Why Zoom by Ocado’s boss George Dean is hoping slow and steady will win in rapid delivery

Welcome to Zoomtown – otherwise known as Leeds. The city is the next stop on Ocado’s ambitious but sluggish rollout of its one-hour delivery service, Zoom.

The mayor is George Dean, director of Zoom by Ocado, who has led the service since January 2019. A former management consultant, Dean entered the world of food following a consultancy stint at a Grimsby fish factory. “I loved it,” he recalls, speaking from his office in Zoom’s Canning Town fulfilment centre. “You’re taking fish out of the sea, chopping them up, getting them into supermarkets. I can see it, I can touch it, I can smell it, I can eat it. I understand this.”

It was an initial entry point, but several years later and Dean is a long way from fish chopping at Britain’s east coast ports. This month in Leeds, Dean will launch Ocado’s fourth mini-customer fulfilment centre (CFC) for its Zoom service, a delivery app that offers up over 10,000 products from M&S and Ocado, for delivery in less than 60 minutes.

Zoom was launched prior to the rapid grocery storm that erupted during the pandemic, but unlike its faster competitors, it has struggled to grow at the same rate. The rollout has been undeniably slow, with Leeds the first of Ocado’s CFCs to open outside London.

Nevertheless, Dean is bullish about Zoom’s prospects. “We think this can work in every medium to large town in this country,” he says, pointing to a planned rollout in several other cities in the course of the next year. In Leeds, the focus is on making it a “city-wide proposition” with all but the furthest suburbs covered. “Our ambition is to make it a Zoomtown,” he says.

The stuttering rollout of Zoom has not been for lack of effort at Ocado Retail – the joint venture between Ocado and M&S. Dean insists one-hour delivery has never been a pet project or mere “channel tacked on to something else”. “There was always a lot of focus. We’ve got something special that has potential to be much bigger than we are at the moment.”

Dean’s predecessor at Zoom was Hannah Gibson, now CEO of Ocado Retail. She interviewed Dean for his job and now as head of the joint venture, is likely to understand more than most the difficulties in Zoom’s gradual rollout. 

The major holdup at Zoom has primarily been due to property. Compared with Zoom’s rivals in the rapid grocery sector, which offer a far smaller range, much quicker delivery times, and have opened scores of dark stores over the past two years, Zoom’s soon-to-be four CFCs may seem meagre.

But Zoom’s larger range and extensive machinery mean its requirements are more demanding. “We unfortunately can’t just find a railway arch or old store front – we have to find some quite specific properties,” Dean explains. That’s due to the heavy robots that pick items from a metal framed grid and serve them up to operatives to pick and pack into bags.

Location requirements

The upside is that Zoom is not so desperate for location in the heart of residential areas as rapid grocery. Zoom’s delivery area stretches to at least a three-mile radius, making sites such as Canning Town’s industrial park site – a former clothing recycling centre – just fine. But sites must be tall enough, have enough power, and a big enough yard for delivery vehicles. Their foundations must also be suitably heavy duty to take the weight of the robots. On potential property visits, one of the main questions is about the underlying concrete slab – “does that look thick enough?” Dean says.

Ocado will soon introduce lighter bots and smaller grids, meaning a larger range of properties can be considered. But regardless, finding suitable warehouses and securing deals takes a “frustratingly long amount of time” Dean admits. “I’m frustrated at the time it’s taken us to get to where we are. That has been not through a lack of desire but because we’ve got a different business model.”

“I’m frustrated at the time it’s taken us to get to where we are”

As Dean walks beside a robotic grid at the Canning Town CFC, a picker takes items from a plastic tote and puts them in paper bags. “We sometimes try and guess the customer mission,” he says, gazing at an order of three bleach bottles and a buffet’s worth of pastries.

The paper bags get pushed on a trolley over to a shelving rack, ready for dispatch. Many are not for immediate delivery but have been scheduled to arrive later in the day. It turns out one-hour delivery isn’t why many Zoom shoppers use the service. “There’s a time and place when consumers are willing to sacrifice choice and pay a premium to get something they want right now,” Dean says. “But that was never the core mission of Zoom. We could deliver faster if we wanted to optimise around that, but for great range and great value, we go with the hour.”

While Zoom is often bundled in with the likes of Getir, Gopuff and Deliveroo given its speed, Dean stresses the service really isn’t the same. Rapid grocers satisfy the shopper in distress. And while supermarkets and Ocado serve the big weekly shop, Zoom provides for everything in between.

“There’s this huge middle ground where most missions fall,” Dean says. “The great thing about the middle ground is it’s the biggest opportunity. That’s where most consumers are.”

Range is ultimately what sets Zoom apart. Its 10,000 SKUs compare with about 3,000 at convenience stores and around 2,000 from rapid grocers. “You search for what you want and get what you want rather than the dark stores players where you have to look at what they’ve got, and if you go on with a list of 10 items you’re unlikely to get them all,” Dean says.

There are other large-range, one-hour services out there: the likes of Tesco’s Whoosh or Sainsbury’s Chop Chop, for example, where the store-pick model gives it an advantage when quickly expanding to new towns. The downside is they often suffer with poor availability. “For a rapid customer, getting what you’ve ordered is super important,” Dean says.

Still, more and more people are trying Zoom for the first time and sticking with it, Dean says. Thanks to rapid grocery’s enormous marketing efforts, “consumers are much more aware you can get groceries delivered quickly and that’s a good thing for us,” Dean says.

Zoom’s appeal is therefore broader and broadening. There are dine-in-for-two meal deals. Soon launching is a ‘fill your cupboards’ bundle containing £60 worth of cupboard, fresh and household items for £40. And the customer base in locations such as Acton in London is hugely diverse, Dean says.

“People always want to come up with ‘the persona’ of the customer,” he says. “In grocery that’s not what it’s about. You’ve got to serve a wide variety. Not some idea of a young professional couple with a bit of money living in a certain kind of house living a certain lifestyle,” he says in a pointed barb at some of his competitors. So what sets Zoom apart? Quite simply, Dean argues, “people shop at Zoom because it’s the most convenient way to do regular grocery shopping”.