Tesco is launching a new ecommerce initiative to compete with Ocado, as it aims to help international supermarket chains develop their online operations.
The venture, called Transcend Retail Solutions, is led by the supermarket giant’s strategy director Oliver Vogt and offers both software and hardware to enable global grocers to fulfil online orders directly from their stores, The Sunday Times reports.
In addition to its technology solutions, Transcend also provides consultancy services. The subsidiary has secured its first partnership with New Zealand’s largest grocery retailer, Foodstuffs North Island, and is in discussions with other retailers to strike similar agreements.
Tesco is a pioneer of online grocery shopping in the UK.
Today, the retailer processes over a million online orders each week, with 85% of them fulfilled directly from its supermarkets.
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“Our solutions are tried and tested,” Vogt said. “We set up Transcend because we truly believe we have something to offer the market.
New Zealand’s Foodstuffs is using Tesco’s cloud-based picking software, which receives online orders and then on handheld devices maps the most efficient route for staff to pick the items from supermarket shelves.
Tesco’s technology is currently operational in two Foodstuffs stores, operating under the Pak’nSave and New World brands, with plans to extend it to 150 locations.
This move is likely to catch the attention of Ocado, which has shifted from an online grocery business to an international technology provider.
Ocado has secured deals with global supermarket chains to construct large automated warehouses for them.
Recently, two of the firm’s major clients, Kroger and Sobeys, have slowed their warehouse expansions after online grocery demand did not meet expectations.
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