Sainsbury’s digital efforts pay off as online grows 15%

Sainsbury’s online grocery channel has grown 15% year-on-year, resulting in an annual turnover of £1bn

Sainsbury’s online grocery channel has grown 15% year-on-year, resulting in an annual turnover of £1bn.

Sainsbury's has seen its share of the grocery market increase thanks to the growth in online sales and increased revenue over the first six months of its financial year.

Its half-year financial results ending 28 September 2013 Sainsbury's reported £12.7bn revenue and pre-tax profit of £433m.

Justin King, chief executive said: “Our share of the grocery market is the highest for a decade at 16.8% following 35 consecutive quarters of like-for-like sales growth.”

The 15% growth of its online channel has seen the supermarket processing over 180,000 orders a week.

The retailer believes this success has come from customer service and product availability, and it has made plans for a centre in Bromley-by-Bow to fulfil the demand from the online shoppers in London and south-east England. Sainsbury’s said the centre will allow the retailer to serve an additional 20,000 online customers per week.

Sainsbury’s stated: “The trend continues for customers to shop across a range of channels – supermarkets, convenience and online. 

"Where customers shop online and in supermarkets, their total spend is more than double the average supermarket-only shopper.”

Additionally the supermarket said over half of its customers now use the Click & Collect service, which is available in over 1,000 of its stores.

Its new website will be available nationwide by Easter 2014, and plans to offer customers faster and more intuitive product search, as well as recipes and ideas. Sainsbury’s said its new website performs well on tablet devices, and will plan to build on this functionality in future years.

The retailer also launched a digital on-demand service in April 2013, which offers customers the ability to buy or rent films which can be downloaded or streamed to different devices, as well as offering digital e-books and music.

Additionally, its trial of a Mobile Scan & Go programme in four stores which allows customers to scan shopping using their smartphone has received positive feedback from customers who say it would help them with budgeting.

This year Sainsbury’s launched its own mobile network – Mobile by Sainsbury’s – in conjunction with Vodafone. It also launched I2C with Aimia, which provides Sainsbury’s suppliers with a better understanding of its customers by analysing shopper behaviour using the Nectar loyalty scheme.

The two joint ventures recognised a combined net loss of £2m over the past six months, which according to Sainsbury’s was driven by “initial startup costs”.

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