Strategy: addressing the market

We continuously focus on improving the service we offer our customers. In doing this we focus on three key elements: product, price and service. Combined effectively, these elements are drawing new customers to Ocado. Simultaneously, we are constantly working to improve our infrastructure to serve this growth.

Driving growth

Improving the customer offer

Product Offering

  • Wide Range: We aim to offer a wide range of quality products at a value-for-money price point. We are able to offer dedicated online inventory across a wide range of SKUs that traditional sales channels cannot stock economically. In 2010, we:
    • Stocked 21,500 SKUs at year end
    • Introduced Ocado own-label (over 250 SKUs and growing)
    • Added convenience product range
    • Rolled out service counter
  • Quality and Freshness: We offer guaranteed "use by dates" to customers that are visible at both point of order and on receipt, listing purchased items by expiry date as a useful reminder to customers. In addition, the fulfilment process is designed to maximise product quality by minimising the number of human touch points and maintaining the optimum product temperature.


  • Value for Money: We have improved our price positioning over the last three years. Since March 2008, we have price matched Tesco on all identical branded products. We have also launched the Ocado own-label range to improve our value credentials. In 2010, we:
    • Expanded Tesco Price Match to 7,200 SKUs
    • Introduced "Switch and Save"
    • Substantially increased the number of promotions

Customer Service

  • Accuracy and Availability: We deliver over 100,000 orders per week (the equivalent of 1 million items per day) and we do this more accurately than any other online grocery retailer. 99% of items are delivered exactly as ordered. We have 95% of our products available for next day delivery.
  • Delivery Service: We have the widest range of delivery slots of any online grocery retailer and 95% of customer orders are delivered on time or early. The Ocado Delivery Pass provides customers with an opportunity to subscribe for their deliveries for a monthly or annual fee. In 2010, we:
    • Launched mid-week Ocado Delivery Pass
    • Rolled out Sunday deliveries
  • User-friendly Interface: Our website is the first point of contact for our customers. We have designed it to be engaging, intuitive and with good functionality. Complementing the website is our dedicated call centre, focused on helping customers with queries. Finally, our CSTMs who make the deliveries (and who are much more than drivers) are key to getting "hassle-free" groceries to customers. In 2010, we:
    • Launched the 5th version of the website, which is easier to navigate, has more personalisation, increased dietary filtering, additional recipes and more supplier opportunities
    • Added reviews and ratings
    • Launched iPad and Android apps
    • Upgraded the Ocado iPhone app

Improving our infrastructure


  • We currently operate from a 295,000 sq.ft. Customer Fulfilment Centre in Hatfield. 85% of inbound goods are delivered direct from producers to CFC1, whilst 15% are delivered from the Waitrose supply chain. All customer orders are processed at CFC1 and around a quarter of orders are delivered direct from CFC1. In 2010, we:
    • Increased capacity by 30% to serve 112,000 orders per week in peak week
    • Added 3 new chill aisles
    • Identified and reached agreement on a site for CFC2


  • The majority of orders are relayed from CFC1 to Spokes for ultimate outward delivery to customers. In 2010, we:
    • Acquired a new Spoke in Bristol, which opened in March 2011
    • Expanded White City Spoke


  • The business runs on proprietary software. This software allows us to know exactly where each product is, from order to delivery, resulting in increased order accuracy. In 2010, we:
    • Developed a new range management system
    • Deployed more than 1,500 individual changes to our CFC systems

Delivery Fleet

  • We deliver direct to our customers' kitchens using our fleet of bespoke vans. In 2010, we:
    • Developed 5th generation of van, which increases payload by 10%
    • Put winter tyres on our vans to improve safety and delivery performance
    • Trialled new electric vehicles

Delivering Growth

Gross SalesEBITDAAverage weekly ordersNumber of active orders by FY end

1 Adjusted to exclude one-off IPO costs of £3.5m

Ocado Van