Morrisons gives out cash to tempt online customers
The campaign with Quidco will offer exclusive members cashback rates ranging from £5 to £10, if they are first-time Morrisons online shoppers.
Amanda Metcalfe, digital marketing manager for Morrisons, said: “Working with Quidco enables us to reach a vast quantity of highly-engaged customers and reward them for shopping with us.”
Britain’s fourth-largest supermarket was a late entry onto the online grocery scene and only announced its e-retailing plans in March last year.
Setbacks since its launch
Yet, its online business has suffered setbacks since its January launch this year, when George Dymond, the man recruited to head Morrisons’ online grocery service, resigned just weeks after starting his new role.
Although Morrisons would not confirm why Dymond quit the role at the end of January, a report in the Financial Times said: “Some people familiar with the situation suggested that the role had not turned out to be what Mr Dymond was expecting.”
Online grocery sales have been forecast to reach £16.9bn by 2019, which is up £9bn on today’s value and a market Morrisons is desperate to succeed in.
Andreas Andreou, commercial director at Quidco, said: “The online grocery market is growing rapidly.
“Our members spent close to £3M from June 2013 to the same time this year, a year-on-year growth of nearly 40%,” said Andreou.
‘More and more competitive’
“The market is getting more and more competitive and supermarkets need to utilise marketing channels that help them target prospects that are likely to shop with them.”
In the past, Dalton Philips, Morrisons’ chief executive, has blamed poor sales on the company’s lack of online capabilities, as well as a poor convenience offering, compared to the other big three.
The retailer has also been hit hardest out of the big four by the success of discounters Aldi and Lidl, which analysts have predicted would have combined sales to top Morrisons’ by next year.
Sale of Kiddicare
Yet, Morrisons’ ability to run a successful online operation was questioned following the sale of its Kiddicare children’s clothing range this month. The demise of the brand followed the opening of 10 stores, which turned out to be loss-making.
The brand, which started as an online retail operation before Morrisons bought it for £70M in 2011, was sold for £2M to private equity firm Endless. All 10 stores have been rumoured to close, putting between 700 and 800 jobs at risk.
However, analysts have claimed the online side of the business would have been successful, if it had not been “dragged down” by “heavily loss-making” stores.
Meanwhile, in a recent financial statement for the 13 weeks to May 4, Morrisons’ like-for-like sales fell by 7.1%, following the retailer’s announcement to slash prices on thousands of products.
