The full letter to The Grocer

I've had a letter to The Grocer published in this week's issue (8 October 2011) - but it has been heavily edited.

So here is the full letter:

Last week was certainly a week for headline grabbing numbers in the grocery sector. As Tesco announced £500m of price cuts, Morrison was lambasted in a report by Head Agency estimating that the company had lost out on £314m of sales because it has had no etail-presence. A reading of the Head Agency’s report provides some useful ideas for retailers and emphasises the need for online engagement, but the fact that Morrison’s ‘lost out’ should come as no surprise. The conscious decision by the firm to be a late online adopter is probably a cultural legacy of the Ken Morrison ethos of their simple, but certainly not simplistic, approach to retail success. Whilst early adopters such as Tesco may have stolen a march on Morrisons, the northern-based firm has been investing in other areas and is now beefing up its virtual presence. Organisations in general, and retailers are no exception, change leadership to provide new impetus. Whilst Dalton Phillips’ appointment was not planned he has provided that impetus and Simon Thomas’s appointment from Apple earlier this month is further proof that, from a low base , Morrisons will no doubt be the growth story here. Not only has Morrisons taken a 10% stake in FreshDirect, the US online grocery business, the acquisition of kiddcare.com brings into the firm more experience and expertise required for the firm to move to the next level of e-development. Whilst Tesco may have had first-mover advantage Morrison’s will be upping its game here.

An interesting aspect of the Head report is a call for greater customer engagement, an area that Ocado is commended on. The report suggests retailers’ ability to deal with customers on a one-to-one basis by the use of, for instance, social media and follow-up emails is part of the battle ground to qualify for consumers’ patronage. But these activities can be resource-heavy and the ability to get it wrong, as seen by some retailers’ anodyne responses to customer feedback on maryportas.com/secretshopper, is probably indicative of the challenges and, no doubt, costs of trying to offer an individualised response.

It is clear that consumers’ expectations are on the increase, be it in terms of price or convenience in particular. That convenience also means the ability to shop when and where the consumer wants, using devices of choice – and it is clear that the UK leading retailers are embracing this opportunity. However, the Head report is critical of the failure of retailers in general to keep their e-offers up to date and compliant with the many different mobile devices in particular. On top of this we can add the promiscuous nature of today’s shopper. And whilst the Head report identifies the potential lost sales from not having the ‘right’ e-presence the challenge still remains for some retailers on how to make a profit from the new channel in these straitened times.