UK – Tesco, a British multinational groceries retailer, is launching a new e-commerce initiative, Transcend Retail Solutions, aimed at supporting international supermarket chains in enhancing their online operations.
The initiative, led by Tesco’s strategy director, Oliver Vogt, will provide both software and hardware to enable grocers to fulfill online orders directly from their stores.
Transcend will also offer consultancy services, helping retailers optimize their digital operations.
Meanwhile, the venture has already secured its first client, Foodstuffs North Island, New Zealand’s largest grocery retailer, and is in discussions with other supermarket chains to expand its reach.
Vogt emphasized Tesco’s extensive experience in the online grocery sector, noting that 85% of Tesco’s more than a million weekly online orders are fulfilled directly from its stores.
“Our solutions are tried and tested,” Vogt said. “We set up Transcend because we truly believe we have something to offer the market.”
Currently, Foodstuffs is currently using Tesco’s cloud-based picking software, which streamlines the process of fulfilling online orders by mapping the most efficient route for staff to pick items from supermarket shelves.
This technology is operational in two of Foodstuffs’ stores, with plans to extend it to 150 locations.
This move puts Tesco in direct competition with Ocado, a company that started as an online grocery retailer but has since transformed into an international technology provider.
Ocado focuses on creating large, automated warehouses for grocery retailers around the world using its Ocado Smart Platform.
One of its key partnerships is with Australian supermarket chain Coles, for which it has developed robotic warehouses in Melbourne and Sydney. However, these warehouses have faced repeated delays due to construction issues.
Ocado’s CEO, Tim Steiner, emphasized the importance of these Customer Fulfillment Centres (CFCs), which aim to transform the online grocery experience by enabling next-day delivery across Australia by the end of the year.
Despite Ocado’s technological investments and strategic global partnerships, recent reports suggest that two of its major clients, Kroger and Sobeys, have slowed down their warehouse expansions due to lower-than-expected demand for online groceries.
The competition between Tesco’s Transcend and Ocado highlights a growing trend where supermarket chains are investing heavily in e-commerce technologies to keep up with evolving consumer behaviors.
Tesco’s approach focuses on optimizing in-store fulfillment with its well-established infrastructure, whereas Ocado bets on sophisticated automation and AI-driven warehouse systems.
As Tesco expands its presence in the international e-commerce space, its new platform will likely attract further interest from grocers seeking to enhance their digital capabilities and improve customer experience.
Meanwhile, Ocado continues to refine its warehouse technology in response to fluctuating demand.
