Morrisons is reaping the benefits of ending its exclusive deal with Ocado by developing a closer relationship with customers through Amazon and rolling out rapid delivery.
The supermarket is to extend the ‘Morrisons at Amazon’ rapid grocery delivery service to cities across the UK this year.
It will also gain more control as a retailer on Amazon’s site, rather than a wholesaler to the internet giant, including setting prices and collecting customer information. Customer invoices will name Morrisons rather than Amazon as the retailer.
Those changes would not have been possible before May this year, when Morrisons was tied to Ocado as its exclusive digital partner and limited to a wholesaler relationship with Amazon.
Morrisons chairman Andrew Higginson told The Grocer it meant Morrisons would become the “retailer of record” on customers’ invoices, seen as important in strengthening the relationship.
A Morrisons spokesman explained: “It means we have a direct relationship with customers and, compliant with GDPR regulations, we would have more information about the customers we’re selling to.
“We will be the seller, we will set our own prices, we will get the retail price not the wholesale price.
“We will move to becoming the seller of record over the coming months.”
Morrison at Amazon is currently available to Amazon Prime Now members in Leeds, Manchester, Birmingham, and parts of London and the home counties. This year, Glasgow, Newcastle, Liverpool, Sheffield and Portsmouth will be added, ahead of a rollout to even more cities across the UK, Morrisons said.
A full grocery shop can be picked in-store by Morrisons staff and delivered by Amazon drivers, either within as little as an hour from order or in a scheduled slot later the same day.
The expansion could help Morrisons retain online growth following its departure from Ocado’s flagship automated warehouse in Erith, south east London, which came with the end of exclusivity. The site previously fulfilled 10,000 Morrisons orders a week.
“Morrisons’ conveniently located local supermarkets and Amazon’s very popular website and customer offer are an ideal combination, offering ultra-fast same day grocery home delivery for customers in and around cities across Britain,” said Morrisons CEO David Potts.
“Amazon has been a valued partner of Morrisons for over three years, and we are pleased to be expanding our relationship together. Continuing to partner with the best digital operators such as Amazon is a significant, capital light growth opportunity for Morrisons.”
Amazon UK country manager Doug Gurr said: “We have greatly valued our relationship with Morrisons since the launch of the Morrisons store on Prime Now in the UK in 2016, and expanding this relationship enables us to offer Morrisons’ high quality grocery selection to even more Prime members.
“We are committed to growing our grocery business so that we can continue to deliver what we know our customers will always care about - low prices, vast selection, and fast delivery - and our relationship with Morrisons is an important part of that long-term growth. With the Morrisons store on Prime Now, many Prime members can do their full weekly grocery shop online through Prime Now with ultra-fast same day delivery.”
The imminent changes were alluded to in May after Morrisons’ departure from Erith, which Ocado saw as necessary to return to expected growth following the loss of its Andover warehouse in a fire three months earlier. Morrisons online/digital director Matt Kelleher told The Grocer at the time that Morrisons would develop a “very different” relationship with customers through Amazon as a result of shedding Ocado exclusivity.
The loss of Erith left Morrisons fulfilling orders from the other Ocado CFC it has use of, in Dordon, as well as through store pick.
Morrisons’ spokesman said today the number of branches doing store pick was still 24, as it was then, although a small number could deliver to wide areas. “We’re currently planning out the next stores we’ll be bringing online with store pick,” he said.
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