Reuters, Ellis, England, October 25-In a warehouse on the outskirts of London, thousands of robots swarmed to dance on top of a grid the size of six football fields, racing to the British capital. Of shoppers supply groceries.
Washing machine-sized robots built by the pioneer of British online supermarket Ocado (OCDO.L) have caught the attention of international retailers. These robots have struggled with worker shortages and rising wage demands in the post-pandemic world.
It has reached an agreement to provide its technology to supermarket groups in eight countries, including the United States, Japan and France. In the last three weeks, it has received potential customers from five other countries.
Luke Jensen, chief executive of Ocado Solutions, the London-listed company’s technology arm, told Reuters that they wanted to automate the entire process from farm and factory gates to shoppers’ refrigerators, while also increasing what it called the Customer Fulfillment Center (CFC). ) The productivity of the site.
With plans to eventually automate most manual warehouse tasks in place, Ocado's success could have a profound impact on the global retail workforce.
"In ten years, we expect that most low-value-added tasks will be performed by technology, and CFC's work will focus on supervision and engineering," he said.
Ocado was founded 20 years ago by three former Goldman Sachs bankers and has long faced doubts about whether it can achieve sustainable profitability. According to data from the analysis company Ortex, it is usually the most short-selling British stock in 2017 and 2018 .
But international transactions have changed the subject: Since the first major partnership was reached at the end of 2017, its stock price has risen by about 700%, and its market value has reached US$19 billion.
It needs to be realized now-before Ocado starts to earn some sales, the profit of the technology department will be hindered by the cost of establishing partner sites.
In its largest venue, the 310 million U.S. building in Ellis, southeast London, more than 2,000 robots rapidly rotate around a steel and aluminum grid at a speed of 4 meters per second, replacing humans who once retrieved groceries.
The workers below are packing goods, but the robotic picking arm is learning this task by machine and will eventually replace them.
The arm can already handle 15% of the Ocado product line. The company expects this number to reach about 50% within two years. In the long run, 80% is "absolutely feasible." Jensen said retail partners will use it within three years.
It is also working on the automation of goods reaching the CFC and loading customer orders onto delivery trucks, and ultimately hopes to use autonomous vehicles to move goods between suppliers, warehouses, and homes.
On October 13, 2021, a robotic picker was seen in the Ocado warehouse in Erice, London, England. REUTERS/Paul Childs
Although Asian retailers such as JD.com (9618.HK) have automated the entire warehousing process, IGD analyst Simon Mayhew said that Ocado is a leader in grocery automation, where commodities are fragile and may require refrigeration or freezing temperatures.
Jensen said automation is “retailers’ top priority in boardrooms”, not only because of a shortage of workers, but also acknowledging that the pandemic has changed the dial of online groceries.
Analysts expect that in the medium term, online ordering will account for 15-20% of total grocery sales in major markets.
Many grocers have concluded that in densely populated areas, the old model of single store picking and online order delivery may not be the best use of funds.
Companies such as Wal-Mart (WMT.N) and Tesco (TSCO.L) have been cooperating with technology groups such as Dematic, Fabric, and Alert Innovation, focusing on small micro-fulfillment centers that are usually close to stores.
Norway's AutoStore is a closer competitor to Ocado, cooperating with British supermarkets such as Asda and Gucci.
However, although retail giant Amazon (AMZN.O) has automated many of its operations, its Whole Foods employees still mainly select online orders in stores.
Ocado said that although other companies can provide services such as online store design, routing systems, or warehouses, only it can combine them and provide indicators such as food waste, which accounts for only 0.4% of sales. The proportion of most supermarket groups is 2.5%-3%.
Erith's productivity is already 25% higher than Ocado's first UK CFC, and Jensen believes that there is still room for a further increase of 50-70%.
Bert Flekinger, head of the Strategic Resources Group of a retail consultancy, said that Ocado's success in the United Kingdom and the United States has gained credibility that it can do business anywhere.
It has reached cooperation with Kroger (KR.N), the largest grocery retailer in the United States, Casino (CASP.PA) in France, Aeon (8267.T) in Japan, Coles (COL.AX) in Australia and Alcampo in Auchan in Spain. protocol.
At Erith, Jensen is already considering introducing Ocado's technology from the grocery retail field to general merchandise.
"In the long run, this is definitely a choice," he said.
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