A recent report from Kantar Worldpanel revealed that the global e-commerce grocery market has experienced a 15% growth in 2016 and is now worth over $48bn in sales. The research also showed that Great Britain is the world’s third largest market for grocery e-commerce, outstripping the United States by almost five times in value (6.9% versus 1.4%, respectively).
Given the latest slowdown in the overall grocery market, the online segment continues to be the only major agent for growth in the near future, achieving gains of 70% over the next five years in the UK alone.
One explanation for this rapid expansion is that online shopping creates and enhances brand loyalty. Many studies have shown that once consumers try online shopping, they are very likely to continue coming back; this is particularly true in the UK, where almost a quarter of all spend is through e-commerce. Shoppers also generally spend more online than in bricks and mortar-type supermarkets; for example, a typical Ocado basket in 2016 was worth £109, which is more than twice what consumer spend online on average (£49).
However, a Daily Mail article published in October highlights the perils of entering the online market unprepared: the soaring grocery delivery popularity left a combined £500m black hole in the pockets of several other large UK supermarkets.
Currently covering over 70% of the UK population, Ocado offers an unrivalled combination of choice, competitive pricing, and industry-leading service that has contributed to an increase in average orders by nearly 19% – Ocado’s best volume performance in more than five years.
Central to this success is looking after our shoppers better than anyone else. We do this using a unique approach in the online grocery market, one where technology innovation is pervasive across every aspect of the retail operation and beyond. Our entire e-commerce platform, from our Ocado.com web shop and mobile apps to our customer contact center and fulfilment channels, is infused with the kind of technology innovation Ocado has been pioneering since the early days of online retail.
By having the Ocado Technology division and the engineering team working closely with the retail business, Ocado has been able to find efficient ways to expand its business, reduce operational costs while also providing the best customer service in the online retail industry.
Looking to the future, the Ocado Smart Platform (OSP) will enable us to improve our existing operations in the UK and also offer our technical know-how and platform to other retailers worldwide. The Ocado Smart Platform will offer a faster, flexible, more cost-efficient and low-risk way of launching or improving online grocery businesses.
By adopting this end-to-end solution, Ocado and its partners will be uniquely positioned to take advantage of the growing global trend for online food shopping in what is the world’s largest retail segment.
Alex Voica, Technology Communications Manager
Alex Voica November 9th, 2016
Posted In: Blog
One of the areas where IoT is set to make a huge impact is the online grocery retail sector. This comes at a time when more consumers are starting to understand the benefits of shopping online.
For example, Ocado has an active customer base that counts over 500,000 users; in addition, we’ve noticed that customers tend to stay loyal to Ocado over time thanks to a combination of great customer service and an easy-to-use shopping platform.
However, we believe there are several areas where IoT is helping us improve efficiency, reduce waste, and enhance the shopping experience for our customers. The two examples mentioned below illustrate some of the projects we’re actively working on and the initial results we’ve achieved thanks to the amazing team of engineers working at Ocado Technology.
The Ocado Smart Platform (OSP) represents the most important breakthrough in online grocery retail. One of the many innovations implemented by the OSP is the use of robots for collecting customers’ groceries; you can find a diagram of how that works below:
To make such a complex system of software and hardware function correctly, we needed a new kind of communications protocol to enable thousands of robots to rapidly communicate over a wireless network. We’ve therefore partnered with Cambridge Consultants to build a wireless system like no other.
This new network is based on the same underlying technology that connects your 4G mobile phone to the internet but operates in a different spectrum that allows thousands of machines to talk to each other at the same time. Each robot integrates a radio chip that connects to a base station capable of handling over 1,000 requests at a time. A typical grocery warehouse can thus use up to 20 base stations to create a small army of connected robots on a mission to ensure that your delivery gets picked in a record time of less than five minutes.
Moreover, since this system uses an unlicensed part of the radio spectrum, it could potentially be deployed for many other IoT applications that require low latency communications between thousands of devices. In addition, it can be deployed quickly too, as there’s no need to submit any form of paperwork related to standards compliance.
We employ a large fleet of vans to deliver orders from Customer Fulfilment Centres (CFCs) to Ocado customers who purchase their groceries online. In order to manage this fleet efficiently, we equipped our delivery vans with a range of IoT sensors logging valuable information such as the vehicle’s location, wheel speed, engine revs, braking, fuel consumption, and cornering speed.
The vans then stream back this data in real time and also in greater granularity when they return to their CFCs. Ocado engineers then feed the data into our routing systems so the routes we drive tomorrow will hopefully be even better than the ones we drove today. We can also direct vans to park at the best possible location for a given time of day and take into account factors such as the current day of the week or school holidays.
At a time when inner city pollution is a growing health concern, reducing fuel consumption is not only a wise business decision but also an easy way to cut back on our carbon footprint. Furthermore, having a fleet of connected vehicles that is constantly exploring every corner of the UK enables us to gather lots of useful mapping information, including potential traffic jams and road closures.
This information could then be shared with other connected cars and help drivers manage their journeys more effectively. An example of such an initiative is the recent partnership between Mobileye, GM, Volkswagen and Nissan to create a set of crowdsourced maps that acts as the digital infrastructure for the self-driving cars of the future.
Alex Voica, Technology Communications Manager
Alex Voica September 22nd, 2016
Posted In: Blog
Our intention was to make it effortless for Ocado customers to shop without even needing to get their phone out.
The Apple Watch app serves as an extension to the iPhone app, offering some extra options the user can perform in mere seconds. Our main focus was on quick transactions.
For example, say you have an order booked but you forgot the milk. You use the Apple Watch’s dictation to search “milk” and our smart search will return the milks you order most frequently. Then you just tap the one you want, adding it to your order with our One-Click feature. There you go – milk ordered in three steps.
We also have a brand new feature for Instant Shop. Previously, we used your shopping history to suggest a shopping list. Now, we suggest a delivery slot too. So, for the first time ever, you’ll be able to do a grocery shop in just one tap.
You can also check your order status at any time.
As iOS developers, this was the first time we had the same code executing in two isolated environments at the same time. It threw up some issues.
While we have a good knowledge of when the app is running on a phone or when its been sent to the background, for the watch extension we have no such guarantees. This presents us with two problems: what happens if the extension runs longer than expected, and what if it’s killed instantly.
If the extension runs for a very long time, it complicates caching. We generally want to keep file access to a minimum, but if one execution environment (the iPhone) does something to change the contents of the file, there is no way for the other execution environment (the Apple Watch) to know it needs to refresh its cache.
The solution lay with a low-level interprocess notification system called Darwin (specifically we used the MMWormhole library which serves a wrapper around these low-level API calls). This allows us to send messages between the two environments, informing them of changes so we can keep everything in sync
The extension can also be killed in an instant – you really don’t want that to happen if its just sent a request to place an order! The solution is to leverage a very powerful API method openParentApplication:reply:
This simple but powerful method launches the iPhone app in the background, allowing us to execute vital or long-running operations within the iPhone’s execution environment, with the guarantee that these operations will be completed. The phone then saves the state of this operation to a file which the watch extension can read when it next starts.
So if someone’s arm gets tired and drops to their side, killing the watch extension, the vital checkout operation is still completed by the phone.
The next time the user looks at their watch app, it will show a message saying whether their request was completed.
We really had to take into account the physicality of wearing and using the device, even more than with the iPhone. Try looking at your wrist now for more than 30 seconds – you’ll find it gets tired pretty quickly.
We knew we had to make the user flow as speedy as possible, that the UI needed to be clean and clear, and things had to load very quickly.
What’s really exciting is that we still don’t know how users will take to shopping on their watch. We are able to track user actions, so it will be fascinating to see what features customers find most useful.
There was a lot of educated guesswork in trying to imagine the best use cases for the Apple Watch. We’re looking forward to hearing from customers about what they want, and seeing where we can take it next.
Tom Brennan April 24th, 2015
Posted In: Blog