11: Automating fulfillment with Ocado’s grocery technology

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David Hardiman-Evans, SVP, North America for Ocado Solutions, dials in from the UK to speak with Sylvain and Mark about how grocery technology is reshaping the landscape.

David talks about Ocado’s origins in 2000 as an online-only company, which aimed at the outset to find a different way of operating. Their approach includes an emphasis on aggregation, automation and grocery technology, for the purposes of optimizing operations and delivering a compelling customer experience.

Much of the benefit to Ocado’s grocery retail partners is around cost reduction, which is necessary to run a sustainable online business. David illustrates with the following example:

“What are the benefits on the economic side? Well one, with greater visibility over inventory control, better forecasting, you can drive much lower waste, for example. Typically in the grocery industry, waste is running at two and a half to three and a half percent of sales. Certainly in our own experience in our UK retail business, it's running at 0.4% of sales, so very significantly less. And that for many grocers is the difference between running a profitable and unprofitable business.”

In terms of customer experience, David notes that products can be fresher than the shopper could get when going to the store themselves.

Sylvain asks what retailers need to do to adapt to these changes in grocery technology. David observes that it’s often a shift in mindset, which then leads to a forensic approach to each part of the value chain, and provides some examples.

The conversation turns to a comparison of the markets and the grocery shopping experience in North America versus Europe, including both the differing attitudes towards pickup and delivery, and the similarities between customers in all markets. In particular, David addresses shifting attitudes towards grocery delivery as that technology improves.

Sylvain asks about the technical maturity of Ocado’s grocery retail partners. David observes that they tend to be leaders in their markets, with strong supplier relationships, great brand recognition and solid customer trust. “They know their customers well, and they have good understanding and knowledge of customer behavior and trends in their local markets.”

Another very powerful trait, notes David, is that Ocado’s partners are all forward thinkers. Instead of thinking reactively about how to protect their position, they look at what they can do to drive the opportunity.

Tune in to the full episode for more insights into online grocery fulfillment, automation and more.

Check out more great episodes in season 4:
Grocery Retail Valuation with Dan McCarthy
Grocery delivery marketplace dominance with Rick Watson
Grocery retail strategy and execution that grows shopper loyalty

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