Utilising Proprietory Knowledge

Our Intellectual Property

Developing a sustainable, profitable and scalable online grocery sales operation has, until now, been an almost unsolvable challenge. With constantly varying product ranges with diverse shelf lives and temperature requirements, coupled with customer demands for accuracy and reliable delivery slots, grocery far surpasses the complexity of other retail segments.

However, we believe Ocado's 18 years of learning, research and development have enabled us to build the world's most advanced end-to-end e-commerce, fulfilment and logistics solution. Thanks to our cutting-edge IP, we are in a favourable position to capitalise on the shift to the online channel for grocery sales. Recognising the fundamental competitive advantages of our pioneering technology, some of the world's leading grocery retailers have chosen to partner with Ocado, to help them remain competitive, now and in the future.

Ocado operates at the intersection of five disruptive technologies: AI, robotics, the cloud, big data, and the Internet of Things. Our capabilities span physical infrastructure solutions, software and systems, to provide an end-to-end solution for selling grocery online – sustainably, profitably, and with the ability to scale.

Progress

During the last year, we have achieved significant progress in all our divisions.

In March, we announced significant improvements in our ability to detect fraudulent events through applying a pioneering 100% OSP machine learning model. Instead of analysing numerous data points to establish fraud, agents will now be able to swiftly apply a predictive model in an excellent illustration of how technology can augment humans for great efficiencies of scale. Other highlights include progress in developing technologies for robotic picking and packing and improvements in bot healthcare by using predictive analytics to drive preventative maintenance.

To retain our leadership in technology, we have continued to recruit. We now have over 1,300 Technology employees based in development centres in the UK, Bulgaria, Poland and Spain and over 500 Engineering employees. We are able to attract and retain some of the best technology and engineering talent by providing teams with a licence to innovate. We are not afraid to tackle previously untouched problems, and encourage disruptive thinking beyond conventional grocery issues, to constantly exceed what was thought possible to achieve.

Our outstanding achievements during the last year have been acclaimed throughout the industry, in numerous prestigious awards, including Tech Company of the Year, Tech Pioneer of the Year, and Best Case Study in AI Deployment.

On 9 November 2018, Catalonia-based supermarket chain Bon Preu went live using Ocado's store pick solution. This is the first 100% OSP partner Ocado Solutions signed.

Robot Arm

Patents

Protecting our IP is instrumental to retaining our competitive advantage.

We take careful measures to create a web of protection to safeguard our Solutions. During the year, we filed applications covering 19 new innovations.

We now hold 65 granted patents across 17 innovation families.

Progress

The majority of our patents and patent applications relate to our physical infrastructure solution and developments thereof, some of which are operational in Andover and Erith, and some of which will be used in our partnerships with Groupe Casino in France, Sobeys in Canada, ICA in Sweden, and Kroger in the US.

For example, we have continued to protect a significant number of innovations to improve operational efficiency, including our robotic picking capabilities, our new machine-learning-based fraud detection system, improvements to our demand forecasting models, and the simulation of our routing system to test new algorithms.

Future focus

Our leadership in technology and innovation in one of the most complex retail sectors – grocery – is providing significant opportunities for growth and long-term shareholder value. As we work to optimise every aspect of our e-commerce, fulfilment and logistics platform, we achieve dramatic efficiencies of scale. These advancements mean we can explore opportunities in immediacy with a potentially attractive economic model. We are also exploring opportunities beyond the retail sector, where we can apply our disruptive technology to tackle other complex challenges in new and innovative ways.

Key:

Constantly enhance end-to-end technology systems

Enable current and future partners' online businesses

Risks:

  • Technology innovation supersedes our own and offers improved methods of food distribution to consumers
  • Failure to protect our IP
  • Failure to ensure our technology can be freely operated without infringing a third party's IP
  • Failure to recruit and retain the skilled people needed, as competition for such talent intensifies.

Case Study

Robotic Picking

As part of our ongoing aim to lower costs and drive efficiencies within our model, we have been developing the technologies required to perform robotic picking and packing within our CFCs.

In 2018, we have achieved significant progress in both of these areas, with our first "live robotic picking lab" expected to go into production in Andover in early 2019.

SoMa Soft Manipulation Project

Our ongoing research within the SoMa project, funded by the European Union Horizon 2020 framework programme, has enabled us to achieve further significant progress in our ability to handle easily damageable and unpredictably shaped items, such as fruit and vegetables. In 2018, we investigated a number of different grippers that could overcome these challenges and that are also sufficiently versatile to pick a wide variety of products. The goal is to develop robust, cost-effective, and safe robotic grasping and manipulation capabilities for a major subset of our 50,000+ product range.

Progress this year has included a comparison of the performance of three different compliant grippers that employ three different actuation mechanisms. The assessment has been performed using a scientific benchmarking framework that our robotics team developed to reflect the requirements of Ocado's production process and has entailed a significant amount of practical experimentation.

The experimental work has also moved on from manipulating single items to using a vision system to aid the planning of manipulation strategies in more complex, real-world scenarios that include disorderly arrangements and additional environmental constraints.

OSPick

In 2018, we developed and trialled an alternative type of picking station, called OSPick. OSPick is a system designed to pick a range of groceries within our CFCs using a simple suction cup mounted on an articulated robot arm. While the system is conceptually straightforward from a mechanical perspective, its underlying power lies in the intelligent vision system that can pick a wide range of products without prior knowledge of the items presented to it.

The smart vision system can handle real-life cluttered scenes and autonomously decide what is the best item to pick next, and how it should be grasped in order to be safely placed into a customer's' shopping bag.

We expect the development and roll-out of this picking solution within our CFCs to allow us to reduce the cost of fulfilment both within our operations and those of our commercial partners.

Future evolutions of this robotic pick station will see the suction cup replaced by more advanced grippers, such as those being developed by our SoMa project.