“Be as good as Ocado”

Hajrë Hyseni
University of Hertfordshire

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Friday, 22 October 2010
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Friday, 22 October 2010
 Let’s look at

• Product modelling • Payment

• Stock availability • Merchandising
• Shipping costs • Marketing
• Pricing • Customer service
• Shopping cart • Innovation
• Search • Complexity
3
Friday, 22 October
Thursday, 2010
22 October 2009
 Product modelling
• Number of products
• What data is stored?
• How are products
grouped?
• How are variations
handled?
• Units and quantities?
• Affects decision support,
navigation and
recommendations
• Frequency of changes

4
Friday, 22 22
Thursday, October 2010
October 2009
 Stock Availability
• Link with live warehouse
or retail data
• Consider frequency of
updates - replenishment
• Availability may change as
people shop
• Substitution for ‘similar’
• Demand information fed
back to purchasing
• Seasonal changes affect
availability

5
Friday, 2222October
Thursday, October2010
2009
 Shipping

• Fulfilment logistics
• Speed of delivery
• Different items require
different conditions
• Costs of delivery affect
customer decisions
• Hiding costs of delivery?
• How are returns handled?

6
Thursday,
Friday, 2222October
October2010
2009
 Pricing

• Making a profit?
• Factors affecting price
• Offers from suppliers
• Price matching other sites
• Multi-buys
• Weight based prices
• Bundles and transparency
• Personal pricing

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Thursday,
Friday, 2222October
October2010
2009
 Shopping cart/basket

• Ajax basket (on page)

updates automatically
• Provides reassurance
• Allows updating of
quantities and deletions
• Shows total and number of
items
• Linked to checkout

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Thursday,
Friday, 2222 October
October 2009
2010
 Search

• Linked to product model

• Guided search
• Based on customer history
• Suggested items as you
type
• Suggested products
alongside search
• Designed to be as simple
as possible

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2009
 Payment

• Types of payment accepted

• Security
• Fraud protection
• Continuous authority
• 3D secure?
• When is payment actually
taken?
• Dealing with failure
• Gift cards
• Legal issues

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 Merchandising

• Guiding the consumer

• Supporting brand values
• Working with suppliers
• Personalised to each client?
• Frequency of updates?
• Linked to seasons, offers
and marketing
• Linked to availability
• Category, product and
service

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Thursday, October 2010
October 2009
 Marketing

• Highly personalised
• Based on buying history
• Linked to availability and
promotions
• Timed to create regular
orders
• Support brand values
• Tracked and optimised?
• Technically sophisticated

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Thursday, October 2010
October 2009
 Customer service

• Keeping customers happy

as important as gaining
customers
• Multiple ways to interact
• Frequently asked questions
• No quibble guarantees
• SMS support
• Delivery staff
• Clear documentation

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October 2009
2010
 Innovation

• Business model
• Frequent shop
• Personalisation
• iPhone App
• Tesco Price Match
• Internet pricing
• Supplier relationships

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October 2009
2010
 Complexity

• Distribution • Innovation
• Scale • Optimisation
• Customer service • Intelligence
• Competition • Project
• Technology management

• Funding • Quality
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Thursday, October 2010
October 2009
 Behind the scenes

• £350m (over 8 years) investment in infrastructure, technology and processes

• Recent funding from Al Gore and Proctor & Gamble

• 16,500+ SKUs , 5 year deal with Waitrose

• 75,000 orders per week, £100+ Average order value

• Nearly profitable

• http://www.youtube.com/watch?v=6yu5XXArDpo or

• http://www.youtube.com/watch?v=heBdvEqDGtQ

• http://www.retail-week.com/ocado-ups-ante-as-online-food-battle-hots-up/
5001966.article

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 Questions

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October 2009
2010