Ocado opens its first US office in Washington, DC

Diving Brief:

• British e-grocery store Ocado has announced plans to open an office in the metropolitan area of ​​Washington, DC, for its Ocado Solutions technology business company announced in a press release. Ocado will open a temporary office in Tysons, Virginia, next month, as it looks for a permanent location.
• Ocado has entered into an exclusive partnership with Kroger for the construction of 20 automated distribution centers in the United States in the coming years and will also open an automated center for Sobeys in Canada under a separate contract. Kroger and Ocado have recently inaugurated an order processing center located in Monroe, Ohio, and announced last month their intention to build a site in central Florida and in the center of the coastline. 39; Atlantic.
• Ocado Solutions CEO Luke Jensen said Washington has been selected for its connections to cities in the United States and Canada, as well as for its strong pool of technical and technical talent. From the new Washington site, the company will recruit and train "hundreds" of technologists and qualified engineers from North America, he said.

Insight on diving:

The deployment of Ocado automated processing centers (or "sheds", as they are often called) is a large-scale enterprise. The company said it would be better placed to support the construction and coordinate the delivery of its technology with a US headquarters. .

With an office in Washington, Ocado will be ideally located in the midst of fierce competition in the grocery sector – and a short drive from the Kroger headquarters. Whether it's supervising construction, recruiting talent or building relationships with Sobeys and Kroger, Ocado sees many benefits.

An office in the United States will also allow Ocado executives to familiarize themselves with the retail landscape in the country, which can provide valuable insight into the design and construction of Ocado treatment centers for Kroger. Given the distinct differences in density and geography between the United States and the United Kingdom, A quick look at the field will help Ocado set realistic expectations for Kroger's rise to power.

While Walmart and Amazon have fierce competition for in-store e-commerce, Kroger's Ocado deal could put the supermarket chain under pressure. The state-of-the-art facilities will be equipped with robotic and digital capabilities, and if Ocado has a successful driver with one hour delivery from grocery storeKroger could potentially have an impressive range of same-day and next-day delivery options, as well as in-store picking.

Home delivery will be a top priority for Kroger as its hangars grow, but the grocer also sees other benefits.

During a Q & A session with investors at the Bank of America Merrill Lynch's Consumer and Consumer Technology Conference in 2019, Mike Schlotman, CEO of Kroger, said Processing of pickup orders can be transferred from Kroger stores to its Ocado centers, which could eventually reduce costs for the company.

"IIf you can move this business out of the store and into one of the hangars, it is chosen at a significantly lower cost, " Schlotman said. "And as home delivery businesses are pulling out of this store, there is no reason they can not add a few baskets of pickup orders and deliver them through the stores as they deliver the product to the homes. client."