A good week for UK retailers Ocado and Next: RTIH rustles up the retail technology week in numbers

Do you like numbers? Do you like retail systems news? Then this is the article for you. Including Co-op, Polytag, Ikea, Shelter, StrongPoint, AutoStore, Sephora, Wincanton, InPost UK, Verity, and Primark.

100…Autonomous warehouse drones specialist, Verity, has surpassed 100 client sites worldwide.

The latest addition is a KeHE site in Portland, Oregon, USA, building multiple other locations already equipped in its food distribution network.

£2.9 billion…Next’s half-year sales rose 8% to £2.9 billion. Pre-tax profit was up 7.1% to £452 million. And full-year pre-tax profit guidance was upgraded by £15 million to £995 million.

Aarin Chiekrie, Equity Analyst, Hargreaves Lansdown, says: “Next has been on a hot streak of delivering positive news lately, and today’s results didn’t disappoint investors. Just six weeks after its last upgrade, it has issued yet another improved profit outlook as sales since the half-year mark landed higher than previously expected.”

“Skyrocketing demand in its online channel remains a running theme. Despite already accounting for more than half of group sales, the online channel is still seen as the main growth driver. Expansion overseas is still in the early stages, and if Next can execute its strategy well, there’s a lot of room left to run.”

Chiekrie added: “Retail is a different story, with in-store revenue falling 2.1% in the first half. That trend’s not expected to change going forward, with high street shopping in structural decline. Next has some insulation in the fact that its shops typically have shorter, more favourable leases than peers, and are more focussed on out-of-town retail outlets that have fared better.”

“Full-price sales continue their upward trajectory. Delivering what fashion-conscious consumers want at the right price point is exactly what’s helping to keep Next’s profitability at the top end of its peer group.”

“Overall performance has been good, and the current valuation doesn’t fully reflect the growth opportunities at hand. But expanding overseas isn’t easy, as many of its peers have found out the hard way, meaning some ups and downs could be in-store along the way.”

15.5%…On Thursday, Ocado released figures for the 13 weeks ending 1st September.

Aliyah Siddika, Retail Analyst at GlobalData, comments: “Ocado Retail has successfully implemented its 'Perfect Execution Plan', sustaining its positive performance in the first half of the year by achieving a 15.5% revenue growth in the third quarter.”

“Ocado has revised its full year revenue guidance upwards to reflect a projected low double digit growth, indicating it is a destination for online food and grocery shoppers. Its share price rose by almost 10% in early morning trading, reflecting this positive sentiment.”

However, despite its positive performance, the profit guidance for Ocado Retail has not increased, indicating that it may take some time before it significantly contributes to the overall profitability of the Ocado Group.

The grocer's focus on enhancing its value proposition through initiatives such as the Ocado Price Promise and the recent launch of its sixth round of price cuts under the Big Price Drop has yielded favourable results.

Siddika says: “Amid the growing online food and grocery market, which we anticipate will rise by 6% in 2024, Ocado Retail has demonstrated resilience by maintaining its position as a leading online grocer. Its 'Express It' service, offering same-day delivery slots, was instrumental in driving a notable 14.7% increase in average weekly orders.”

“Ocado Retail has remained competitive amidst the growing popularity of Tesco's Whoosh same-day delivery initiative and rapid delivery services like Deliveroo and Uber Eats encroaching upon the grocery market by delivering groceries from convenience stores and supermarkets alike.”

“The online grocer's implementation of targeted promotional discounts, such as offering 25% off on the first purchase, has also proven effective in attracting new customers. Ocado Retail has surpassed the milestone of one million active customers, indicating a significant increase in its market appeal within the UK.”

Siddika concludes: “Yet, the average basket value at Ocado Retail has shown a lack of growth compared to other key performance indicators this period, with a modest increase of 0.2% in the third quarter.”

“As consumers focus on value for money, the grocer must encourage customers to trade up to more premium products. Ocado's current product range lacks sufficient innovation, especially compared to competitors like Waitrose, which has successfully collaborated with renowned brands such as Ottolenghi and health brand Zoe to offer unique products at higher prices.”

“Ocado must follow suit to strike the right balance between its value proposition and premium quality.”

£100,000…Polytag has been awarded over £100,000 from the Small Business Research Initiative (SBRI) Centre of Excellence, funded by the Welsh government, to install four Polytag Plastic Detection Units across the country.

The Plastic Detection Units, which scan and collect data on individual products at barcode level as they enter the recycling stream, will be placed at key material recovery facilities (MRFs) in Conwy, Gwynedd, Pembrokeshire, and Anglesey.

The funding has been granted to Polytag as part of an upcoming circular economy innovation project to help the Welsh public sector achieve net zero by 2030.

3…Asda co-owner Mohsin Issa is stepping back from his executive leadership role, with Lord Stuart Rose assuming his executive responsibilities alongside Rob Hattrell, a Director on the Asda board with experience at eBay Europe as Senior Vice President.

Eleanor Simpson-Gould, Senior Retail Analyst at GlobalData, says: “The announcement that Lord Rose is to be joined by board director Rob Hattrell to get Asda back on track is reassuring, given both are well versed in running large retail operations. Under a brightening spotlight, the transition must be swift to turn around its dismal sales performance and provide stability at the grocer.”

She adds: “Asda’s third place position in the UK’s food and grocery sector has been under threat as the grocer’s value proposition has failed to resonate with consumers. GlobalData expects Aldi to approach Asda’s market share by 2027 and could overtake it by 2028.”

“Asda must focus on its online capabilities this year to reestablish itself as a dominant player in the market and Hattrell’s online expertise will aid growth in its digital channel.”

5…There are only five weeks left to submit your entries for the 2024 RTIH Innovation Awards. Deadline for submissions is Friday, 25th October.

The awards, sponsored by CADS, 3D Cloud, Retail Technology Show 2025, and Business France celebrate global tech innovation in a fast moving omnichannel world.

It's free to enter and you can do so across multiple categories.

Download our handy guide to entering the 2024 RTIH Innovation Awards.

Friday, 25th October: Award entry deadline 

Tuesday, 29th October: 2024 shortlist revealed

30th October-6th November: Judging days

Thursday, 21st November: Winners announced at the 2024 RTIH Innovation Awards ceremony, to be held at RIBA’s 66 Portland Place HQ.

24…Co-op is launching 24-hour delivery from stores in city centre locations, via its partners Deliveroo, Just Eat and Uber Eats.

New research from the UK convenience retailer shows that over 40% of quick commerce shoppers would use a 11pm to 5am delivery service if available.

This figure rises to around almost one in two consumers aged between 18-44, with the service most popular for Gen Z shoppers aged 18-24 (52.3%) who are most likely to use the offering.

Further research suggested that those in London were most likely to use it (55.2%) with the data showing that those in Wales were least likely (26.47%). An estimated six million UK adults believe the main reason for this was due to their work pattern or shift.  

The 24 hour service is launching this month in Leeds, London and Manchester stores where there is strong online grocery demand at non-traditional times, with stores selected based on the local demographic, a concentration of delivery driver availability and where stores are already staffed around the clock for replenishment purposes.

In addition, Co-op has also extended its online availability in more than 1,600 stores within the store’s existing opening hours, helping more customers to shop later in the evening. This is part of its ambition to reach more than a one-third share of the quick commerce market.

151,630…Ikea and Shelter have unveiled an Unwelcome Home doll’s house, shining a light on life in temporary accommodation for thousands of children who are homeless in England.

The retailer has converted its FLISAT Doll’s Houses into unwelcome homes in London Wembley, Manchester (Ashton-under-Lyne) and Birmingham (Wednesbury) stores.

The display, which is based on lived experience insights, urges people to take a closer look at the reality for many of the 151,630 children homeless in temporary accommodation, revealing mouldy walls, rats, dangerous wiring, cramped spaces and mattresses on the floor.

$10 million…e6data has secured a $10 million Series A funding round as it aims to half the bill of businesses seeking to analyse their own data. This was led by Accel Partners with participation from Beenext and others. 

Data intelligence platforms allow enterprises to get insights from their own data to make business decisions and serve workloads including data engineering, analytics, machine learning, and now generative AI.

With the growing volume of data and the need to extract maximum value from it, enterprises will be looking at a sizeable bill to utilise this data. The total addressable market (TAM) for data and AI solutions is slated to touch $230 billion in 2025, with 60% of CXOs planning to increase their spending over the next year.

Vishnu Vasanth, Co-founder and CEO, says: “This rapid increase has made data intelligence platforms the second largest IT spending category – behind only cloud spend for operational systems and application infrastructure.”

“It’s fuellng the meteoric rise of data warehouse and data lakehouse companies such as Snowflake and Databricks, and the rapid growth of corresponding offerings from AWS, Azure, and Google Cloud.”

“Legitimate ROI concerns stand in the way of enterprises realising the full potential of data and AI.”

“Moreover, organisations cannot freely move lakehouse table formats, data catalogues, compute providers, and cloud providers without adverse price performance impacts, the need for data movement, and cumbersome application migrations. We aim to address this through our work at e6data” adds Vasanth.

£850,000 and £1.1 million…Glasgow-based marketing technology platform Triyit has secured an £850,000 investment, from the Investment Fund for Scotland (IFS), managed by Maven Capital Partners and delivered by the British Business Bank, as part of a £1.1 million funding round.

Triyit connects FMCG brands with target consumers through its performance sampling and research campaigns.

With over one million organic sign ups to the consumer facing “product discovery” side of the platform, it offers brands a way to hyper-target and engage the right audience, with built-in campaign mechanics delivering consumer insights, user-generated content and earned media influence as part of each activity.

Triyit works with a variety of brands, across all FMCG categories, from startups and challenger brands to market leading, global enterprise organisations like AB InBev, Costa, Arla, Mars and Kellogg’s.

The investment will support further development of the company’s data science function, bespoke technology platform, and the planned expansion of the wider service offering in the UK and international markets.

$150 million and $1 billion…Quick commerce startup Flink has raised $150 million at a valuation of approximately $1 billion.

BOND, Mubadala, Northzone, and supermarket giant REWE are all backing the company, along with two unnamed investors.

“This investment will enable us to further expand our footprint, improve operational efficiency, and continue delivering the fast, reliable service that our customers rely on,” says Oliver Merkel, Founder and Managing Director at Flink.

66% and 83%…New research from Wincanton reveals that 66% of UK organisations are under pressure to hit their net-zero targets, with logistics seen as key to achieving their goals in this area, according to 83%.  

Wincanton surveyed 515 UK supply chain, transport and logistics decision makers to uncover how organisations are reducing CO2 emissions in commercial transportation, in light of impending net-zero deadlines.  

Businesses aren’t making the progress they want, as 54% feel they will struggle to meet their net-zero goals. And they cite the reasons for this as cost impacts and concerns about the speed of viability of alternative fuel technologies. 

8,000…InPost UK has hit 8,000 parcel lockers.

In a LinkedIn post, it said: “You may be thinking “didn’t InPost just announce 7,000 lockers?” - and you’d be correct!  You asked, we delivered. With our growing locker network across the UK, we’re making it even easier and more convenient to pick-up and drop-off your parcels.”

The 8,000th locker can be found at Harvington Premier Convenience Store, Evesham.

54 and 57…Primark reports that 54 new stores are joining its Click & Collect service before Christmas.

The retailer is also introducing menswear to Click & Collect for the first time, launching in its 57 existing stores across England and North Wales from today.

A Primark spokesperson comments: “This is just the next step on our journey to a nationwide roll-out of Click & Collect across all our stores in England, Scotland and Wales by the end of next year. Stay tuned as more store dates and locations will be coming soon!”

1…StrongPoint has installed the world's first AutoStore Multi-Temperature Solution with a frozen zone.

The inaugural site is Haugaland Storhusholdning, part the Norwegian food distribution group DLVRY, in a facility based in Sveio, Norway.

"Frozen greatly boosts our operational efficiency and creates a safer work environment for our employees," says Oskar Kirkeleit, CEO at Haugaland Storhusholdning.

"This installation is designed for maximum efficiency in food distribution. We are proud to be the first to implement an AutoStore solution with a frozen zone, which is now a part of the customer's daily operations.”

$2 million…Cavela has officially launched and also announced a $2 million funding round led by XYZ Venture Capital, with additional support from Propel Ventures and Go Global Ventures.

For several months, the startup has been building an AI platform to connect product makers (e-commerce, boutique brands, startups) with the right supplier to manufacture physical products at the best price.

“Creating custom products is difficult, but with recent developments in AI, it doesn’t have to be,” says Anthony Sardain, CEO at Cavela.

“Large enterprises have dedicated teams to manage the complex process of product sourcing, but small and midsized businesses don’t have that luxury. We’re levelling the playing field, making it easier and more affordable for anyone to create custom products.”

1…The first ever Sephora Kiosk has opened at the University of Toronto Bookstore, featuring a curated selection of viral, best selling products as well as in the moment solutions.

It’s all about exploration, discovery, and meeting those beauty needs when they occur, the brand says.

Thomas Haupt, EVP, Country General Manager at Sephora Canada, says: “We are thrilled to share a little Sephora magic with our University of Toronto students and make beauty more accessible, meaningful, and inclusive.”

“A big thank you to Jane Nugent (Senior Vice President Merchandising at Sephora), Nikki Maruzzo (Director, Corporate Strategy and Strategic Projects), Johnna Marcus (Vice President, Growth Initiatives), Jane Hsu Wong (Senior Manager, Growth Initiatives), and our partners at Signifi Solutions for bringing this innovative retail experience to Sephora Canada.”