Alex Sword’s insight into changes in the delivery market.
Even before the latest news that Ocado is splitting its retail and technology businesses, selling half of its retail business to M&S and going into partnership with the company, it was undergoing a transformative year. (See the main news section for further details of the M&S deal.)
In the past year, Ocado has announced a one-hour delivery service as it reported a lift in sales but widening losses after what it describes as a “transformative year” for the business.
Ocado Zoom will enable the retailer to deliver a range of more than 10,000 lines, built on micro-centralised fulfilment, within 60 minutes. “We’ve built a test site that will launch to customers in March in West London and over the coming years we expect to mature this offering and make it a part of our offering to our international customers in order to enable them to offer more immediacy in their core markets,” said Ocado Chief Executive Tim Steiner at the retailer’s full-year results presentation.
During 2018, the online grocer and technology business signed partnerships with North American retailers Sobeys and Kroger, and with ICA in Sweden to use the Ocado Smart Platform along with robotic infrastructure solutions. It is now committed to opening 23 CFCs for its retail customers in coming years. It also looks forward its work with Group Casino in France, whose first customer fulfilment centre is now under construction south of Paris, while Bon Preu has launched its online business in Catalonia, and its longest-standing customer Morrisons is now delivering from its latest, fourth, customer fulfilment centre at Erith, north London which, says Ocado, will be the largest automated grocery fulfilment centre in the world when it operates at its full £1.2bn capacity. So far it is processing more than 30,000 orders a week.
While its own grocery sales and income from services to other retailers grew, the costs of investing in customer fulfilment centres and technology both for its own retail business and those of its third-party retailer customers also grew, with the result that pre-tax losses widened to £44.4m from £8.3m a year earlier. It reported group revenue of £1.6bn in the year to December 2 2018. That was up by 12.3%.
However, the online grocer saw deliveries disrupted by a major warehouse fire at its Andover CFC in February.
Amazon customers in a US neighbourhood will be able to receive packages via autonomous delivery as part of a new trial. Six Amazon Scout devices will deliver packages in Snohomish County in Washington state. Customers in the area simply order as they normally would via the site or app.
The robots will deliver between Monday and Friday during daylight hours, autonomously following pre-set delivery routes. At the initial phase of the trial they will be accompanied by an Amazon employee.
Sean Scott, VP of Amazon Scout, wrote in a blog that the trial would provide learnings about the robots so that in future the marketplace could “provide even more sustainability and convenience to customer deliveries.”
Amazon developed Scout at its R&D lab in Seattle. The robots are about the size of a small cooler and travel at a walking pace, with the capacity to avoid obstacles.
Last November saw Amazon testing the potential of parcel delivery by drones at a new facility in Belgium.
UK-based clothing and homeware retailer Matalan has deployed a new inventory management solution to improve its visibility over stock.
The company will use two of Oracle’s Retail Cloud solutions to provide a single view of merchandise across its supply chain. Through the Oracle Retail Merchandise Financial Planning Cloud Service, Matalan will have a view into its sales history to allow it to plan what it needs to buy.
The Oracle Retail Assortment and Item Planning Cloud Service, meanwhile, uses technology such as automation to provide the retailer with visibility over product lines in its different locations.
Matalan already makes use of the Oracle Marketing Cloud to support its online and mobile campaigns.
Howard Reed, Chief Technology Officer at Matalan, said: “We continue to invest in innovative technology and tools that enable us to present our customers with a fantastic product range that is accessible where and when they choose to shop.”
Waitrose has extended its same-day delivery service for food across London after “encouraging early sales”. The UK supermarket said it was extending its ‘Waitrose Rapid Delivery’ service from eight to 12 London postcodes.
Customers can choose up to 25 items for a single delivery from a range of 1,500 products. There is a £10 minimum spend and a £5 charge applies for using the service.
The products are hand-picked by Waitrose staff before being handed over to On the dot, which uses bikes and vans for deliveries. The service offers delivery within two hours or during a specified one-hour slot on the same day.
Waitrose said that sales had grown weekly by 20% since the beginning of the trial in September.
Waitrose & Partners Concessions Manager, Kelly Gleeson, said: “Waitrose Rapid Delivery gives us even more flexibility in meeting our customers’ needs.”
Meanwhile, L’Occitane launched a same-day delivery service called Ship from Store in London, with plans to expand it across the rest of the UK. The company also worked with On the dot, allowing them to offer customers a two-hour delivery window between 11am and 6pm on any day of the week.
In November, online florist Bloom & Wild launched a same-day delivery service across London working with On the dot too. The move comes ahead of longer-term plans to launch a same-day delivery service across other UK and European cities.
Ford is trialling a “warehouse on wheels” service in London which will allow last mile deliveries to be more easily offloaded from trucks to bikes.
The concept involves vans picking up parcels from depots and then stopping at strategic locations. Foot or bicycle couriers then collect parcels from these points and carry them the last mile to the customer, coordinated by Ford’s software platform.
Ford estimates that a single van with four couriers on foot or bicycle could deliver the same number of parcels as five vans. The initiative aims to cut traffic, reduce emissions and improve delivery times.
Gnewt by Menzies Distribution will contribute electric vans to the project.
Tom Thompson, Project Lead, Ford Mobility, said: “Our goal is to keep larger vehicles like delivery vans operating in the high load, less congested environments in which they perform best.
However, for the last mile of a journey into an urban area, where congestion and lack of parking can be a challenge, it makes sense to offload deliveries to more nimble, efficient and cost effective modes of transport.”
Michael Hurwitz, Director of Transport Innovation, Transport for London, said: “Freight and deliveries are central to supporting London’s economy, with half of the value of the capital’s household expenditure relying on it.
“However, congestion and poor air quality are some of the biggest challenges the city faces. More last mile deliveries made in this way, alongside the growth of microconsolidation centres, are essential to tackle the pollution problem and keeping the roads moving.”
Asos has launched a same-day click and collect service at a UK university that allows students and other customers to order a product and pick it up that evening.
Available to customers in the vicinity of Leeds University, Asos Instant – On Campus allows customers to order items before 12pm on a weekday and then collect them from 5pm to 7pn from the student union. Uncollected parcels are held for 10 days.
Asos partnered with CollectPlus and On the dot to offer the service, which is priced at £2.95 for standard customers and is free for subscribers to the Premier Delivery service.
Customers can also use the CollectPlusPoint to return unwanted items to Asos for free.
The launch follows Asos introducing its same-day delivery service Asos Instant to London, Manchester, Leeds and Birmingham. Using On the dot’s machine learning algorithms, its 5,000-strong fleet of couriers and an open API to display timeslots, Asos customers are able to select delivery times to suit them.
The UK click and collect market will grow 46% over the next five years despite the satisfaction rates lagging those of home delivery, according to a new study.
In a recent interview, CollectPlus CEO Neil Ashworth told eDelivery that although home delivery will continue to take the lion’s share of fulfilment for some time, CollectPlus believes third party click and collect networks will grow much faster than either home delivery or retailers’ own click and collect options.