Using a system built in house, Ocado is in the process of eliminating manual review and sorting of the more than 2,000 daily customer service emails it receives. British web grocer Ocado Group Plc. receives about 2,000 customer service emails a day on average. That number can easily double or triple during the holiday season or when other issues come up such as bad weather that may delay a customer's order, says Dan Nelson, head of data for Ocado, No. 23 in the Internet Retailer 2016 Europe 500. Nelson says the problem until recently is that retailer, which sells solely online and was launched in 2000, used to task its customer service staff with going through and sorting each email that came in. "A lot of customer service reps' time was spent filtering emails," Nelson says.
Like so much in Britain, you can credit the weather for this. Ocado has rolled out AI using Google's open-source TensorFlow to improve service at its customer call centre. The online food retailer took six months to build and install a system based on machine learning., using Python, C, Kubernetes on Google Compute with TensorFlow. The cloud-based AI will do the heavy lifting for inbound customer emails, opening and scanning for key words and context, before prioritising and forwarding them. On an ordinary day the system handles 2000 messages and double that at busy times such as Christmas.
Ocado, the UK leader in home-delivered groceries from robot-run distribution centers, has established a licensing deal with US grocery chain Kroger (NYSE:KR) whereby Kroger will take a 5% stake in Ocado – an investment valued at $247.5 million and Ocado will help Kroger set up systems to manage online ordering, fulfillment and delivery operations utilizing Ocado-proven technologies. Ocado will see the Kroger chain build up to 20 Ocado-designed robot-run warehouses over its first three years. In a recent letter to Kroger stockholders, CEO Rodney McMullen said that Kroger is redeploying capital to emphasize improving its digital capabilities and enabling customers to shop in the store, by ordering online and picking up their order at the store, or getting their groceries delivered to their homes. Although McMullen didn't single out Amazon or any other competitors in the supermarket arena, Amazon's acquisition of Whole Foods and Walmart's price-cutting moves and partnering with online grocery deliver service Instacart are rapidly changing the landscape of grocery shopping. "Kroger is right in the middle of such a reinvention," McMullen said in the shareholder letter.
Ocado shares have dropped 6% and the retailer has warned over a hit to sales following a huge fire which swept through its warehouse in Hampshire. About 200 firefighters spent the night tackling the blaze, which broke out on Tuesday morning. The online grocer said it expected a fall in sales growth until it could shift operations to other warehouses. More than 30,000 orders are processed by robots at the Andover warehouse each week. Ocado has not given any detail about what the impact will be to customers.
Being the world's largest online-only grocery supermarket with over 500,000 active customers means we get the opportunity to interact with people all across the UK on a daily basis. Ocado prides itself on offering the best customer service in the industry which is one of the many reasons why our customers keep coming back. Since Ocado doesn't have physical stores, there are mainly two ways our customers and our employees interact directly. The first (and probably most common) is when our drivers deliver the groceries to the customers' doorsteps; the second is when customers call or email us using our contact center based in the UK. Today we're going to tell you a bit more about how a customer contact center works and how Ocado is making it smarter.