Down under: Coles launches grocery subscription service

Coles store. Photo: Nils Versemann
The Australian supermarket chain Coles launches a new subscription service for online grocery shopping that allows customers to make unlimited orders for a flat monthly fee.
By Reidar Molthe

11 November 2019 12:39

Down under: Coles launches grocery subscription service

Coles is taking its online grocery offering a step further with the launch of a new subscription service that allows customers to make unlimited orders for a flat monthly fee.

Customers must spend over AUD 100 in each transaction to qualify for Coles Delivery Plus, which gives the option of delivery any day of the week for AUD 19 a month, or mid-week delivery from Tuesday through to Thursday for the lower rate of AUD 14 per month.

Coles Online general manager Karen Donaldson says to Inside FMCG-journalist Ruth Hogan that the new service is aimed at “time-poor” online regulars who are looking to save on delivery.

Delivery Plus

“On average, the cost of a Coles Home Delivery window is AUD 10, depending on location, time of day and length of delivery window chosen,” Donaldson says. 

“Delivery Plus will allow customers who regularly shop online to save hundreds of dollars a year and help them manage their family budget by knowing exactly how much they will pay on Coles Online delivery each month,” she argues.

The two leading grocers in Australia, Coles and Woolworths, have been ramping up investment in online this year, in a bid to retain and gain consumers as new players like German Kaufland is entering the market “down under”.

In March, Coles scored an exclusive deal with the world’s leading online grocery platform, Ocado, which has previously signed lucrative deals with some of Britain’s biggest grocery retailers including Waitrose and M&S.

Takeoff in cooperation with Woolworths

But Woolworths hasn’t been resting on its laurels. A recent partnership US based Takeoff Technologies Ltd. is expected to propel its online grocery operations with the addition of compact, automated micro fulfillment centers at a number of its supermarkets.

Woolworths says the new centers will allow the retailer to deliver ultra-convenience at a local level and be even closer to the customer for that last mile delivery.

Woolworths is also planning to bring circular shopping to its online service through a partnership with TerraCycle’s Loop platform. By mid-2021, shoppers will be able to have products such as washing detergent, shampoo, juice or ice cream delivered to their door in reusable and refillable containers, which can be collected for cleaning and refilling after use.

First month free

In a proposition to get customers onboard with Coles new subscription service, the retailer is offering the first month free, with automatic payments commencing the following month. But customers can cancel the auto-renewal of their subscription at any time.

For a limited time, Delivery Plus will also cover the fees for unlimited Same Day Deliveries.

Many are still skeptical about grocery shopping and e-commerce, but in practice there are very many chains in Europe, the United States and for that matter Australia and China that invest heavily in home deliveries and/or pick-up points.

Market shares in Australia

  • Woolworths Group AUD32.2 billion (35.7%)
  • Coles Group AUD30 billion (33.2%)
  • Aldi AUD11.9 billion (13.2%)
  • IGA AUD8.4 billion (9.3%)
  • Other supermarkets AUD7.8 billion (8.6%)

Source: Choice, Australia, a consumer advocacy group Independent and member funded

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