Waitrose versus M&S: The brand battle for Ocado shoppers

From next week the middle classes will have a condundrum on their hands. Ocado is ending its 18-year partnership with Waitrose, replacing it with Marks & Spencer. Percy pigs are going online and both supermarkets are battling it out to be middle England’s favourite online supermarket.

Already consumers are lamenting the end of “quinoa and pies”, with many devastated by the uncoupling of Ocado and Waitrose. The two brands have become synonymous with each other, but week M&S is hoping to change that.

The Ocado tie-up is a key part of its strategy to expand its food business and boost profits. Previously, customers could buy only a limited range of food online, mostly items such as wedding cakes, but it now wants to beef up its offering to families.

And with coronavirus pushing grocery shopping online, winning in ecommerce is more important than ever.

There are of course differences in range, customer experience and deliver options. But in terms of brands, which one is ahead and might convince shoppers to use their online service?

On the surface, the two brands are not dissimilar with both operating at the more premium end of the market and hoping to appeal by focusing on quality. However, when analysed more closely it appears M&S has the stronger brand.

According to data from YouGov BrandIndex, M&S’s score for overall brand health is 37.6, top of the list of supermarkets, while Waitrose comes in fifth – behind Aldi, Lidl and Sainsburys – with a score of 28.2.

M&S also beats Waitrose when it comes to quality perceptions with a score of 62.6 compared to Waitrose’s 52.5. M&S also does well on impression, which measures whether people have a generally positive or negative feeling about a brand, with a score of 49, while Waitrose comes fourth with a score of 37.4.

When it comes to which brand consumers are more likely to recommend, M&S again beats Waitrose with a score of 32.5, while Waitrose comes seventh with 22.9.

Metric	M&S score	Waitrose score
Index	37.6	28.2
Quality	62.6	52.5
Impression	49	37.4
Recommend	32.5	22.9
Consideration	23.7	18.2
Purchase intent	3.7	4.6

However, it is a slightly different story when it comes to actually buying from the two brands. Here, Waitrose has a purchase intent score (whether a brand is someone’s first choice to purchase from) of 4.6 to M&S’s 3.7 .

Yet the scores are reverse for consideration (whether someone would consider purchasing from the brand in future) with M&S performing better with a score of 23.7 to Waitrose’s 18.2.

It’s clear from these scores that M&S has a brand edge over Waitrose at least, and possibly for many Ocado shoppers sticking with what they know will prove less complicated than making the switch to Waitrose.com.

Quality versus value

The two brands are taking different marketing approaches to attracting customers as well. Waitrose is doubling down on its current customer base with a focus on communicating its quality.

It is also clearly still going after the more premium end of the market with a £60 minimum spend, compared to £40 on Ocado.

M&S, meanwhile, is focusing on families and tackling perceptions on value with its ‘Remarksable’ campaign. The aim is to open up its food offering to a wider audience, which could be a smart move as we enter a recession and consumers tighten their belts.

Value is likely to become increasingly important in the coming months, with Tesco already showing its hand by launching a promise to price match with Aldi. Despite difficulties during the pandemic as people switch to online and back to doing bigger, less frequent shops, discount is still expected to be the fastest growing channel in 2021 and 2022, according to figures by IGD with the segment  forecast to rise by 25%, or £6.3bn.

M&S is also hoping to compete by broadening its range. It is already stocking up on shelf staples with Ocado, with varieties of pasta, rice and other food cupboard essentials already exceeding the numbers that are available on Ocado with Waitrose, according to ecommerce analysts Edge by Ascential.

It studied the products on Ocado last week and found clear differences in the brands’ approach. Waitrose began discontinuing products on Ocado from the beginning of the year with M&S products already previewed on the site giving an insight into what each brand will prioritise.

Edge by Ascential digital shelf analyst Chris Elliott tells Marketing Week that store cupboard essentials and alcohol appear to be clear areas of focus for M&S. However, he wants it may struggle in the home care category – which includes cleaning materials, bin liners and laundry detergent, which is says is “not very well developed compared to a Waitrose”.

Waitrose, meanwhile appears to be concentrating on experience. It is facing a tough time as it needs to convince shoppers that its online store will provide the same customer service as Ocado.

The retailer has been attempting to do this through a sizeable investment in distribution centres as it looks to keep up with demand but it will take some time to compete with Ocado, with many customers likely to focus on the ease of shopping with Ocado.

The accelerated shift to online

This Ocado switch was always going to be an important moment for both brands but since Covid-19 sales in the the online grocery market have skyrocketed, making it all the more important. The UK grocery and food market is set to grow by 10% to £211bn through 2022, according to IGD.

Coronavirus has accelerated the shift to online, with those who served shoppers during lockdown likely to keep their loyalty. 2020 is likely to see the fastest growth for this channel ever, with sales up 59%, equivalent to £7bn, with the category’s share of total sales rising from 6.2% in 2019 to 8.9% in 2022.

Ultimately both M&S and Waitrose have different issues to overcome. Waitrose needs to convince shoppers to switch from the convenience of Ocado while M&S is working hard to ensure it offers value for money and a wide enough range.

Both brands will be ready on 1 September, when the fight for customers will really begin.