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How Ocado Technology is shaping the future of online groceries

How Ocado Technology is shaping the future of online groceries
(Image credit: Pixabay)

At Ocado Technology, we are the innovation factory behind the cutting-edge automation software and hardware powering retailers like Ocado.com. When Ocado started 20 years ago, it was with the vision to use technology to transform the grocery industry to make our customers' lives better. This was a great challenge - margins in the grocery industry are tight, and it’s a complex business getting groceries picked and perfectly delivered to customers’ kitchens. Today, the Ocado Smart Platform (OSP) has been bought by our partners across continents from Japan (Aeon) to the US (Kroger) to Australia (Coles) to France (Casino) and more. We’re building 54 (and counting) of our highly automated warehouses across the world for our partners.

There was no off-the-shelf product, so we have focused on building in-house, from scratch solutions to meet the complexities of actually moving, storing, sorting, picking, packing and delivering online grocery. Unlike general merchandise, grocery has three different temperature regimes, frozen, chilled and ambient. Delivering an order of ice cream and fruit to the customer in perfect condition is harder than delivering electronics. We’ve been developing advanced capabilities in both hardware and software, bringing together fields like AI, simulations, robotics and automation to solve many of these challenges.

We’ve been able to quickly make huge advances in this space because, unlike other highly regulated industries such as automotive or aerospace, the grocery industry enables a huge degree of experimentation, meaning you can learn incredibly quickly. We think of ourselves as a 20-year-old startup - we’re big on collaboration, and we embraced risk-taking from day one. This mindset is enabling us to shape the future of online grocery.

How does the Ocado Smart Platform work?

OSP is a unique, end-to-end ecommerce, fulfilment and logistics platform. It’s built on AI, ML, Robotics, Cloud, Big Data, and IoT. OSP spans a webshop, native apps and voice ordering, right through to our highly automated warehouses and a suite of smart software for a highly-optimized last mile.

What are some of the unique aspects of your platform?

In our fulfilment centers, thousands of bots move across a giant grid to pick customer grocery orders. This grid, known as “The Hive”, looks like a huge chessboard. Under every square is a stack of storage bins containing groceries. Orchestrated bots whizz around the grid at up to 4 meters per second, coordinated by our AI “air traffic” control. This year, we’ve also launched new robotic pick capabilities which actually pack items into customers bags using suction cup technology with computer vision.

This level of orchestration means we can pick a 50 item order in only five minutes and get food in from the supplier and out to customers in under 5 hours. This means that food is remarkably fresh when it arrives with our customers and in the last 12 months, only 0.038% of total products were wasted before getting to the end customer, compared with the industry average of 2-3%.

The last mile is powered by AI and ML to optimize many thousands of routes in real time, factoring in things like traffic, driver breaks and the size of every customer order to name but a few.

How has Covid-19 changed the landscape?

The last few months have obviously seen a huge acceleration in customers’ demands for online grocery. Retailers across the world expect this demand to continue. They want smart solutions to actively accelerate and scale their online offerings, so that they can provide a fantastic service to their customers at a time when they need it the most.

This means that from our side there’s no slowing down. We were really happy to launch two new customers’ online delivery offerings during lockdown - Casino in France and Sobeys in Canada, who are now delivering to customers via OSP.

Can you tell us about the areas you’re looking to innovate in next?

Looking to the future, we don’t like to stand still. We’re constantly iterating and optimizing all of the features of OSP to make sure that we’re delivering the best experiences possible, for our retail clients and for their grocery customers. A great example of this is some of the AI-powered, hyper-personalized product recommendation engines that we’ve implemented in our webshop, to help retailers to tackle food waste through better showcasing the most relevant deals for our customers. Another example is the new AI strategy we’ve developed to further optimize our slot booking and routing algorithms, so that delivery emissions can be kept as low as possible while maintaining tight one-hour windows for deliveries.

Our aspiration is to use technology and automation to change the way the world shops. Across Ocado Group we are continuing to invest in robotic picking, vertical farming as well as dark kitchens - technologies that we believe are going to play a major role in shaping the future of online grocery.

  • Hannah Gibson, Director of Product Management at Ocado Technology.
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