20 Nov 2019 2 min read

Warehouse wonders: three profiles in ecommerce innovation

By Aude Martin

A host of companies are finding innovative ways to support and expand the ecommerce revolution.


Amazon may have become synonymous with ecommerce, but it is far from the only company to have recognised the opportunities in this vast growth market.

In the first of this series of blogs on the ecommerce industry, I looked at the ways in which technology is changing not only how we shop but is also poised to reshape employment in the retail sector.

In this instalment, I wanted to highlight three companies that encapsulate different aspects of this revolution.

1. Ocado

In the UK, Ocado started with some pick-and-pack robots and mechanoid helpers for maintenance, but now has a highly automated warehouse in Andover. An aluminium grid for stacked storage is able to cope with more than a thousand robots traveling at speeds of up to four metres per second, versus a standard human walking speed of around 1.4 metres per second.

The warehouse stacks can be up to 17 boxes high and two robots passing items to one another need a gap of only around five millimetres. That not only saves a lot of space, but the fulfilment centre also uses algorithms to place the most frequently purchased items at the top of piles, minimising sorting and picking time. Ocado is now able to deliver 260,000 orders a week, with its robots able to assemble 50-item orders in about five minutes.

Such efficiency has allowed Ocado to launch initial tests for its Ocado Zoom service, which has already received a strongly positive response from customers. It consists of a same-day delivery service, whereby groceries can be delivered within an hour of the order being placed.

Having built a leading position in warehousing machinery, Ocado recently started selling its technologies. In a deal with US chain Kroger, Ocado’s fourth in six months, Ocado will seek to build 20 automated warehouses in America. Ocado has also agreed with Groupe Casino in France and Sobeys in Canada to build local warehouses on their behalf.

2. Walmart

In the US, meanwhile, Walmart recently announced a $1.2 billion investment in upgrading the logistics in its distribution centres in China. This follows the construction of its first customised perishable food distribution centre in the country.

China of course has the potential for incredible ecommerce growth; Transport Intelligence expects the broader Asia Pacific region to account for nearly half of global ecommerce revenues by 2023, with the proportion of online retail sales in China expected to approach 20%.

3. JD.com

Given this immense opportunity, local champions are emerging too. JD.com is already a leader in warehouse automation. Indeed, one of its 40,000 square-metre warehouses employs only four employees, otherwise being fully operated by robots performing tasks from packaging to lifting and transporting items to docks. The company’s human employees principally provide oversight of operations. These particular robots were developed by MUJIN, a Japanese company, and are able to process about 200,000 packages a day.

JD.com’s fierce local competitors, such as Alibaba, have forced it to build a faster and tighter supply and delivery chain to respond to surging demand – a story playing out across the world.

In the next blog in this series, we will explore the challenges of cross-border ecommerce.

Aude Martin

ETF Investment Specialist

Aude joined L&G ETF in July 2019 as a cross-asset ETF Investment Specialist. Prior to that, Aude worked as a delta one trader at Goldman Sachs and within the structured-products sales teams at HSBC and Credit Agricole CIB. As an investment specialist, she contributes towards the design of investment strategies and actively supports the ETF distribution and marketing efforts. She graduated from EDHEC Business School in 2016 with an MSc in Financial Markets.

Aude Martin