In this post, we’ll summarize what we saw during our tour and why it’s important to the retail industry.
Automation for efficient and sustainable e-commerce implementation: Day One, Ocado’s CFC4
On an overcast Thursday morning, we took the one-hour minivan from St Pancras to Ocado’s CFC4 in Erith, east London. The 600,000-square-foot fulfillment center site is the company’s largest CFC in the world and features a high level of automation that characterizes the facility.
Erith’s CFC4 is a prominent example of using the Ocado Smart Platform (OSP) in large-scale grocery distribution. OSP is Ocado’s proprietary technology that leverages a combination of AI, machine learning, robotics, IoT and data science to improve efficiency and flexibility in highly complex e-grocery operations.
According to Ocado, OSP will dramatically improve the efficiency of fulfillment operations – with a 99.9% fulfillment accuracy compared to 80% of other leading UK supermarkets – and reduce waste by making operations more sustainable. Logistics and fulfillment operations play a major role in meeting customer expectations, increasing efficiency and sustaining operations.currently one of the priorities of retailers.
That’s why more and more retailers are using advanced analytics and automation to streamline logistics and fulfillment. Recent research from IDC shows that more than 70% of retailers have confirmed plans to use AI and robotics for cognitive and warehouse automation to orchestrate orders.
When we arrived at the facility, it was a large area dominated by a large grid of thousands of bots moving at lightning speed in seemingly random directions. On the grid, bots move at a speed of 4 meters per second, with a distance of 5 millimeters between them.
Of course, their trip to the grid is not accidental. The bots are not autonomous, but orchestrated and powered by RF’s proprietary solution developed by Ocado. Ocado has partnered with AWS to run thousands of OSP microservices in the cloud and provide bots and operations orchestration.
About 3,000 robots work continuously for 20 hours, picking up to 2 million items per shift from 50,000 individual refrigerated and general grocery items. On average, an order for 45 products is completed in 5 minutes. The modular nature of OSP and the scalability and non-possibility of a single point of failure enabled by its AWS cloud orchestration are huge advantages of Ocado’s technology stack, making it a perfect fit not only for Ocado’s operations, but also for its requirements. Other grocers around the world, including Groupe Casino, Auchan, AEON and Kroger, have partnered with Ocado to power their eGrocery operations.
Expanding the workforce in e-commerce logistics: Day one, Amazon’s Tilbury FC
The sun came out as we approached the Amazon Football Club in Tilbury in the late afternoon. Tilbury FC is one of the largest European Amazon TC, with a facility of 2.2 million square feet over 4 floors.
FC is highly automated with extensive use of technology, including robotics, AI and computer vision in all aspects of operations, all integrated and powered by AWS cloud services. More than 2,000 people are employed in the institution at any time, showing how it works Despite high levels of automation, the employee remains central to retail operations.
FC provides a great example of workforce augmentation by showing how technology is helping people work more efficiently. According to the latest IDC Retail Insight study, 43% of retailers prioritize empowering their employees by providing them with the right technology and tools to perform their tasks in a timely manner.
We started our tour at the sorting stations located on levels 2, 3 and 4. At this stage, employees select products from the boxes from the area of arrival and place the products in yellow piles according to their weight. The lights show and guide employees where to put the product in the stack. The stacks are then moved by an army of about 4,000 autonomous bots that fit under the stack and use AI and algorithms to sequence the tasks they need to perform.
QR codes printed on the floor are scanned by the bots’ cameras and sensors as they move around a large area of the facility. Although the bots are fully autonomous and not controlled by humans, employees in the control zones – workstations that look like bank trading rooms, where the flow of operations is shown on multiple displays – ignore every aspect of the process and alert colleagues on the shop floor if there is a problem.
The next step is the picking area, where employees collect items from the stacks and put them into black boxes, or bags, in a reverse process. The products are selected sequentially, so at this stage, the employees do not assemble a single order, but an aggregate. The boxes are then placed on spiral conveyor belts that move the lids down to the packing stations, where employees take the items from the totes and place them in the walls of pigeon holes, where each hole corresponds to one-of-a-kind customer orders.
On the other side of the wall, employees pick items from holes, sort them, and place barcodes on boxes for identification.
In the last mile of the process, the boxes are placed on a conveyor belt, where robots scan the labels and check that the weight of the box matches the contents described on the label – if it doesn’t, it’s removed from the box. Belt for the employee to check it. At the end of the conveyor, employees pick the boxes and place them in containers that are loaded onto pickup trucks to take them to sorting centers closer to the end buyer for the last mile.
Discovering the new role of the physical store: Day two, a trip to Central London shops
Greetings from another cloudy morning, Day 2 focused on leveraging technology in physical store environments to create more engaging, frictionless, shopping journeys and improved customer experiences. The physical store remains important in omnichannel retailing, but its role is changing The brick and mortar store will become increasingly connected and integrated with the entire omnichannel experience. The visit provided excellent examples of how the role of the physical store is evolving in the context of today’s multi-channel shopping complexity, as we will explore in more detail here. IDC PeerScape: Practices for Enabling the New Role of the Physical Store.
We started our tour at an Amazon Fresh store in Hackney, one of the latest additions to Amazon’s network of standalone stores in London, and continued in the morning with a visit to Smartshop Pick & Go, Sainsbury’s first standalone store in Holborn.
Both stores use AWS technology—cameras, sensors, AI, and computer vision—to provide a fully automated grocery shopping experience that removes all possible friction, making shopping quick and effortless. Shoppers can scan their app when they enter a store, grab items from the shelves, and leave without going through the checkout, as the technology detects shoppers’ purchases and charges them accordingly through their app.
We ended our tour with Nike Town on Oxford Street, the company’s flagship store in the UK, to show how the technology can improve the shopping experience in non-grocery physical stores. While reducing friction is a priority in grocery stores, the focus of technology use in sportswear and lifestyle brick-and-mortar retail is on personalizing the customer journey and integrating the digital and physical.
The Nike App is an interface that allows shoppers to access personalized offers, preferences and experiences such as search and explore, which allows shoppers to reserve an in-app item for in-store collection, Nike Scan, which shoppers can scan. Product barcodes, such as size and color availability, and Triggered Reward, which sends personalized alerts to shoppers about exclusive promotions based on their in-store location, product barcodes to prompt store staff to try on an item.
Key Takeaways: Learning Points from the AWS London Analyst Tour
What we saw during the AWS London Analyst Tour are key examples of how technology is critical for retailers to streamline future omnichannel retail operations. As IDC’s latest survey results shows that over the next two years, retailers plan to invest in additional and emerging technologies to improve the new customer loyalty mix and CX personalization, enhance sensory and immersive commerce.
Meanwhile, Tour confirmed how leading retailers are preparing for the future of omnichannel retailing. Ocado has shown us how to dramatically improve efficiency and achieve sustainability goals through intelligent automation.
Amazon reminded us that automation and AI must empower the workforce, as staffing remains key to managing the complexity of today’s omnichannel fulfillment. Finally, visits to Amazon Fresh, Sainsbury’s and Nike Town are important examples of making the physical store central to the new omnichannel customer journey.