Profitable growth in multichannel grocery
For a world-leading supermarket, shaped an ambitious profitable growth strategy for online grocery.
A root and branch review of the online proposition, operations and economics and an integrated view of the customer across channels forged the basis for an accelerated growth strategy, and inspired a shift to omnichannel thinking across the organisation.
Context
The online division of a major global supermarket was struggling to meet the Board’s aggressive expectations for both top-line growth and profitability.
Our client, the head of the online division, asked us to support his team to shape the strategy for a profitable online grocery business, and to quantify the levels of revenue and profit they could ambitiously – and realistically – deliver.
Approach
Working as a fully integrated team with the client, we reviewed all aspects of the online proposition, operations and economics. We worked with the stores to understand their perspective, and developed an integrated view of the customer (sales, ATV, ATF, profitability) across channels.
The work clearly identified the importance of integrating the store and online offer both from a customer perspective and for the company’s economics. Multichannel customers spent significantly more and stayed longer. To date, the dominant store channel feared cannibalisation of their customers and economics; it was time to think omnichannel.
Impact
The work led to a fundamentally new approach, with the stores and online collaborating on customer acquisition and cross-selling. It also led to a stretching but achievable set of targets for accelerated online growth and profitability, based on a shared understanding of the economics.
Omnichannel has proved to be the winning customer proposition.