Ocado Acquires Stake in Automated Pickup Solution Myrmex

In a move that could marry the last mile of online grocery to the first behind efficient robotics, Ocado Group has acquired a stake in Myrmex Robotics, the Fremont, Calif.-based material handling firm that has developed a solution to enable an autonomous marshaling and retrieval system for click-and-collect orders.

Ocado, the online grocer pioneering a robotic picking solution in the U.K. and now at work on a series of massive warehouses with Kroger in the U.S., said it has acquired Myrmex’s intellectual property and has appointed the company to develop a bespoke product. Ocado said it would take a board seat at the company, and also has the option to participate in future finance offerings with Mymex.

Financial terms were not immediately disclosed.

As WGB reported earlier this year, Mymex has developed a comprehensive robotic solution that if commercialized, would enable retailers to offer efficient and contact-free stations where online shoppers could retrieve their own groceries in seconds, either built into stores, at purpose-built walk-up or drive-up lockers, or in “dark stores” devoted entirely to pickup. In an interview, Myrmex founder and Lead Strategist Ioannis Kanellos said the system is based on a combination of robots shuttling proprietary racks and containers, enabling space-saving storage and efficient retrieval—likening its potential in retail grocery to the revolution the shipping industry brought about by “containerization” in the 1960s.

Although the companies did not immediately share specific plans for products to be developed, such a system could introduce big changes in how grocers orchestrate the current process of pickup, which like the assembly of orders, currently relies primarily on the retailer’s own workers doing the labor physical shoppers do for free—first, picking orders from store shelves; and then, carrying them to waiting customers when they arrive or delivering to their homes. That is a major impediment to profitability and pricing for online grocery, retailers say, and in some cases has introduced operational issues in stores and chaotic scenes at pickup.

Many retailers are currently outsourcing these tasks to third-parties, but that too can be problematic to the extent they can interfere with retail-customer relationships, data and service, sources say.

Click-and-collect is a preferred method of online grocery fulfillment—particularly in the U.S.—both because it saves retailers the expense of the “last mile” delivery, but also because a number of customers tend to prefer the convenience of retrieving orders at stores that are close to their homes or places of work at times most convenient to them. Online grocery and so-called “contactless” solutions have in the meantime exploded since the global COVID-19 pandemic, bringing online volumes triple-digit growth and growing the percentage of the overall business to a point where investments in technologies make more sense for retailers, sources say.

One potential Mymex solution detailed in an online video shows a shopper checking in using a phone scan at a walk-up window resembling an ATM, then retrieving an order at an adjacent window. Behind the scenes, a series of shuttles and lifts move about binned orders on stackable racks, then marshalls racks of empty bins for delivery back to warehouses. That would autonomously marry many aspects of Ocado’s robotic assembly of orders with dispersal and retrieval.

 “We’ve been impressed with Myrmex’s capabilities and are excited about the potential synergies with our existing business,” Alex Harvey, engineering director for OSP handling robotics at Ocado Technology said in a statement. “As the shift to online grocery accelerates, we are moving even faster in adding intelligence and automation to our end-to-end solution offering. Myrmex can play a part in that journey.”

George Katiniotis, CEO of Myrmex stated: “With over 20 years of experience in transforming online grocery through cutting-edge technology and automation, Ocado Group is widely recognized as the leader in this space. The company’s investment is testament to Myrmex’s robotics and automation capabilities and will enable us to accelerate the commercialization of our product portfolio.”

Other tech solutions focused on improving pickup efficiency are also looking to expand commercially in the U.S., including European companies like Cleveron and Retail Robotics, which specialize in compact refrigerated pickup lockers popular in Europe.

Myrmex, established in 2015 and with research and development in Athens, Greece, said it targets the European, U.S. and Middle East online markets, mostly focusing on the last mile delivery. The system also takes care of replenishment, returns, temperature controls, and payment methods. Myrmex was initially funded by EIF-backed venture capital fund Odyssey, and more recently by a small number of private investors.

Ocado Group is a UK based technology company providing automated online grocery fulfillment solutions to some of the world’s largest grocery retailers and holds a 50% share of Ocado Retail Ltd in the UK in a joint venture with Marks & Spencer. Ocado says it has spent two decades innovating for grocery online, investing in a wide technology estate that includes robotics, AI and machine learning, simulation, forecasting, and edge intelligence. Its Ocado Solutions group licenses its technology to a range of international retailers including Kroger in the U.S., which signed an exclusive partnership with Ocado in 2018 and is in the process of building as many as 20 customer fulfillment centers with Ocado, the first of which are expected to open early next year.