Tesco’s latest move aims to enhance international online grocery operations.
- Tesco unveils an ecommerce solution similar to Ocado’s offering.
- Transcend Retail Solutions partners with New Zealand’s Foodstuffs North Island.
- Experts analyse the competitive threat posed to Ocado.
- The global grocery delivery market presents significant opportunities for Tesco.
Last week, Tesco introduced its latest ecommerce initiative aimed at assisting international supermarket chains in developing their online operations. The initiative, Transcend Retail Solutions, provides both software and hardware solutions to allow supermarkets to fulfil online orders directly from their physical stores. This move comes as a direct competition to Ocado, which has established a similar foothold in the sector.
Transcend Retail Solutions has already secured its first partnership with New Zealand’s retailer, Foodstuffs North Island. Utilising Tesco’s cloud-based picking software, Foodstuffs will enable in-store order processing and optimise pickers’ routes through handheld devices. This initiative reflects Ocado’s strategy, which leverages artificial intelligence and automation for its service, significantly benefitting from its advanced technology over the years.
Industry experts, including former CIOs of major retail brands, have weighed in on how Tesco’s venture compares to Ocado’s established operations. While Ocado has revolutionised large-scale warehouse automation with its self-developed robotics, Tesco’s Transcend focuses on advancing the store pick model for grocery fulfilment. This fundamental difference sets them apart, despite similar customer outcomes.
Tesco’s decision to launch another venture follows the earlier introduction of a new marketplace in June. According to retail technology expert Miya Knights, the retail giant is compelled to diversify and innovate its strategic models. By reselling core capabilities like in-store ecommerce picking, Tesco seeks to monetise its technological investments anew. Retailers like Tesco, with vast scale and low margins, strive to ‘sweat their assets’ further, turning technology sales into a revenue source.
Julian Burnett and Phil Jordan, both former CIOs, highlight the opportunities the global grocery delivery market presents for Tesco’s new initiative. The market is forecasted to reach £585.46 billion in annual revenues, representing a promising target for capturing technology spend. For international retailers, especially those in less mature ecommerce markets, the advanced solutions offered by Transcend Retail Solutions are highly attractive.
Despite Ocado’s strong presence, Tesco’s Transcend initiative offers a distinct model that could reshape competitive dynamics in online grocery fulfilment.
