Coles on fast track to boost online services

Coles has secured sites in Sydney and Melbourne for two hi-tech customer fulfilment centres.

Coles is spending $150m over four years to improve its online business. Picture: Getty Images

Coles has taken a significant step forward in the rollout of its state-of-the-art distribution centres after securing sites in Sydney and Melbourne for two hi-tech customer fulfilment centres that will enable Coles Online to offer a faster and more efficient service.

The property deals come as retailers and fashion chains report massive leaps in their online transactions, driven by consumers being locked at home and in ­isolation.

Woolworths is accelerating its investment in its own online capabilities and Coles is also investing big in improving its websites as well as back-of-house technology to prepare for what should be an even faster take-up of online shopping by Australian consumers.

It is the latest step following last year’s announcement that Coles would spend up to $150m over four years to take the online fight to new entrant Amazon, as well as beef up its shopping platform to combat local rivals, by announcing a tie-up with global logistics player UK-based Ocado.  The deal unveiled in 2019 will almost double Coles’ capacity to do home deliveries from online orders, making it a leading player in online grocery shopping.

Coles said on Wednesday it had signed agreements with Charter Hall Group for long-term leases on two new sites to house the CFCs in the Horsley Drive Business Park in Wetherill Park, NSW, and the MidWest Logistics Hub in Truganina, Victoria.

Ocado will be responsible for the installation and maintenance of automation equipment in the CFCs. Development of the CFCs will support more than 600 jobs during construction and fit-out, while a total of 600 additional ongoing jobs, including skilled technology roles, will be created at the CFCs once they commence operation in fiscal 2023.

Coles chief executive Steven Cain said the investment in Coles’ technology-led transformation would support much-needed employment opportunities at a time when COVID-19 had led many businesses to cut or delay their investment plans.

“We remain committed to our strategy of ‘Smarter Selling’ through efficiency and pace of change, while partnering with world-class technology partners to provide the capability we need for a second century of sustainable growth,” he said.

Mr Cain added that Ocado’s online fulfilment solution, which also included new website technology for Coles Online and Ocado’s delivery management technology to maximise transport efficiency, would transform the Coles Online experience for customers while reducing waste and improving safety for team members.