Ocado has revealed it has filed patents for a “new, modular, scalable, physical fulfilment solution” for its warehouses that “combines extremely dense storage, rapid retrieval and fast picking of single items”.
Last September, Ocado fended off criticism from analysts who claimed that its technology - most of which is developed internally - was not unique. At the time, the retailer told ComputerworldUK that the analysts would have missed about 14 patents Ocado had filed due to a time lag in the patents register.
It claims that the new proprietary infrastructure solution has more benefits than existing infrastructure assets or any commercially available alternatives.
“Successful development of this infrastructure solution will vertically integrate our platform of software, electronic and mechanical systems required to operate online retail operations efficiently,” it said today in its financial results for the year ot 30 November 2014.
“[It] should significantly exceed the operating efficiency we have achieved in our existing CFCs [customer fulfilment centres].”
Ocado’s warehouses process an average of over 167,000 orders a week, up from 143,000 in 2013.
According to Ocado, the new product storage and retrieval system incorporates innovation such as a “highly sophisticated proprietary communications technology” that can interact inside a building with thousands of devices, multiple times per second.
The company said it is currently testing key parts of the infrastructure solution and that it is “confident” in its capabilities. In order to protect its intellectual property (IP), it has also filed for patents for the innovative technology.
It also has patents pending for purpose-designed bagging machines that it started operating in two of warehouses - Hatfield and Dordon - in the second half of last year.
Improving the user interface to encourage loyalty
In addition to making improvements in the technology platform, Ocado said that it has continued to improve the user interface for its shoppers, so that they become regular and loyal customers.
“Features such as Import Your Favourites, shortened registration processes and the introduction of payment by PayPal are proving to be particularly useful in encouraging customers to shop for the first time and on subsequent occasions, with customer retention rates from first to fifth shop modely improving over the period,” it said.
Many customers are also shopping via mobile devices. Nearly half (48 percent) of all orders delivered last year were checked out over a mobile device, with mobile apps accounting for over 37 percent of all checkouts, Ocado said.
“In January 2015 we launched our new mobile website to complement our mobile apps, which we anticipate may be particularly attractive to new customers,” it added.
Ocado reported a pre-tax profit of £7.2 million for the year, up from a loss of £12.5 million in 2013.