The Ocado Group plc (LSE: OCDO) is an interesting company to watch because it leads to the robotization of retail. In fact, I think Ocado is one of the few companies that could challenge Amazon’s online retail dominance in the United States.
However, Ocado’s automation and robotics technology are among the most advanced in retail. Specifically, Ocado designs and builds giant customer fulfillment centers ( CFC s), in which swarms of robots pull and pack groceries.
Ocado is Robotizing Grocery
Ocado operates three CFCs, including one in Hatfield, England, that supports 150,000 orders a week.
The Ocado Smart Platform (OSP) at the Ocado CFC3 in operates up to 1,000 robots. The robots work together on a grid the size of a football field. Interestingly, Ocado claims the robots can pull and pack a grocery order of 50 items in five minutes.
The Smart Platform uses a combination of artificial intelligence ( AI), predictive analytics, and agile processes to operate the robots. The Smart Platform needs all of those capabilities because the CFC3 contains 50,000 grocery times.
Plus, the Andover CFC is the size of three football fields. Additionally, Ocado is constructing the CFC4 in Erith which it claims will be the largest automated grocery warehouse in the world.
Can Ocado Robotize Grocery?
Ocado is attracting a lot of attention and support in the grocery business.
Ocado and the American grocery giant Kroger (NYSE: KR) plan 20 CFCs in the United States. The first two US CFCs are already under construction in and . Importantly, Kroger owns 6% of the Ocado Group plc.
In addition, Ocado is exploring partnerships with Swedish grocer , Canada’s , and France’s Group Casino to build CFCs, The Financial Times reports. In the United Kingdom, Ocado is partnering with clothing and luxury food retailer Marks & Spencer (M&S) to launch a grocery delivery service.
In exchange, M&S will own 50% of a joint venture with Ocado. The joint venture will trade on UK exchanges as Ocado.com, Reuters claims. Reuters expects the Ocado.com stock to launch by 2020…