Australia inches towards supermarket automation after Coles partners with Ocado

Following the news on 26th March 2019 that Coles Supermarkets Australia has entered into an exclusive services agreement to bring British online supermarket pioneer Ocado Group’s online grocery platform, automated single pick fulfilment technology and home delivery solution to Australia prior to the end of the 2023 financial year,

Katrina Diamonon, Consumer Insights Analyst at GlobalData, offers her view on the evolving food retail landscape in Australia:

“The partnership represents the fifth major international deal that Ocado has forged in less than two years, after partnering with Kroger Co in the US, Casino in France, Sobeys in Canada, and ICA Group in Sweden. Coles is one of Australia’s largest supermarket chains, with its reach also extending to liquor stores and petrol station convenience stores, in addition to a growing online grocery business. One of the ways in which the Australian supermarket will leverage Ocado’s technological expertise is by introducing automated fulfilment centres centers to more efficiently pack customer orders and expand its home delivery capacity.

“The announcement follows two other significant undertakings recently – earlier this month Coles began selling a limited range of groceries on eBay, and soon after expanded the range of products available for delivery through UberEats. If there was any doubt as to the strategic objectives of Coles, it is now undeniable that the retailer has its sights firmly set on growing its online grocery business – and implicitly, taking on the imminent threat of Amazon.

“If Coles is in fact eyeing Amazon’s movements in the grocery space, we can expect further developments in the area of automation, beyond fulfilling orders behind the scenes. Indeed, the 2018 public launch of the revolutionary Amazon Go is surely indicative of the future of grocery retail. The cashier-less convenience store allows shoppers to simply walk in, fill their bags and leave, by using a range of technologies including artificial intelligence, computer vision and sensors; all the shopper requires is the Amazon Go app. The reaction to this format has been so positive that Amazon is planning thousands more in the coming years, which will not go unnoticed by the likes of Coles.

“Most of the major traditional supermarkets today are determinedly focused on how to improve their online shopping platforms – and justifiably so. However, in-store shoppers value convenience too, which cannot be overlooked by retailers. Automating the offline shopping experience, whether through digital price tags, targeted promotions or queue-free transactions is critical, as the digital retail revolution needs to be evident in physical stores too.”

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