Online retailer Ocado is the UK’s fastest growing brand according to a new BrandZ report which records a 63% increase in brand value over the past year, reflecting the impact of the pandemic on consumer shopping habits.
The 2020 BrandZ™ Top 75 Most Valuable UK Brands report from WPP and Kantar also highlights the rapid growth of food delivery brands Deliveroo (+40%) and Just East (+19%) – the second and third fastest growing brands.
As a specialist home delivery service, Ocado has particular online capabilities and is perceived differently from other grocery retailers, BrandZ notes.
In fact, for many years Ocado was virtually synonymous with Waitrose. So, it came as a bit of shock to many people when that almost-20-year relationship recently came to an end. Quite a few people discovered that Ocado is actually a separate company: an online-only retailer that buys groceries from its partners and then delivers these to shoppers from its own warehouses. Once that partner was Waitrose, now it is Marks & Spencer.
However, Ocado is more than just an online retailer. Ocado Group consists of Ocado Retail UK (which operates as a joint venture with M&S in the UK, trading as Ocado.com) and Ocado Solutions, which offers the Ocado Smart Platform as a service to retailers around the world.
Luke Jensen, CEO of Ocado Solutions, told the recent World Retail Congress that the brand’s UK retail business “is seen as the online business and it became a point of focus for consumers [during lockdown] as to how they could shop without having to expose themselves by going to shops”.
The Ocado model – delivery from its own customer fulfilment centres rather than individual stores – also proved valuable. Jensen reported that first half sales in the UK retail business had risen 27% while EBITDA jumped 87%.
That same model also enabled the brand to significantly increase capacity in its facilities – by putting more robots to work or being selective in what was stocked. And the Ocado Solutions side of the business was also able to help partners operate more effectively.
“We helped increase the capacity of Morrisons to fulfil orders from stores fivefold in the period of the crisis,” Jensen said. “So actually, we were able to bring in substantially more capacity to the UK market.”
For more details, read WARC’s report: How Ocado negotiated lockdown.
Sourced from Brand Z, WARC