The Ocado and M&S Deal – Modernisation in Traditional Businesses

Keywords – Ocado – M&S – Modernisation in Traditional Businesses

M&S has agreed to pay Ocado between £800-900 million to acquire a 50% stake in a new partnership, basically granting M&S the ability to deliver food.

This puts a stop to the partnership between Ocado and Waitrose, the former of which was paying upwards of £15 million to the later for items sourcing. Online shopping has been on a rise for ages now and finally, all major UK supermarkets have direct access to fulfil this side of the business. (I have been buying my groceries online since 2012).

But, more importantly, a brand that claims to personify Britishness is striving towards modernisation. In short, there is hope for all of us.

Modernisation in Traditional Businesses

Let’s take a step back.

How do you convince a traditional business to modernise?

In our experience, this is one of the most daunting tasks. We dread this to a level where we wrote a whole blog on the importance of knowing who not to know with. (You can read the blog here).

Based on the face value of the M&S and Ocado deal, we would have had to reconsider our approach to targeting. If it is possible to take someone over the line with considering modernisation, we could be able to target a wider audience. (We are currently targeting growing and future-oriented businesses).

But, the management of M&S did not wake up one day and decided to enhance their online and delivery options. There are multiple steps in the middle that are hidden from the public image.

Incremental Change

At Marketing Voice, we have realised that it is quite hard to convince someone to change to a great degree. Therefore, you need to think from the perspective of winning smaller battles. (We talk further about this here).

If you dig a bit deeper, M&S is reported to be already under a £1.8 billion debt. With this amount of debt, they either had to wait for a slow death or take an even bigger risk with the accumulation of further debt. But, the bigger risk may pay off or at least extend the life of the business.

(If we go into the financial side of this deal, this blog won’t be enough).

In the simplest form, multiple reasons; with the biggest reason being the end of business; pushed M&S over the line.

And, we see this again and again in businesses. Most of the people will not change until they are pushed to the wall.

We hope you don’t need death as an encouragement for modernisation and take the future of your business more seriously.

And, if you take the future of your business seriously, get in touch with us today to strengthen your online and strategic presence.

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