Ocado’s customers give direct feedback…
Ocado’s customers leave reviews. As a relatively young service, these reviews aren’t yet as rich as, say, those on Amazon. But for real time feedback on which products customers love, and which products could be improved, it’s an invaluable service.
4. Ocado offers a measured platform for growth…
Most challenger brands are not ready for massive scale overnight. Growth, while critically important, needs to be measured. Operations need time to scale up with revenue growth so that quality and consistency remain high. In truth, many challenger brands would fall over with a full listing in Waitrose.
Challenger brands also don’t know precisely whether their brand is strong enough to handle a large scale supermarket roll out – too often the rollout happens and the brand has not reached enough parts of the country. Soon, individual stores register huge waste, especially with fresh products, and turn off the new product. And in time, the buyer decides it was a mistake to list in the first place. Since you rarely get a second chance in big grocers, finding an alternative platform to grow your brand first is ideal.
And Ocado offers just that platform. Easier to grow than the independent channel, with a large enough opportunity to really scale your business. And, of course, as a business itself, it’s growing at 30% a year as well.
5. Ocado is itself a challenger brand…
As such, they think like other challenger brands, employ entrepreneurial people and want to shake things up a bit. If you don’t know them, get to know them. You’ll enjoy working with them."
Good advice. Thank you very much, Jamie.