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Morrisons signs deal with Ocado for online delivery

Kathleen Hall

Morrisons has signed a deal with Ocado to use its technology, logistics and distribution operations to deliver online groceries by January 2014.

Morrisons is the only major supermarket lacking an online grocery division. It has come under mounting pressure to improve its multichannel offering, despite concerns over the profitability of online grocery services.

Dalton Philips, chief executive of Morrisons, said: "This agreement is a significant strategic step for Morrisons.  From a standing start, Morrisons will be competing in the fast growing online channel by the end of this year with a really compelling proposition.”

Ocado will serve Morrisons through its recently opened Dordon Customer Fulfilment Centre  in the Midlands, with customer deliveries made through Morrisons’ fleet.  

The supermarket will pay £170m to Ocado to acquire Dordon and associated mechanical handling equipment, as well as a licence and integration fee. It will invest a further £46m to expand Dordon and integrate its systems with the site. 

Morrisons recently implemented a Salesforce.com customer relationship management (CRM) system as part of its first phase in launching its online food business next year.

The platform is intended to create a single view of the customer and ease the transition to online by having nearly five million digital customer records.

Nick Collard, marketing director at Morrisons, said: "Having instant access to customer data in Salesforce will help us better understand our customers and focus on what really matters to them."

Capgemini was responsible for delivering the CRM and integrating it with multiple existing IT applications at Morrisons. The CRM replaced a mixture of earlier generation technology and manual processes.

 


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