Ocado JV too little, too late for M&S, GlobalData

A M&S and Ocado delivery joint venture will not save the former’s struggling food division, according to GlobalData.

M&S CEO Steve Rowe has been pursuing a 'digital first' strategy as he looks to turn around the struggling retailer’s fortunes. But although a partnership with Ocado may seem like a step in the right direction, this attempt to rapidly gain momentum in the online market may be a misstep with short-term gains potentially outweighed by a long-term deterioration of brand awareness, says Thomas Brereton, Retail Analyst at GlobalData.

With Ocado’s 'open-arm' approach to partnerships, it is an understandable jump for M&S to want to join forces with it. In doing so, the latter might hope to simultaneously take a large slice of the online pie in one swoop, and put a tick in the ‘digital first’ box, having a tech-savvy ally in its back pocket, as well as damming one of Waitrose’s revenue streams by removing it as Ocado’s predominant supplier.

But this would be the wrong tactic, Brereton believes. “The Ocado-Waitrose partnership began over a decade ago during the infancy of online food delivery, and M&S is now looking for a foothold in a much more evolved online market,” he concludes.

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