The New Normal
Microsoft CEO Satya Nadella stated that Coronavirus drove two years of digital transformation in two months. In the online grocery sector, we’ve seen 20 years of growth in 12 weeks. As the world increases its pace towards a digital future, the need for economically viable solutions for retailers to deliver to customers is increasingly important. Leveraging automation and AI is the only sustainable way to achieve this.
Automation: Helping Retailers Deliver the Goods
The traditional online grocery model of bolting a website on to existing store operations and picking products off the shelf is unsustainable because of the huge time needed to pick each grocery order from store shelves. Often picking one order can take up to 90 minutes in traditional models. However, using automation, one full customer grocery order can be picked in just 5 minutes, and upwards of 50 orders can be picked concurrently.
But it’s not just the quantity of orders that matter – it's the quality. During lockdown, people may have been happy to simply receive their deliveries and could overlook large amounts of substitutions. But the online grocery customer is discerning. Long-term, quality of service matters and advanced AI capabilities are a crucial part of accurate supply and demand forecasting. Even during Coronavirus, Ocado.com maintained 98% order accuracy and on-time deliveries from a range of 55,000 products.
Automation: Reducing Touchpoints
Coronavirus heightened consumer awareness around hygiene and contamination – increasing the appeal of online grocery shopping. But the traditional online grocery model involves store assistants picking products off shelves in-store, where items can be touched up to ten times. Automation massively reduces touchpoints; in our highly automated warehouses, humans touch products on average twice – when being put into the storage grid, and when being packed into a customer's bag.
AI: Creating Frictionless Online Experiences
Under lockdown, many people found themselves shopping online for groceries for the first time, rather than browsing the aisles in the real world. This means that having an intuitive, personalised webshop is key to offering the best experiences. Behind this lies multiple applications of artificial intelligence. By using customer shopping data, AI algorithms can show each customer “virtual stores” so that they are shopping through the “lens” of their own personal preferences. This not only helps them see more products that they might like, but their usual grocery basket of 50-70 items can be ordered with just a few clicks. Compare that to the time it takes to pick items in a physical store and we can see how this technology is instrumental in reducing time and effort to make online grocery shopping a much less stressful activity, especially under lockdown.
AI: Making Smarter Deliveries
AI is instrumental in the planning and optimisation of thousands of daily delivery vehicle routes – factoring in millions of constraints, like road speeds, driver breaks, and the size and temperature distribution of every order. This makes the last-mile a highly efficient, seamless journey, optimised in real-time. What’s more, using smart algorithms helps retailers respond rapidly to changing demand or dynamics: by temporarily switching off bottled water – which used a huge amount of space in delivery vans – Ocado.com was able to serve 6,000 additional customers a week during lockdown.
AI And Automation: Delivering The Goods
We’re proud that we’ve been able to support the delivery of nearly 40% more groceries in the UK than before the impact of COVID-19 through our retailing customers Ocado.com and Morrisons.com. Our mission is to use our technological capabilities to improve society as a whole. Looking to the future, our investment, research and development into technologies such as robotic picking, vertical farming and dark kitchens offer a glimpse into our vision of food being delivered from farm to fork in two hours, increasing sustainability, choice and convenience.