Asda is on a drive to make it more convenient to shop at the grocer by investing heavily in its multichannel delivery methods.
Over half – 53% - of the UK’s population has access to an Asda store, says the grocer’s senior ecommerce director Saeed Anslow, and there are plans to increase this. But the grocer isn’t following a traditional expansion plan.
Asda does not intend to increase its footprint using store expansion as its only method, as space-hungry grocers have done in the past – instead, Anslow says, the plan is to extend its reach to new consumers using multichannel delivery methods.
“We looking for remote [delivery] sites to cover parts of the country where we don’t have a presence,” he says. “As we move through 2015, the number of remote sites will increase – we’re looking to extend access to Asda.”
Asda has carved itself a niche at the front of the pack for delivery, and it has been instrumental in helping to shape what the retail proposition of the future will look like.
It was one of the first to introduce drive-thru click and collect, and also led the way with its TfL partnership that enables commuters to pick up groceries on their way home through tube stations.
Part of this is because of its close ties with parent company Walmart, which has transformed itself into a digital leader over the last three years, having lagged behind competitors previously.
But Anslow says Asda also does plenty of its own innovative work, and that some of its ideas have been adopted in the US – he says 29 stores in Denver are using a lot of the concepts Asda has in the UK, for instance.
These ideas encompass everything from collection of orders in local schools to same day click and collect.
Asda is rolling out its same day service to all its stores, meaning any shopper who orders before 1pm can collect their order after 4pm on the same day. It is also in the middle of a Sunday delivery service that will mean drive-thru customers can get their orders seven days a week.
In addition to the store-based services, Asda is also going after shoppers who do not live near an Adsa store. It is piloting delivery services that allow shoppers to order Asda products online and pick them up at a store, a school or a business park, and Anslow says there are big plans for this sort of service in the next five years. In total, 1,000 click and collect sites, both at stores and in other locations, will soon be available.
He says: “Over the next five years we’re looking to move into over 1,000 sites in a phased roll out.” Commuters are a particular focus for the grocer – it thinks there is a big opportunity to target shoppers whose daily commute takes them through a potential collection point.
This sort of service lends itself easily to non-food, and Asda says click and collect has actually overtaken home delivery as the delivery method of choice for non-food shoppers.
But for food, things can be a little more challenging – every collection point that provides a food pick-up service would need refrigeration, which is less straight-forward.
Anslow says the overall aim is to provide a service that fits into shoppers’ day-to-day routines. “We’re trying to improve convenience for shoppers, and speed of service. The key point is convenience, and finding locations that fit with customer lifestyles. As long as it fits in with customers’ lives, it works well.”
Anslow says there have been “no major surprises” in terms of unexpected challenges thrown up by the various delivery projects it has on. But what the new delivery strategy has given Asda, he adds, is new levels of insight into how shoppers use different channels and services.
“What has been interesting is some of the patterns we’re seeing. Some of the best times are in the evening, or in the early morning after the school run. It has been insightful.”
A big positive, he adds, is that these newer services tend to attract customers who previously wouldn’t have considered Asda. “It appeals to new customers rather than people who already shop with us.”
Different people use multichannel services at different times of the week, Anslow adds. “It appeals to different shoppers at different times. Sometimes it’s mums, and other times it’s commuters looking for last minute dinner plans. There’s no real difference in terms of demographics, although it is generally a slightly younger demographic who shops online, and that is also what we’ve seen for click and collect.”
By the end of this year over 200 stores will have drive-thru capabilities as Asda focuses hard on convenience. “It’s an operation which is very much around convenience and speed of service. We’re looking to complete the drive-thru service in five minutes.”
The new services, while designed to fit into shoppers’ days and existing routines, have also led to new shopping habits being formed.
“We have seen shoppers do click and collect for some items, but then still shop in store. It’s giving a bit of time back to customers, and takes away some of the boring chores of shopper. It means there’s more time to do more browsing.”
In the future, more innovative ideas can be expected, Anslow adds. “In terms of future development, we work very closely with Walmart as a global ecommerce team, and there are lots of developments in the pipeline.”
Overall, the aim is simple. “It’s about being the most convenient online food retailer – that’s our goal. We already lead from a price perspective and we want to lead on convenience, being there for the customer, and giving choice.”
Mobile will play a central role in Asda’s proposition in the coming years, as it will for every retailer. “Two years ago very few orders were placed on a mobile, and now it’s over a third,” Anslow says. “That’s where convenience comes in – it’s not really about online on the desktop anymore.”
The food sector is having a tough time at the moment – Aldi and Lidl are snapping at the heels of the big four and there is little room for growth in the market. Asda’s response is not just to enter yet another price war – instead, it is planning a convenience offensive using a range of multichannel tricks. The outcome of the current tussle in grocery is a long way off yet, but Asda clearly wants to take the battle in a new direction.
Asda’s delivery plans
Asda is rolling out same day click and collect services to 250 of its stores, which is says is the widest roll out so far of this service by a UK supermarket. Shoppers who order by 1pm can collect their order after 4pm the same day.
120 of the new ‘same day’ collection sites will be drive through services, allowing customers to collect their shopping without having to get out of their car.
Almost 10% of all online orders are now collected in store.
In November, Asda announced a trial of click and collect services in six London underground stations, making the collection of groceries more convenient for commuters in London.
In March, the retailer launched the first click and collect lockers for groceries in the UK at its Pudsey store.
Asda plans to roll out 1,000 click and collect points over the next 5 years.
It aims to have collection points installed across all its existing stores by the end of this year.