Backed by over 25 years of experience in online grocery, Ocado Group has changed the way the world shops. With 13 innovative online grocery retail partners globally, we have seen first-hand how the right type of fulfilment – the process which includes picking, packing, and making products available for delivery or collection is vital for success in online grocery retail.

We understand that there is no one-size-fits-all when it comes to how online grocery orders are fulfilled, which is why we offer a flexible portfolio of solutions tailored to retailers' market dynamics and needs, from our large-scale OSP CFCs to our new store based fulfilment product. This ensures each retailer can deploy the right fulfilment mix for their markets and online ambitions.

Exploring store based automation 

A key pillar of the fulfilment ecosystem we can offer partners is store-based solutions: integrating fulfilment capabilities into their existing store networks – whether through our In-Store Fulfilment software or by deploying automation on a smaller scale, within or next to stores. 

Alongside Ocado’s existing CFC automation (“OSP”), our new store-based automation solution involves automated picking and fulfilment within a customer-facing store. It’s a compact, store-based solution that supports efficient pick-up and local delivery missions, with access to the entire store range. 

“Think of it as a compact automation solution within or next to an existing store space,” says Steve Payling, Vice President of Product at Ocado Technology. “a small, automated warehouse where grocery orders are picked, packed, and prepared for customers. It helps retailers with large store estates to maximise the value of their store investments for fulfilling orders – transforming the economics of pick-up use cases - where customers collect their order from the store, or orders can be picked up for fast delivery.”

“Store based automation utilises behind-the-scenes Re:imagined technology, leveraging decades of fulfilment expertise and years of R&D investment to deliver automated storage and retrieval in a small scale format. It can be integrated as part of a broader fulfilment strategy customised to a retailer's specific market dynamics and ambitions.”

‍Evolving challenges, new solutions 

Online grocery retailers are under pressure on multiple fronts, including rising labour costs and labour shortages. Customer demands are evolving too, with delivery lead times ranging from immediacy, to same day and next day. Online grocery pick-up is also a significant channel in many markets. In an industry with thin margins, retailers are exploring new strategies to tackle these issues. Currently, most fulfilment solutions in online grocery remain manual, even as the channel expands and labour scarcity and costs become more significant challenges.

For large retailers with vast store estates, integrating a compact fulfilment system directly into existing stores could enable them to transform their cost to serve online customers through stores. The approach allows retailers to utilise their current store space and network to increase sales capacity from the space they have, and to harness the benefits of high-density storage and automation. Furthermore, by shifting order picking behind the scenes, automation not only delivers high throughput for retailers, but can also reduce congestion in store aisles to improve the overall shopping environment and customer experience.

A widening fulfilment toolkit

Ocado’s store-based automation is a key part of the fulfilment toolkit that our partners can deploy. Ocado’s flexible fulfilment ecosystem can enable our partners to deploy the right fulfilment format in the right geographies, for the full range of customer missions and with the best possible economics. We work with partners to determine the optimal mix tailored to their specific needs, taking into account their strategy, market conditions, objectives and customer propositions. 

“Store-based automation isn't a replacement for Ocado’s large Customer Fulfilment Centres (CFCs), but a complementary solution,” says Steve.“CFCs remain the backbone of high-volume efficiency, delivering scale and leading economics. But for retailers with extensive store estates, store-based automation adds agility: the ability to serve pick-up and immediacy missions by leveraging retailers’ existing store networks and transforming the economics of doing so.” 

Ocado already supports more than 1,000 stores worldwide with our In-Store Fulfilment solution and operates 25 customer fulfilment centres globally. The evolution towards automation within stores expands on that foundation. By combining decades of operational expertise with investments in Re:imagined technology, Ocado Group helps established retailers with the optimal fulfilment options for their market needs.