Our Intellectual Property

Making online grocery attractive to the customer and profitable for the retailer is very challenging. Elements such as large basket sizes, varying temperature requirements and narrow one-hour delivery slots add to the complexity of our solutions and heighten the barriers to entry within the sector. Our years of learning and development have enabled us to build market leading solutions and valuable intellectual property, which will enable our sustainable and long-term success within the sector.

Our capabilities span our proprietary processes, physical infrastructure solutions, systems and software to provide a complete end-to-end solution to benefit both ourselves and our future commercial partners.

Progress

Within the year we launched the first live instance of our store picking solution with Morrisons.com. Despite expected weaker economics at scale, this alternative picking solution can enable fuller geographic coverage to areas where centralised picking may not reach. It is complementary to CFC fulfilment and enables retailers to utilise their existing store estate to build online sales volume that could later be transferred to more efficient CFCs. It also enables us to provide a quick to market and more flexible solution to our retail partners.

To maintain our technological leadership we have continued to build capabilities within our technology teams, now constituting over 1,100 employees across our technology hubs in the UK, Poland, Bulgaria and Spain. We are able to attract and retain quality technology expertise by continuously pushing the boundaries in online grocery and providing the team with the mandate to think beyond conventional grocery issues.

Our developments and innovation throughout the year have been considerable. Our IP is core to our technological leadership and our progress illustrates our vision and determination in remaining ahead in an increasingly competitive market. Our achievements have been recognised throughout the industry and we have won numerous awards such the Best Innovation in Cloud Services award during the Ovum On The Radar Awards 2017.

Read more about significant innovations over the year in the Innovation – Developing solutions for all our customers section

Future Focus

Our innovations within the grocery and wider e-commerce space drive growth and create long-term shareholder value. We are confident in our ability to commercialise on this knowledge through our Solutions business and are progressing our conversations with retailers across the world on how we can enable and support the growth of their online operations.

Patents

To ensure we protect the value of our solutions and maintain our competitive advantage within the space we take careful measures to protect our innovations and intellectual property. We operate a structured and thorough patent filing and application process to safeguard our solutions. Our patent activities are intended to create a web of protection for our intellectual property. As of the year end we filed patent applications covering 61 separate innovations. There are now 13 granted patents across 8 innovation families.

Progress

We continue to file patent applications to protect our proprietary knowledge. Over the year some of our earlier filed applications have granted and we expect many more to be granted over the next year. As our OSP solution and other technology evolves we expect to continue protecting our innovations in major markets in this way.

Future Focus

Our aim is to continuously innovate ahead of the market and maintain our industry leadership. We will ensure this by continuing to innovate and protect our intellectual property through our ongoing patent operations.

Risks:

  • Technological innovation supersedes our own and offers improved methods of food distribution to consumers
  • Protecting our IP
  • Infringing a third party's IP
Three people with laptop

Primary strategic actions

Enhance end-to-end technology solutions iconEnhance end-to-end technology solutions

Core to our business and competitive advantage is the proprietary IP, knowledge and technology that supports our market-leading proposition to customers and drives our operating efficiencies. We strive to continuously innovate ahead of the market to ensure we maintain our competitive edge. Throughout the year we have continued to actively file and pursue patent applications to help create a web of protection around our innovation and ensure we can benefit from its value. The majority of our patent applications relate to our physical infrastructure solution which is operational within our newest CFC in Andover and what will be used in our partnerships with Groupe Casino and Sobeys.

To enable us to innovate we ensure we invest in the right capabilities and resources within our business. We have extensive and growing technology and engineering teams, which by the end of the period comprised over 1,100 employees. Our technology teams operate out of multiple technology centres in the UK, Poland, Spain and Bulgaria, taking advantage of the significant technological expertise found in these regions.

Actions enable partners iconEnable current and future partnersʼ online businesses

As we continue to develop and innovate in our retail business we embed any improvements into our platform for existing and future partners.

Since launching their online business in January 2014 using our broader platform offering, our first Solutions partner, Morrisons, has seen strong growth at Morrisons.com. This year we have continued to enable their development through the provision of our store picking module, which allows them to service more of their customers and in catchment areas beyond the reach of their current CFC capacity. Morrisons launched the first live installations of the store picking capabilities this year and are due to continue to roll this out throughout the next year.

The validation of our Solutions business was further enhanced through the signing of our first three international partnerships this year. Groupe Casino, Sobeys and our regional European retail partner will benefit from our technology, know-how and support services required to create an efficient and intelligent online grocery business and we look forward to helping them grow their operations.

Looking ahead, we are confident that we will be able to do further deals with the momentum of new signings building over time.

Case Study

Developing voice-activated AI Capabilities for our consumers

Our technology teams are continuously pushing the boundaries of software development in e-commerce by releasing the most comprehensive and intuitive grocery shopping apps for iOS, watchOS and Android.

In August 2017, we extended our offering to include a new platform to our line-up and became the first global grocer to release a skill for Alexa, the AI-based personal assistant from Amazon. Industry forecasts indicate that by 2018, 30% of all web interactions will be through conversational interfaces. This, alongside our own research, has shown that many Ocado customers would benefit from voice-controlled smart assistants for grocery shopping.

Among other things, the skill enables customers to add items to their Ocado orders, check items within a basket, receive delivery updates, find the price of the current basket and even ask what's currently in season. This equips customers with the ability to maintain casual conversation with the assistant centred around their order based on AI-based algorithms, which establish the most likely product for the customer they are interacting with.

Innovations like these reflect our desire to constantly improve our retail proposition through technology so that our customers get the greatest value and convenience from their shopping experience. They also show the ways in which we will further improve the customer experience in the future.