04 Dec Ocado get its first international deal with Casino
Casino group (£ 31.7bn turnover in 2016) is teaming up with the online-only UK grocer and tech provider Ocado. The alliance aims to develop Casino online sales, starting with one of its subsidiaries: Monoprix.
Ocado Solutions (the tech sister-company of Ocado) provides AI-based logistics optimisation technologies to major retailers in the UK such as Morrisons. The agreement with Casino Group includes building an automated warehouse in Paris area. What does it mean for both businesses ?
A NEW WAREHOUSE FOR CASINO, A NEW DISTRIBUTION
As part of the deal, Ocado will support Monoprix’s growth by investing in the construction of an automated warehouse wich they expect to finish within two years. Prior to expand to other areas in France with other warehouses, this first center will serve the Greater Paris area, the Normandie and Hauts de France Regions. This new agreement will also enable Casino to get access to Ocado’s front-end web site functionality, last-mile routing management and big data. A strategic move for both actors, who could reshuffle the cards of home delivery and food shopping in France.
To start, 50,000 food items will be offered to customers in the Greater Paris area with precise and fast delivery at home through the platform. As they did for Morrisons in the UK, Ocado Solutions aims to allow Groupe Casino to build their online grocery offer in a way that is profitable and sustainable for customers, suppliers and shareholders. Moreover, this partnership seems even more relevant for Monoprix as its online food category is running slow and they do get the majority of its online sales from home delivery. Monoprix’s clients prefer to receive at home their weekly baskets or booking in-store collection for smaller orders.
FIRST INTERNATIONAL DEAL FOR OCADO
Ocado which has been distributing Waitrose’s products since 2002, broke new ground in 2013 by signing with another UK retailer, Morrisons, managing its Ecommerce website and logistics. Since, Ocado has continued to increase its market share thanks to double-digit growth, despite the arrival in 2016 in the UK of Amazon Fresh. Today Ocado gets its first international deal with Casino which is expected to be the first of many.
Although French mass retailers have visited Ocado’s warehouses to acknowledge the efficiency of its execution and degree of automation, one question remains. Why did retailers hesitate to get technology from the tech UK leading provider who invested millions in R & D? If one day a retailer wants to stop using its technology, it’s worth noticing that Ocado retains machines, processes and software bricks. However, there are many benefits: the setup of Ocado’s technology requires relatively low fees, orders processing time is ultra optimized, the number of treated orders greatly increased, Ocado is responsible for maintaining and improving like the cloud platform, etc.
ANNOUNCEMENT OF A NEW PICK&PACKING TECHNOLOGY FOR OCADO
Ocado also took the opportunity to announce at the same time a new robotic technology for pick and packing that would be used in its warehouses. This new system is based on computer vision and works with a vacuum cup attached to the end of an articulated arm that is in turn connected to an air compressor. By creating a suction, it can lift an item and place it from storage crates into a delivery crate at the pick station. Previously, Ocado Solutions has developed other robotics systems such as SoMa and SecondHands.
Finally, 2017 has been a rich year for alliances in the grocery industry. The agreement between Ocado and Casino occurs indeed few months after Amazon announced the aquisition of Whole Foods and just few weeks after Auchan decided to partner with Alibaba on the Chinese market (see our related article HERE).