Ocado strikes a deal with Kroger, Adobe with Magento, and Deliveroo makes one with the Devil

By Maia on Wednesday, May 23rd, 2018

Deliveroo hops into uncharted (unwelcome) territory

Deliveroo is one step closer to what many say is its inevitable transformation into a restaurant operator in its own right. In what appears to be a confirmation of its plans to vertically integrate and create its own food, it launched a  £5mn “innovation fund” earlier this week to invest in developing its own restaurant brands in partnership with new and established chefs.

The new brands will be delivery-only, operated out of Editions sites. The company will leverage its bank of customer data to identify where “there is local demand for specific cuisines” before opening – the first example, perhaps, of how it intends to use data-driven insight into users culinary tastes to carve out a competitive advantage.

This should be a major cause for worry for restaurant operators. Owning the data, dark kitchens and customer relationship puts Deliveroo in a very strong position compared to other suppliers to its platform. Deliveroo’s UX already makes it hard to distinguish between individual brands and it’s easy to imagine that the company will send the bulk of its traffic to channels where they stand to gain the most. Restaurants on the platform could soon find themselves in a position with no control over their customers or their brands and with Deliveroo alone setting the tone – one market disruption we think the world could do without.

Ocado: From marmite stock to the FTSE 100

It’s been a busy month for Ocado.

First, it strikes a partnership with ICA, Sweden’s leading grocer, to optimise its online business with Ocado’s Smart Platform. The full end-to-end solution will include a front-end e-commerce platform, automated warehouses designed for online grocery fulfilment, and last-mile route management technology.

Then, it crosses the pond in a transformative deal to provide warehouse technology to Kroger, the US’s largest supermarket chain by revenue. Kroger plans to use Ocado’s tech to build 20 fully automated warehouses across the country in the next three years.

This is a big deal for Ocado, which appears to be moving quickly beyond its origins as an online grocer and evolving into a Logistics as a Service (LaaS) provider of sorts, licensing its logistics technology to businesses around the world. Just the latest in a series of signals that even incumbent and legacy players are waking up to the importance of the last mile; our view is that this is one trend we haven’t seen the last of.

Seeing red: Abode acquires Magento in £1.25bn deal

Adobe acquired Magento Commerce this week in a move that doubles down on their evolution into an experience-led CRM and brings them one step closer to the end consumer.

Driven by what they call their ‘one fundamental truth: People Buy Experiences, Not Products’, Adobe has recently moved into cloud-based software to help businesses better understand customer data and deliver personalised content. The acquisition of Magento will help make those interactions shoppable, enabling ‘experience-driven commerce’ – Adobe’s take on the future of commerce.

This deal should help level the retail playing field, creating a robust marketing and sales solution and delivering best-in-class experiences to customers of big business, and more interestingly, for the smaller sized businesses Magento already serves.

Wherever e-commerce goes, of course, delivery soon follows. The customer experience cannot be thought of in isolation from the delivery experience. It’s unlikely that Adobe will consider a last-mile acquisition in the near future – but few would have seen this one coming not so long ago…

Blockchain may no longer be as hard to use as it is to understand

Is blockchain the answer to problems in the supply chain? Walmart, JD.com and even DeBeers seem to think so. In fact, in the last two months, these companies have announced plans to introduce blockchain into their supply chains, in an effort to ensure ethical sourcing, security, and transparency.

Amazon, too, may not be far behind. They just launched their “blockchain as a service” offering on Amazon Web Services this week. Our guess: supply chain is next.

When consumers buy goods online, they have little knowledge of where those items came from. They increasingly want both the convenience of quality products delivered to their doorstep as well as the reassurance of where they were sourced and how they got there. Blockchain delivers consumers that peace of mind.

Blockchain is set to transform logistics by making every detail from provenance to warehousing to doorstep delivery trackable, efficient and more profitable. The fact that it could potentially make it more ethical too is exciting. As with all things blockchain, however, this is going to be a case of wait and see – although most Bitcoin millionaires might suggest that waiting too long might be a bad move.

Recommended Watching

TED@UPS “The future of delivery in our new on-demand economy”

In this TED Talk, Alan Amling (VP of Global Logistics and Marketing at UPS) explores what he calls “The My Way Highway” – the road to fulfilling the ever-growing expectations of getting people what they want, when they want it. But how do create exactly what someone wants when legacy manufacturing systems were built on producing a lot of the same, generic things? And how do you deliver something on-demand when traditional logistics networks were built on the principle of order consolidation? And how do you do this with the least possible impact on the environment? Rules are changing and Alan gives his insight on what the future of delivery will look like in years to come.

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