Ocado Defies Amazon Fresh and Grows to £1,27 Billion (+15%)

Amazon Fresh launched in the UK last summer. How did Ocado do, now that Amazon Fresh is competing with the UK online supermarket?

In the past financial year, Ocado increased revenues by 15% to £1,27 Billion. See the official preliminary results for 2016 (PDF):

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For some more insights also have a look at the highlights, the ‘Chief Executive Officer’s Review’:

We also extended the scope of our agreement of services to Morrisons.com, and advanced discussions with multiple potential international partners to utilise Ocado Smart Platform. […]

This progress has been made in a UK grocery market that has faced significant challenges throughout 2016. Intense competition, influenced by continued changing trends in customer behaviour with ongoing shifts to using discount and smaller format stores and online, has driven sustained price deflationary pressures across the grocery industry. Input cost inflation, largely fuelled by labour cost rises, and more latterly the impact of currency devaluation following the EU referendum, has added to the challenging environment and resulted in margin pressure and uncertainty across the industry. […]

Mobile has continued to grow in significance with over 55% of all orders at Ocado being checked out using our latest apps and browsers on mobile devices. […]

In June 2016 we launched a ‘Supply Ocado’ entrepreneurship portal, which allows potential suppliers from businesses of all sizes, from across the globe, the opportunity to access our buying team and apply to supply Ocado – with feedback provided to all applicants. […]

Our bundled customer benefit membership scheme, Ocado Smart Pass, continued to be popular this year, with over half of regular sales conducted with Smart Pass customers. Smart Pass offers customers multiple benefits including free deliveries whilst enabling us to drive customer loyalty, shopping frequency and ultimately increase total spend per customer.

(Highlights by me)

Ocado is working on robotic arms for its warehouses that can handle delicate items like fruits:

While there are many advantages to using automation and fleets of robots in large warehouses, the machines aren’t quite up to human standards in some regards. Using robotic arms to cart heavy boxes is one thing, but delicate goods or odd-shaped items — such as loose fruit and vegetables — are a little trickier, as they can be easily damaged.

With that in mind, Ocado has been working to solve this problem through the SoMa (software manipulation) project, a Horizon 2020 program for robotics research and innovation funded by the European Union. Through SoMa, the aim is to develop “simple, compliant, yet strong, robust, and easy-to-program manipulation systems” to enable “robust grasping” in dynamic environments.

Today, Ocado is lifting the lid on some of the progress it’s made, in partnership with Technische Universität Berlin (TUB), using the university’s RBO Hand 2

Another area where Brexit is not helping Ocado.

Ocado is working on becoming a technology supplier to other online supermarkets, but is so far failing to secure even one deal. Reuters:

British online supermarket Ocado said it was increasingly confident that it would deliver an overseas technology deal first targeted before the end of 2015.

Partnerships with retailers in north America and western Europe are seen by analysts as the key influence on Ocado’s stock market valuation, but the company has been testing investors’ patience with its failure to clinch a deal. […]

Ocado is courting international supermarkets to buy its proprietary equipment and software so they can develop their own online grocery operations. Britain leads the way in online shopping and home delivery of the weekly groceries.

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  1. […] ​More on this topic: ​ * ​Amazon’s Big Advantage in the Online Grocery War with Walmart * Kroger, Uber and The Tripartite Nature of Online Groceries * ‘AmazonFresh Pickup’ is the Tech Giant’s next Fulfillment Center Concept * The Billion Dollar Race of Instacart and Postmates (vs. Uber and Amazon * Blue Apron and HelloFresh Are at Subscale to Expensive, See Cooling Growth * Ocado Defies Amazon Fresh and Grows to £1,27 Billion (+15%) […]

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  2. […] Ocado Defies Amazon Fresh and Grows to £1,27 Billion (+15%) […]

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  3. […] Ocado Defies Amazon Fresh and Grows to £1,27 Billion (+15%) […]

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