Ocado today announced it had signed its first international customer for the technology that powers its online grocery operations.
The retailer, ranked Top50 in IRUK Top500 research, said a regional European retailer had signed up to use its Ocado Smart Platform. The retailer wants to remain nameless until it has launched its online business in order to keep a competitive advantage.
Ocado [IRDX ROCA] is to supply the partner with its full software platform, know how and support services. Orders will initially be fulfilled from the partner’s own manually operated central warehouse, but in the future the retailer may request to use automated mechanical handling equipment powered by Ocado. The new partner will pay an up-front fee for access to the solution, and fees based on the volume of products sold online. Ocado says the arrangement is likely to have a neutral effect on its earnings and cash flow in the near future, but expects that after 2018 its earnings will rise.
Ocado chief executive Tim Steiner said: “We are delighted that our partner has decided to adopt OSP for its online operations. This is an exciting step in the evolution of our business and in the delivery of our strategy.
“The benefits of our integrated solution are clear. As this particular retailer looks to develop its online offering the agreement we have signed provides the flexibility to expand its capacity efficiently in the future. We look forward to working closely with our new partner in the months and years ahead.
“Our discussions with other retailers across the globe are ongoing and we continue to expect to sign multiple deals in the medium term.”
Read up on the strategy in InternetRetailing’s recent interview with Matt Soane and James Donkin of Ocado Technology.