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Developing a Profitable Online Grocery Logistics Business: Exploring Innovations in Ordering, Fulfilment, and Distribution at Ocado

In: Contemporary Operations and Logistics

Author

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  • Robert Mason

    (Cardiff University)

Abstract

In this chapter, I seek the answer to a single question: is it possible to set up and operate a successful, profitable, online grocery business? The answer is sought and illustrated by reference to a single case study methodology to analyse the UK company, Ocado. It is recognised that the grocery retail sector is unusual in that customers invariably purchase multiple items at one time, that the product mix contains multiple items that are perishable within a defined time period, that the products demanded fluctuate widely according to seasonal factors, and that Ocado has a unique place within the UK retail sector. Nevertheless, the detailed examination of the practices of Ocado offered in this chapter illustrates a model whereby the focal point company proceeds via disintermediation of several of the conventional stages of the supply chain. Key is the allocation of time to the three main remaining processes: order taking, order picking or fulfilment, and order delivery. In so doing, Ocado has established a unique first-mover advantage in online grocery retail that will be difficult to supplant.

Suggested Citation

  • Robert Mason, 2019. "Developing a Profitable Online Grocery Logistics Business: Exploring Innovations in Ordering, Fulfilment, and Distribution at Ocado," Springer Books, in: Peter Wells (ed.), Contemporary Operations and Logistics, chapter 0, pages 365-383, Springer.
    • Handle: RePEc:spr:sprchp:978-3-030-14493-7_19
    DOI: 10.1007/978-3-030-14493-7_19
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