1 December 2015

Ocado, the UK online grocer

Ocado is the leading UK online grocer. Its business consists in trying to make money from packing groceries and related items for customers and delivering it to their homes,

I remember being skeptical about their business model when they started in 2000, founded by three former merchant bankers from Goldman Sachs. From 2002 they worked in partnership with Waitrose, an upmarket supermarket chain, and in 2010 they were floated on the stock exchange. I see that in 2014 on a revenue of £948 million they had a razor-thin profit before tax of £7 million -- a margin of under 1%.

Clearly, controlling their costs is crucial as there is only just so much that customers are willing to pay as a premium for having their groceries delivered. They only have two warehouses: one in Hertfordshire, and the other in Warwickshire. Inventions have been used to ensure an efficient environment for collecting the groceries to fulfil the orders.

This is a list of British patent specifications by Ocado.

Here are a few of the drawings. A picking station:


This is for units that move in two directions above the storage units:


At the time of writing, eight out of ten documents found had as the inventor, or one of the inventors, a Swede called Lars Lindbo. Very often, when a company's technology is of interest, it turns out that there are one or two significant inventors who might perhaps be poached.

Their website, too, is simply a tool for ordering groceries and supplies, and has constant discount offers. It has features such as remembering what was ordered before so it is easy to reorder. When  you are ready to check out you can select a time slot for delivery, 6 in the morning to 10 at night, whichever is best for you -- at no extra charge if you can be flexible by picking a time when the van is in your area. Disclosure: we have used it ourselves, with deliveries at say noon -- one of the perks of being retired.

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