The UK e-commerce grocery retailer and logistics technology provider Ocado has finally concluded the deal that the world has been hoping it would, by signing a contract with the large French retailer Groupe Casino.
On Tuesday November 28, Ocado announced that Groupe Casino would license the ‘Ocado Smart Platform’ for what is described as its “grocery e-commerce platform”, starting with the brand Monoprix.fr.
The physical manifestation of this will be the creation of a new “Customer Fulfilment Centre using Ocado’s proprietary mechanical handling equipment to serve the Greater Paris area, the Normandie and Hauts de France Regions. The build and launch is expected to take at least two years.”
Groupe Casino will also use “Ocado’s best-in-class front-end web site functionality, last-mile routing management and big data, real time implementation”. It appears that Groupe Casino is buying the whole of Ocado’s logistics technology and process package, creating fulfilment centres similar to those run by Ocado in Andover and Essex. There are reports that the fulfilment centres in France may be larger than these. There appears to be plans to open additional fulfilment centres.
Ocado said that Groupe Casino would “pay Ocado certain upfront fees upon signing, and during the development phase, then ongoing fees linked to its utilisation of capacity within the CFC and service criteria”. Analysts have speculated that this might generate around £10m a year in revenue for Ocado, although there has been no confirmation of this from the company which simply stated that in financial year 2018 the fees generated by the new business would be consumed by the capital investment required to create the new facilities.
The e-retailing sector in France is reasonably well developed, however it tends to use specifically French solutions. The French post office, La Poste, has some advanced technology but it is used in a different way to most other markets with last-mile services having a relatively low penetration, as opposed to ‘click & collect’. Expanding into this market is a significant advance for Ocado. It sees the sale of its e-retail logistics technology as core to its business, yet up until today had no customers outside of the UK.
Source: Transport Intelligence, November 28, 2017
Author: Thomas Cullen
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