Tesco’s new ecommerce venture seeks to assist international supermarkets with online operations.
- Transcend Retail Solutions offers cloud-based picking technology akin to Ocado’s Smart Platform.
- Collaboration with New Zealand’s Foodstuffs marks Tesco’s initial partnership in this domain.
- Differences in fulfilment models set Tesco’s store pick approach apart from Ocado’s warehouse automation.
- Experts analyse the potential threat to Ocado and the opportunity for Tesco in the global market.
Tesco has recently unveiled a new ecommerce initiative aimed at aiding international supermarket chains in developing their online operations. This effort, launched under Transcend Retail Solutions, provides a suite of software and hardware tools designed to enable direct store order fulfilment. In its first significant collaboration, Tesco has partnered with New Zealand’s Foodstuffs North Island, with further discussions underway with other retailers globally.
Transcend’s technology focuses on automating the store pick model, leveraging cloud-based picking software to facilitate efficient order processing and fulfilment. This is achieved by mapping the most effective routes for order pickers through handheld devices, optimising the store picking experience. Conversely, Ocado’s Smart Platform is a comprehensive ecommerce ecosystem that integrates AI, robotics, and automated fulfilment through large-scale warehouses. Despite similarities in the service outcome, the underlying models differ significantly, as noted by industry experts.
Beyond this venture, Tesco is diversifying its strategic business model to include a marketplace launched earlier in the year. Retail consultants highlight the pressure on retailers to innovate for growth and recognise the monetisation of operational capabilities as a new revenue stream. By reselling its ecommerce order-picking technology, Tesco is poised to capitalise on its already extensive retail reach.
The global grocery delivery sector is on track to reach exceptional revenue levels by the end of the year. This presents a substantial market opportunity for Tesco, with experts commenting on its ability to capture a meaningful share of the technology spend. Particularly in markets where grocery ecommerce is still developing, Transcend Retail Solutions provides a low-risk, high-opportunity proposition for retailers looking to enhance their operations.
While Ocado possesses an established presence with its dark store-centric model, Transcend utilises a different strategy targeting store picks. Industry voices suggest that the competitive landscape is becoming increasingly dynamic, requiring each retailer to evaluate the most compatible operational model based on their unique circumstances. If Tesco successfully pivots to become a technology provider, it could indeed pose a significant challenge to Ocado’s market position.
Tesco’s entry into global grocery ecommerce technology presents both a compelling growth opportunity for itself and a new competitive challenge for Ocado.
