Exploring OSP ecommerce as a growth engine in online grocery

Ecommerce sits at the heart of growth strategies for online grocery retailers - shaping the customer experience and driving effective supply chain performance. 

We’ve spent more than two decades using data, AI and cutting-edge technology in our own operations to transform online grocery ecommerce.

The launch of the “Ocado on the Go” iPhone app in 2009 was a milestone for the industry as the first transactional shopping app in the UK. Over time, we saw an opportunity to create an ecommerce experience built specifically for online grocery shopping. 

Online grocery differs significantly from other ecommerce sectors. Customers often shop with baskets of 50+ items, items are typically low-margin, and orders are often frequent and highly repeatable. These unique characteristics have shaped the way we build and continuously improve Ocado Smart Platform (OSP) ecommerce.

This is what makes OSP different. Our platform is designed around the specific needs of online grocery retail, from delivering highly personalised shopping experiences through data and machine learning, to streamlining the customer journey and seamlessly connecting ecommerce with fulfilment and last-mile operations.

Today, OSP ecommerce is live for partners internationally, helping shoppers place millions of orders every month! 

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Online grocery ecommerce - proven at scale‍

Ecommerce plays a critical role across the entire customer lifecycle: from acquisition and conversion to retention and loyalty:

• Attracting new customers: beyond a digital storefront that can be used across devices, OSP’s webshop provides intuitive product discovery, relevant offers, and smooth discovery to help retailers attract new customers and convert visits into orders. 
• Building  loyalty and retaining customers: retailers can create shopping journeys tailored to individual customer preferences and purchasing habits, taking into account customer product purchase frequency, recency, recurrence and more. Features such as ‘favourites’ make it easy to reorder frequently purchased items, while personalised recommendations, recipes and basket-building suggestions help customers complete their shopping conveniently.
• Boosting basket growth: personalised recommendations, loyalty programme integration, targeted promotions and retail media all help retailers strengthen customer relationships, drive basket growth and revenue. While shoppers can easily add to their order and edit their shopping up until the cut-off time for their slot. 

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More than a digital storefront: connecting ecommerce and operations

OSP ecommerce goes beyond the webshop or digital storefront. It can be closely integrated with the supply chain and synced with the last-mile to deliver an efficient supply chain. 

The value of this approach comes from combining customer, operational and fulfilment data and machine learning to drive smarter decision-making. For example, it uses an advanced machine learning algorithm to help manage stock levels more efficiently. The algorithm identifies excess stock approaching the end of its life and offers it to customers at a reduced price to keep waste low. 

Ecommerce integration for supply chain accuracy and product availability

What’s more, combining the webshop and supply chain gives customers a more accurate view of product availability, freshness, and delivery options, while helping to manage expectations throughout the shopping journey. For example, smart supply chain integration enables retailers to offer guaranteed minimum shelf life for fresh produce and to accurately display product availability for each selected delivery slot. 

In the last mile, OSP ecommerce offers a range of slots and lead times - from short lead times to same day. Retailers can combine operational data with configurable slot lengths, timing and prices - to display options to the customer that help to build a cost-effective and efficient last mile.

Importantly, every interaction generates valuable data that can be used to continuously improve the customer experience. This creates a virtuous cycle: the more customers shop, the more intelligence the platform gains, enabling increasingly relevant, efficient and engaging experiences over time.

Using machine learning to create better shopping experiences

In physical stores, retailers often rely on aisle layouts, end-of-aisle displays and promotions to encourage product discovery.

OSP ecommerce creates an opportunity to take personalisation much further.

Using machine learning, data and forecasting, retailers can tailor recommendations in the webshop based on individual shopping habits, preferences and purchase history. This allows them to introduce customers to relevant new products, showcase complementary items and create experiences that feel uniquely personalised.

Features such as "Have you run out of?" prompts, intelligent recommendations and smart search help customers find products more easily, reduce forgotten items and complete their shop with ease.

Meeting customers wherever they choose to shop: the Ocado Smart Platform

Ecommerce growth is about more than branded websites and apps. Increasingly, it is also about meeting customers wherever they choose to shop, with flexibility across shopping missions, platforms and lead times. 

That’s why with OSP, retailers can take advantage of supporting shoppers in the ways they want to shop. Today, OSP supports shopper lead times from short lead times to, same-day and scheduled deliveries. Orders can be captured through our platform, the client’s own front-end or through aggregator’s sites, while being fulfilled seamlessly through Ocado’s technology. 

“We are empowering our partners to meet customers wherever they choose to shop; whether that’s through the retailer’s own webshop, or via third-party platforms. These orders can be fulfilled through Ocado’s technology and delivered seamlessly, regardless of where they originate.” 

James Gralton, Chief Product Officer, Ocado Group

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