To the consternation of many Ocado loyal customers it has paused its guaranteed Reserved service as its website continues to strain under the weight of demand during the coronavirus outbreak.

The Reserved service allows customers receive a regular delivery day and time on a weekly or fortnightly basis. However, because of “technical problems”, it has cancelled customer orders at short notice and is not able to offer an alternative delivery as slots are fully booked for weeks.

“Due to technical problems caused by unprecedented demand, Ocado Reserved orders will not be going out for delivery – including those already placed,” the group said on Twitter. “We’ve emailed you with further info to help you make a new order. We apologise for any inconvenience caused.”

The email went on to say: “We’re very sorry, but due to technical problems caused by unprecedented demand, Ocado Reserved hasn’t been functioning as it should. Unfortunately, this means that Ocado Reserved orders will not be going out for delivery – including those already placed. We have made the decision to pause the service completely until the technical problems have been fixed.

“We understand this is not ideal and not the high level of service you’ve come to associate with us – we can only apologise for the frustration caused. We will reactivate this service for you as soon as Ocado Reserved is available again.

“We’d normally offer you an alternative delivery, however, the current high demand means our slots are fully booked for the next week.”

One customer who said on Twitter – “#Ocado I am incandescent with rage. My Ocado reserved delivery has been cancelled. I have been paying for this service since it was introduced. My slot has been given away. I have not been stock piling because stupidly I trusted Ocado. My husband and I are over 70. Suggestions?”

 

Why have they stopped a service they know is used by loyal customers?

  1. They really are struggling. Apart from all the nice comments on their own Twitter feed a quick search shows lots of customers who only had half their order delivered, was randomly cancelled etc. This is due to their business model, which is very efficient at normal times, but falls apart when there is over demand.
    • All their stock is in warehouses. This normally works well as Ocado are the only supermarket that knows how much stock they have
    • Products come from other retailers – mostly Waitrose, but also many others such as Morrisons, Casino as well as wholesalers and manufacturers. These all have their own channels that are also being hit by Covid-19 and are therefore not as reliable as they were
  2. When you compare Ocado Retail to other online grocers they are big, with £1.76 bn turnover in 2019. Sainsbury’s and Asda make similar turnover online, while Tesco makes more. However, when you compare Ocado Retail to other supermarkets’ total turnover they make significantly less. Tesco made £52bn turnover in 2019. This means big suppliers are going to be more loyal to other supermarkets.
  3. The third reason is surprising as it has always been seen as Ocado’s core strangth – it’s technology. Ocado are considered so advanced other frocers in the US, Canada, France, Italy etc are all buying their expertise and tech. Yet they are having problems keeping their site up and have admitted “technical problems” (see above).
    • I worked with Ocado an age ago (when they still had 4 founders) and they were always hugely dedicated to building their own tech from the ground up. Maybe this has backfired with developers off work and no software companies to lean on. e.g. Tesco, Asda and Sainsbury’s all use Oracle software for their van routing and scheduling. I would imagine Ocado developed their own. Maybe that was why they had problems with their “Reserved” slot booking
    • One of the founders (who has since left) said over and over that “Ocado did not sell a single cauliflour for over a year”, implying everything was well planned and robust. No one could have forseen the virus having so much impact, but are Ocado running too lean and maybe their famous robots are not able to adapt as quickly as the less efficient humans running other supermarkets’ supply chains? Only Ocado know for sure…