DISCUSSION
Will Ocado’s robots help U.S. grocers solve their online delivery problems?
Written by RetailWire Staff
Photo: Ocado
There is the type of automation that leverages robots to make people's jobs easier, and then there is the kind that, through combining technologies, does away with human intervention entirely. One online UK grocer is aiming for the latter with its warehouse picking operation — and it may be getting close to succeeding.
Ocado, the world's biggest online-only grocer, has devised what a recent Forbes article describes as a "hive" filled with groceries in its warehouse. The football field-sized, three-foot high block of groceries is made up of thousands of stacked plastic boxes filled with different products. Hundreds of robots use machine intelligence to navigate the hive, shifting boxes and automatically picking orders. The only human job in the warehouse is that of baggers, but Ocado intends to do away with that side of the operation eventually. The company is preparing robots with softer "hands" that can carefully handle fruit for its new, larger warehouse.
In July, Ocado began holding talks with numerous U.S. grocers about possibly licensing the platform, Bloomberg reported. No specific grocers were named. The company's CEO indicated that Amazon.com's acquisition of Whole Foods had sparked more serious interest in automated operations among U.S. grocers.
Grocers have struggled with e-commerce, despite other segments experiencing huge growth in recent years. While e-commerce is projected to approach a quarter of all retail sales in the next decade, according to FTI, online grocery is only expected to expand from its current two percent of marketplace penetration into the mid- to high-single digits in the same timeframe.
Even Amazon has experienced difficulty in the space, having recently rolled back its AmazonFresh grocery delivery service in some markets. The move reignited longstanding questions about the feasibility of profitably offering grocery delivery at scale.
Whether next-gen warehouse automation will mitigate grocers' e-commerce difficulty remains to be seen. But Ocado is also working to automate other parts of the process, for instance with driverless delivery, in hopes of lowering labor costs, according to Forbes.