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OCADO GROUP From a Pure Online Grocery Retailer to a Global Service Provider The Ocado Way (Source: Ocado) © CCMP Authors 1 : Paul Lapoule, Olivier Badot & James Rowell 2 Institution: ESCP 1 We are very grateful to Madame Clémence Munier for her valuable contribution to the case study conception. 2 Lecturer at the University of Buckingham (U.K.)
© CCMP - OCADO – Paul LAPOULE, Olivier BADOT & James ROWELL – ESCP 2 CONTENTS I. Introduction ................................................................................................. 3 II. Grocery shopping and digitalisation ............................................................. 3 III.Fulfilment models ........................................................................................ 4 A. From the customer viewpoint ............................................................................. 4 B. From grocery retailers perspective ..................................................................... 4 IV. Ocado business model: a centralized and end-to-end model ........................ 5 A. Erith Customer Fulfilment Centre ........................................................................ 5 B. From an online grocery delivery service to a technology company ..................... 6 V. Ocado.com ................................................................................................... 6 VI. International partners ................................................................................. 7 VII. Appendix 1: Last mile delivery has become a key consumer expectation in food and grocery ........................................................................................ 10 VIII. Appendix 2: Some E-Commerce Trends in the USA ................................ 10 IX. Appendix 3: Kroger, Ocado set terms for e-commerce partnership ............ 11 OCADO GROUP From a Pure Online Grocery Retailer to a Global Service Provider
© CCMP - OCADO – Paul LAPOULE, Olivier BADOT & James ROWELL – ESCP 3 I. Introduction Two Alumni, Luke Jensen and Clémence Munier are currently working for Ocado Solutions. Luke joined Ocado in February 2017 to become the CEO for the Ocado Solutions business and joined the Board as an Executive Director in March 2018. Prior to Ocado, Luke developed extensive experience in strategy, online and grocery retailing, and served as Sainsbury’s Group Development Director, responsible for the group Profit &Loss statement in Online and Digital and all customer facing digital activities. After 10 years of experience in strategy consulting/in-house strategy at Bacardi-Martini and vendor management at Amazon UK, Clémence joined Luke’s team in December 2017 as Head of Commercial Projects. Clémence is in charge of driving the business development activity for Ocado Solutions, aiming at signing additional international partners. More recently, Clémence also became the Kroger Account Head (US), one of the world's biggest grocery retailers. 2018 was a transformative year for Ocado, adding three new international partners to the Ocado Smart Platform (OSP), continuing significant investment in technology, and improving the experience for Ocado’s retail customers. 2019 started with fundamental changes in the Ocado group strategy. Marks & Spencer (M&S), one of Britain's highest rated food brands and unique own brand retailer paid Ocado £750m for a 50% share of a new joint-venture (Ocado.com). In a context of a health crisis, results are better than expected. This deal allows Ocado Group to further increase its focus on technology innovation and international partnership expansion. In 2020, two US robot companies joined the Group to help Ocado solutions’ expansion. II. Grocery shopping and digitalisation Groceries are unique in e-commerce in that their inventory is perishable, fragile and heavy. Basket sizes are also considerably larger on average than other online retail channels. When storing, picking, packing and delivery groceries, you need to

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