Here’s How Sainsbury’s Delivered Growth Through the Pandemic
The COVID-19 crisis posed significant challenges for businesses in almost every industry. Whether because those businesses were forced to close during lockdown restrictions, or because they had to stay open and continue serving customers during a pandemic.
One industry which had to keep operating was the supermarket business. People still had to eat, so making supermarkets safe for visitors became a serious operation. New queuing systems, restricting numbers in stores, installing screens to protect checkout staff, and more all had to be arranged in a short amount of time to keep people fed and healthy. And that’s before you even get onto the issues with panic buying and supply chains and making sure there was enough food to go around.
It’s little surprise therefore that we saw a massive surge in people ordering their groceries online, something supermarket giants such as Sainsbury’s were especially cognizant of.
Sainsbury’s
Digital sales have become a far larger part of the Sainsbury’s business model over the last few years. This shift has not only been driven by the coronavirus pandemic, but also by other factors such as the supermarket chain’s acquisition of catalogue retailer, Argos.
Many larger Sainsbury’s stores now have an Argos location built into them, where customers can browse its famous catalogue – amusingly dubbed the "laminated book of dreams" by one British comedian – and order products for collection there and then. Alternatively, they can order the products online and schedule a pickup time when it’s convenient – potentially when they were planning a supermarket shop anyway – killing two birds with one stone.
We can see this boost in the company’s latest financial figures. Total digital sales have risen by over 100%. Breaking this down into the different sectors of the business, online grocery sales have risen by 120%, Argos digital sales by 68%, and Smartshop – Sainsbury’s handheld scanner service where customers can scan goods as they shop and checkout in one easy step at the end – by a staggering 173%.
The boost to Smartshop use is particularly interesting as it seems likely the uptick is due to people trying to avoid the longer checkout queue wait times caused by reduced numbers of staff during the pandemic.
Argos is going to continue to be merged with Sainsbury’s stores to provide a seamless click and collect experience for customers. The store footprint of dedicated Argos stores fell from 570 to 401 over the year with plans to slash that number by three quarters to 101 by the 2023/24 period.
This drop in standalone stores will be compensated for by the number of Argos stores located in Sainsbury’s supermarkets rising. Smaller Sainsbury’s locations will have Argos collection points rather than full stores, and 32 new local fulfilment centers will keep goods flowing with a more cost-effective ecommerce logistics operation.
Delivery
Augmenting this increase in ecommerce activity, Sainsbury’s also recently announced the relaunch of its same day delivery service. The supermarket brand was forced to halt the service during the pandemic due to the sharp increase in online business meaning it couldn’t guarantee same day – or even same week in some cases – delivery.
However, now things have started to settle down once again, Sainsbury’s is confident enough to begin offering the service once again. Initially offered in 250 of its UK stores, the remaining 100 were rolled out at the end of October.
Customers who order before midday can get their order delivered that day if they select a slot for after 5pm, or after 4pm if they want to come into the store and collect their groceries themselves. Sainsbury’s also offers its Chop Chop one-hour delivery service which it has now expanded to another 25 stores, bringing the total offering this lightning-fast service to 75 stores across 25 cities. And, if that wasn’t fast enough, partnerships with third-party delivery firms like Deliveroo and Uber Eats is now allowing Sainsbury’s to offer 20-minute deliveries in 500 of its stores.
"Customer demand for shopping online and for getting groceries quickly and conveniently has grown significantly and we are committed to offering customers choice and flexibility – whether that’s within 20 minutes to their front door or picking it up at their local store on their way home from work," said Sainsbury’s Director of Ecommerce, Nigel Blunt.
Final Thoughts
The trend for faster and faster delivery times is driving significant change in the grocery business and we’re likely to see brands competing to outdo one another to get products to customers faster. Sainsbury’s is off to a good start and it’s encouraging to see this household name brand succeeding during this challenging time.
How to expand your delivery options is sure to be a hot topic at eTail Europe 2022, taking place in April at the Queen Elizabeth II Conference Centre, London, UK.
Download the agenda today for more information and insights.