Here's why we’re long past the point where grocery needs to rely on people across the fulfilment chain

Question: How many humans do you actually need to fill an online grocery order? Answer: as few as you want. The real question is how much you’re willing to invest to get there.

That's the view of Vineta Bajaj, Group CFO at Rohlik Group.

In a LinkedIn post, she said: "There was a time when people were essential at every step, especially when it came to produce quality, careful handling, and reactive thinking. And yes, there are still tasks where a human touch matters (for now..). But we’re long past the point where grocery needs to rely on people for every part of the fulfilment chain."

The industry is within reach of fully automated, “lights out” fulfilment centres in grocery, she beieves. And the technology is no longer theoretical. It’s operational. "So why am I so focused on reducing human involvement? Because, people are expensive!" According to McKinsey & Company, labour is the single largest cost in online grocery fulfilment. And it's not just salaries! There’s sick leave, paid time off, variable throughput, error rates, feelings.”

“I’ve seen this firsthand in my career at two of the largest pureplay online grocers in Europe (the other being Ocado). You can model margin all you like, but people always dominate the cost stack. The same report also found that automation can drive 300 to 500 basis points of incremental margin. For most grocery businesses, that’s the difference between losing money on every order and breaking even, or even turning a profit. In the age where cost of capital is high, that's really key."

We've successfully raised $170m in fresh growth capital. The investment was led by the @EBRD, alongside existing investors Sofina, Index Ventures, Quadrille, & TCF Capital & complemented by growth capital funding from the EIB under its Scale-Up Initiative.https://t.co/7BXIlVVAxh pic.twitter.com/OIRpks8d6r

— Rohlik Group (@rohlikgroup) June 28, 2024

Most UK and European grocers operate with net margins below 3%, and that’s in-store. When you shift to online, the economics get even tighter, You might be looking at negative margins on every unautomated order. It’s not a luxury to chase efficiency; it’s a financial necessity, Bajaj argues.

She added: "But this isn’t just about warehouse robotics or flashy capex headlines. It’s about operational discipline. Every step of the fulfilment process from inbound, decant, picking, sortation, final mile batching can be improved with some form of automation. And if you're a bricks and mortar grocer using a store-pick model? Even then, targeted automation and software can dramatically improve your pick rate and reduce manual intervention."

"This isn’t about being “anti-human.” It’s about being pro-efficiency in a category where net margins are often less than 3%. So no, automation isn’t optional. It’s the infrastructure that makes online grocery work, at scale, and at profit."

2025 RTIH INNOVATION AWARDS

Automation will be a key focus area at the 2025 RTIH Innovation Awards.

The awards, which are now open for entries, celebrate global tech innovation in a fast moving omnichannel world.

Our 2024 hall of fame entrants were revealed during an event which took place at RIBA’s 66 Portland Place HQ in Central London on 21st November, and consisted of a drinks reception, three course meal, and awards ceremony presided over by comedian Lucy Porter.

In his welcome speech, Scott Thompson, Founder and Editor, RTIH, said: “The event is now into its sixth year and what a journey it has been. The awards started life as an online only affair during the Covid outbreak, before launching as a small scale in real life event and growing year on year to the point where we’re now selling out this fine, historic venue.”

He added: “Congratulations to all of our finalists. Many submissions did not make it through to the final stage, and getting to this point is no mean feat. Checkout-free stores, automated supply chains, immersive experiences, on-demand delivery, next generation loyalty offerings, inclusive retail, green technology. We’ve got all the cool stuff covered this evening.”

“But just importantly we’ve got lots of great examples of companies taking innovative tech and making it usable in everyday operations - resulting in more efficiency and profitability in all areas.”

Congratulations to our 2024 winners, and a big thank you to our sponsors, judging panel, the legend that is Lucy Porter, and all those who attended November's gathering. 

For further information on the 2025 RTIH Innovation Awards, please fill in the below form and we will get back to you asap.