Ocado Strikes Blow To Groupon Rival Crowdity

June 24th, 2011. Posted by Dominick Soar

Group buying website Crowdity has just suffered a huge blow to its already mammoth quest to take on market leader Groupon, at the hands of Waitrose delivery service Ocado.

Crowdity

The whole idea of group buying is based on a simple principle, described by Crowdity’s own CEO : “We bring people together to buy, meaning we can go to businesses and negotiate a large discount that you wouldn’t be able to get alone.”

Sounds great doesn’t it? Well that’s exactly what thousands of new customers thought when they came across Crowdity’s Ocado deal, offering £40 worth of grocery shopping for the price of £20. The offer, to be registered for on 22nd June and redeemed by 30th June, was part of Ocado’s current scheme to try and attract new business (the offer isn’t available to incumbent customers).

Too Successful?

Clearly Crowdity and Ocado weren’t prepared for the response their offer was to receive. Around midday today, Crowdity sent out this apology email on behalf of Ocado:

“Ocado Apology

‘Ocado were only able to offer a limited number of these vouchers. Due to the success of the offer and the widespread distribution of the offer on other forums, this number was exceeded on the first day, rather than on 30th June as originally anticipated. As such, no new redemptions of the voucher can be accepted after 23rd June. Other acquisition offers are available and will be available in the future. Sorry for any disappointment this may cause.’

Team Crowdity would also like to echo Ocados appology. We are all deeply upset about the whole situation and can’t explain to you how sorry we are.

Sincere Apologies

The Crowdity team”

Buy together! (But only some of you…)

So, a service that is entirely built around the very concept of consumers being able to obtain large discounts if they share the offer with enough of their peers, has been defeated by its own success.

The lesson? If you are going to take on the biggest social-buying service out there, don’t allow your suppliers to limit the quantity of redemptions and undermine the fundamental principle of your business.

We will of course be using Brandwatch to keep an eye out for any interesting reactions…

A potential customer

I was one of those who took up the offer….
was going to use tthe offer at the weekend
I just feel Crowdity are just another clone…heading in the same way as groupon….a ponzi coupon scheme business…guranteed to fail
http://www.brandwatch.com Dominick Soar

Thanks for the comment. Funnily enough I was one of them too…I’m not sure who’s fault it is – Ocado for underestimating social media or Crowdity’s for not managing their expectations?
Donna J

Crowdity have issued a statement saying Ocado never told them they were going to withdraw the offer or that Ocado would limit the amount of people able to use the code – seems the blame falls with Ocado.

As a user of both Crowdity and Groupon I’ve purchased regularly with both, this is the first time I have been dissapointed! Such a shame that such a large brand as Ocado have ruined the reputation of a company by panicking over profits!
A potential customer

I would say it`s both the companys fault, coupon buying/giving media has been around a while…it also not rocket science to make sure it`s not a generic code!
http://www.brandwatch.com Dominick Soar

@Donna J

Hmm, I wonder whether Ocado are happy to accept that? Some interesting conversations going on between the two companies no doubt…

@A potential Customer

Agreed.
Kungfujo

It was doomed to fail the minute that the voucher codes were all the same. Anyone who took up the offer should have been given a unique number that only worked once. That way once the limit was hit then they could have notified people immediately rather than give people the expectation that they did.

Sounds like poor management all round to me. However I was one of the lucky ones who placed my order on Ocado immediately and saved a massive £40 all round.
http://www.climbdigital.co.uk Mark Cann

Couldn’t they have a limit on these, like when its gone its gone. Surely it can’t be that hard to get the technology in place to avoid this situation, as its happened so many times before! Also do you think they have a conversation about how many customers they actually want, instead of saying we’ll deliver as many as you can’t handle?
Nathalie M

Ocado cannot be naieve to believe that the offer of a £20 voucher would not be popular. Surely someone should have had the brains to make it a limited numbers voucher, say the first 2500 people to register?

I am disappointed that the Ocado decided to refuse to accept any vouchers after 1 day and did not annouce this until a day AFTER they decided this.
http://www.brandwatch.com Dominick Soar

@kungfujo

I would agree with the poor management, I can’t see how Crowdity can wash their hands of it and completely blame Ocado – they should have safeguards to anticipate this kind of occurence.

@Mark Cann

Well put. I have seen a lot of vouchers from Ocado around lately, so they are obviously trying a big push to spread the word and attract new customers. It seems they may are successfully spreading the word, but not the kind of word that will be winning them too many news fans…
http://www.brandwatch.com Dominick Soar

@Nathalie M

The fact that they told people after it had been stopped rather than giving any prior warning is certainly one of the main problems. You wonder how many people they expected to sign-up, and how exactly they made those forecasts (if any)…
Nathalie M

apparently now you can use the link for a new voucher offer – the catch is now you have to spend £75 to get £20 off.
http://www.netimprovement.co.uk Lee

If Crowdity want to make amends and stick it to Ocado in the process, they could do worse than knock on the door of Waitrose who have recently launched a rival delivery service and keen to build an online customer base of their own.
chris

I think sainsburys,asda etc should benifit from this and offer crowdity to issue a code for the £20 off £40 spend to spend at asda etc but make sure they have different codes per person.
Jane

Sorry Ocado, I lost my expected discount, so you will not get my custom. I will stick with Waitrose.
Tom

What a shambles. No counteroffer or gesture to apologise. I shall not be returning to Crowdity (crap name anyway) again or Ocado, and I shall stick with Tesco.com to deliver my food. Whoever the blame lies with it’s not good enough.
Mickey

I’ve heard the marketing people at Ocado are hard to work with.
V St Clair

I signed up for the voucher on the 22nd, tried to redeem it the next day, the 23rd, but the site just said the voucher had expired. I had been looking for a good online food store, the products were good, so I would have been a regular customer. Now I wouldn’t touch them with a bargepole. This is one they have lost to the competition. Shame on them.
Leo

Problem is that as soon as the voucher info hit MoneySavingExpert and other such websites, it was bound to be a huge success – they should have anticipated this following on the Tesco double the difference if cheaper elsewhere debacle.
The Knobs

“Sorry Ocado, I lost my expected discount, so you will not get my custom. I will stick with Waitrose.”

I thought Ocado was Waitrose’s delivery service.
CJ

I emailed Ocado with a formal complaint following the apology email from Crowdity and I was then offered £20 off a £75 shop. I then complained further and I have just received a free £20 Ocado voucher with no minimum spend! Which is even better than original offer! Excellent.
IG1

Crowdity lock down Tesco who step in to honour custy’s let down by Ocado…

£20 off a £40 spend

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