It’s the week before Christmas, you’re still at work and run off your feet trying to buy your last Christmas presents. Do you really want to trot down to Morrisons and spend two hours doing your Christmas food shopping or would you prefer to order it online from Tesco, Asda, Sainsbury’s, Waitrose or even M&S?
It appears that for many the answer was let’s do it online, at least that’s the conclusion of Morrisons’ CEO Dalton Philips. I heard him on the BBC News saying that the majority of his customers weren’t interested in shopping online and he’s right, only about 5% of grocery sales are ordered on the net. That’s still a significant slice of business though.
Morrisons sales were down 2.5% in the run up to Christmas and whilst you can’t attribute all of the drop in sales to customers choosing to order elsewhere online, one does wonder how much extra online shoppers would have spent with Morrisons if delivery options were available.
It’s no secret that the profits from online sales are nowhere near as good as those from purchases made instore. Setting aside impulse purchases and the ability to see just how much you’ve spent before you get to the checkout, the costs of delivery, especially within a set hourly slot, are pretty steep. Shoppers in store are much more attractive to the bottom line.
Dalton Philips insists that it’s not too late for Morrisons to get transacting online and points out that not only have his competitors not managed to turn a profit from web customers, but that there are some last mover advantages as Morrison can learn from the best of their competitors.
The fact remains though that the trend in shopping is to use the web. General sales in the high street were up a miserly 1.5% in December according to the BBC, whilst general online sales were up 17.8%. Not to start offering online shopping in the near future would start to look like a big mistake.