Online sales hit £1bn as Sainsbury's seeks multichannel success

Sainsbury’s £1bn online retail sales make up only a small proportion of its £25bn overall turnover

Sainsbury’s online retail sales are now worth more than £1bn, but make up a small proportion of its £25bn overall turnover.

“We passed the billion mark last year and that puts us in with the big players,” said Jon Rudoe, director of online, digital and cross-channel at Sainsbury’s. “We are a very big online retailer, but it’s only a single percentage digit of overall sales.”

Sainsbury’s considers itself a multichannel retailer, connecting with customers in-store, online and via mobile. But online is still a very small channel compared with its traditional bricks-and-mortar stores.

Rudoe said food is very different from other products customers can buy online. “Food is highly emotive,” he said at the Internet Retailing Expo in Birmingham yesterday. “As such, this it goes to explain why food is under 10% penetrated online.

“Customers expect us to talk to them consistently across channels. They are talking to Sainsbury’s, they are not talking to Sainsbury’s Online.”

Loyalty programme

Rudoe said the data gathered from the supermarket’s Nectar loyalty programme is “hugely important” to maintaining a single voice across channels.

“I don’t think when loyalty cards were started that they thought it would be key for multichannel business,” he said. “But it gives us a huge understanding about multichannel behaviour.”

Rudoe said retailers need to think creatively about the data stored in organisations, and need to win customers' trust. “Just because you can do it doesn’t mean you should do it,” he warned.

“Digital is a place where, if you don’t think about it, it’s easy to overstep the mark. Remember trust and transparency, and remember how important and valuable the data you have is.”

Mobile Scan & Go

Rudoe said innovation and experimentation are key, and one area where the retailer has been experimenting in five of its stores is Mobile Scan & Go, which allows customers to shop and scan items with their own smartphones.

“We’ve been doing it in stores with handsets for a number of years, but encouraging use on customers’ own phones – we’re the first retailer to do that,” he said.

Mobile Scan & Go is still being tested in beta mode and Rudoe recognises that Sainsbury’s has to think differently about risk when it is experimenting. Although he couldn’t reveal any insights as yet, he said the pilot scheme had taught the supermarket a lot about how its customers may use mobile phones to shop.

Tesco’s mobile experiments

Meanwhile, Mark Cody, senior marketing manager for mobile at Tesco, said the retailer had also been experimenting with mobile in its stores.

“Customers are using phones in-store,” he said, also speaking at the Expo. “When you walk round a retail store, people are using phones for all sorts of things.”

He said it was a supermarket’s responsibility to implement Wi-Fi in-store, especially in superstores where the mobile signal is often poor. “How do you provide the tools to help them?” he asked.

Cody said Tesco is experimenting with a shopping list application, whereby customers create their list at home and, when they enter the store, the mobile app uses location services to tell the customer in which aisle the items are located.

Cody said he also sees a lot of customers use mobiles while walking round stores to research products. “Retailers have a massive amount of information on their websites, but it’s difficult to access in-store,” he said. “You need to encourage people to access your website, as opposed to Google.”

For this reason, Tesco has been experimenting with new technologies such as NFC and QR codes. One QR code campaign that directed customers to video content received 10,000 scans.

“When something [technology] better comes along, don’t ignore it – give it a try,” he said.

Cody said retailers should also not forget the potential of SMS as an additional channel. “It amazes me how many retailers still forget to use SMS as a simple way to get simple cut-through direct to the customer.”

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