| posted by

How Ocado is transitioning from grocer to internet of things technology pioneer

A key theme to Mobile World Congress last week was around how every business, no matter what the original industry or core vertical was, will need to become a software business in order to survive.

The best example of this is Ocado, which has laid out its plans to re-sell its technology to other supermarkets globally, as well as to other industries. Its aims are to effectively become a B2B technology powerhouse. This may be why rumours are rife that a player like Amazon is eyeing up the business.

The technology is all routed in its new warehouse in Andover, which it is set to open soon. David Sharp, head of technology 10x at Ocado, spoke to The Drum at Mobile World Congress last week, where it was showing the technology it had developed alongside Cambridge Consultants.

One thousand robots

He explained that currently its warehouses use almost 25 kilometers of conveyor belts and the new system, which tightly compacts the boxes of groceries together, removed this need and instead uses 1000 robots to transport the goods. But to be able to get these robots to listen to commands and report back 10 times a second, with minimal latency, wifi technology was too slow. Instead Ocado built a new mobile communications service, which it is now taking out to market.

 

 

“We are going to enable the world’s retailers to be very smart and very efficient in their online commerce offering and they’ll do that by buying or licensing our Ocado Smart Platforms, which consists of all the software that we use and all the warehousing technology that we are about to put live in our new warehouse in Andover,” says Sharp.

New wireless technology

“We are also going to make available the new wireless technology that we are using to communicate to our robots for people to use in warehousing, but also for other applications as well. For example, maybe in airports where you’ve got loads of cars that are driving around. As these become driverless vehicles you'll need to control them and know where they are many times a second,” he adds.

But it’s not just about B2B technology for Ocado, a lot of its technology ambitions are closer to its consumer heartland. It also wants to own the upcoming smart home revolution and is pre-empting a time when our fridges will be able to communicate what’s in them, data that Sharp believes is very valuable.

Smart fridges and bins

“Data about people will be very valuable in the long run, particularly with the internet of things coming into the home. So eventually, when you have a smart fridge and a smart cupboard and a smart bin, we’ll be able to predict what you are running out of before you even realise. So you’ll be able to get orders that we’ve generated for you and you’ll just have to tick to say ‘yes that’s fine’ and that way you’ll run out of things much less often than you do at the moment,” he predicts.

As a business, Ocado already powers the technology behind Morrisons’ online grocery proposition, a deal that helped the supermarket go from nothing to £200 million in turnover in one year. Ocado also teased in a recent analyst call that some international deals were almost set and it remained confident, meaning it won’t be long until it becomes one of the first brands to truly pivot to a software business.

Featured by The Drum