Grocery retail looks to technology for future growth
A recent report from Kantar Worldpanel revealed that the global e-commerce grocery market has experienced a 15% growth in 2016 and is now worth over $48bn in sales. The research also showed that Great Britain is the world’s third largest market for grocery e-commerce, outstripping the United States by almost five times in value (6.9% versus 1.4%, respectively).
Given the latest slowdown in the overall grocery market, the online segment continues to be the only major agent for growth in the near future, achieving gains of 70% over the next five years in the UK alone.
One explanation for this rapid expansion is that online shopping creates and enhances brand loyalty. Many studies have shown that once consumers try online shopping, they are very likely to continue coming back; this is particularly true in the UK, where almost a quarter of all spend is through e-commerce. Shoppers also generally spend more online than in bricks and mortar-type supermarkets; for example, a typical Ocado basket in 2016 was worth £109, which is more than twice what consumer spend online on average (£49).
However, a Daily Mail article published in October highlights the perils of entering the online market unprepared: the soaring grocery delivery popularity left a combined £500m black hole in the pockets of several other large UK supermarkets.
The fusion of technology and retail
Currently covering over 70% of the UK population, Ocado offers an unrivalled combination of choice, competitive pricing, and industry-leading service that has contributed to an increase in average orders by nearly 19% — Ocado’s best volume performance in more than five years.
Central to this success is looking after our shoppers better than anyone else. We do this using a unique approach in the online grocery market, one where technology innovation is pervasive across every aspect of the retail operation and beyond. Our entire e-commerce platform, from our Ocado.com web shop and mobile apps to our customer contact center and fulfilment channels, is infused with the kind of technology innovation Ocado has been pioneering since the early days of online retail.
By having the Ocado Technology division and the engineering team working closely with the retail business, Ocado has been able to find efficient ways to expand its business, reduce operational costs while also providing the best customer service in the online retail industry.
Looking to the future, the Ocado Smart Platform (OSP) will enable us to improve our existing operations in the UK and also offer our technical know-how and platform to other retailers worldwide. The Ocado Smart Platform will offer a faster, flexible, more cost-efficient and low-risk way of launching or improving online grocery businesses.
By adopting this end-to-end solution, Ocado and its partners will be uniquely positioned to take advantage of the growing global trend for online food shopping in what is the world’s largest retail segment.
