Kroger takes flight with drone delivery test

Discussion
Photo: Kroger/Drone Express
May 04, 2021

Kroger thinks that drone deliveries have the potential to help transform its e-commerce operations.

The largest grocery chain operator in the U.S. announced yesterday a pilot program testing the use of autonomous drones to deliver online orders from a Kroger in Centerville, OH.

Jody Kalmbach, group vice president of product experience at Kroger, called the test an “evolution” of the company’s seamless shopping ecosystem including pickup, delivery and shipping.

“The pilot reinforces the importance of flexibility and immediacy to customers, powered by modern, cost-effective and efficient last-mile solutions. We’re excited to test drone delivery and gain insights that will inform expansion plans as well as future customer solutions,” Ms. Kalmbach said in a statement.

Kroger’s online sales topped $10 billion in 2020 as the company pushed ahead with a multi-year plan to meet consumers where, when and how they find most convenient.

The pilot program, run with Drone Express, a division of Telegrid Technologies, enables Kroger to identify dropoff points based on the location of a customer’s smartphone. This means that the store testing the drones will be able to bring condiments, sunscreen or other items to a park, for example, if a customer forgets to pack them for an afternoon picnic.

Customers placing orders can get their products within as little as 15 minutes. There are weight limits, however, with each order having a five-pound capacity. Kroger is offering special product bundles, such as child wellness (over-the-counter medications, wipes, etc.) and S’mores, which comes with all the fixings for the gooey, sugary summer delight. Customers at the Centerville store may place orders by going to Kroger.com/DroneDelivery.

Test flights will be managed by licensed Drone Express pilots from an on-site trailer at the Ohio store. Additional monitoring of the drones will be handled at an offsite location. Kroger has scheduled the first Centerville deliveries to begin later this spring. The retailer plans to run a second pilot from a Ralphs store in California at some point during the summer.

“The launch of the pilot in Centerville is the culmination of months of meticulous research and development by Kroger and Drone Express to better serve and meet the needs of our customers,” said Ethan Grob, Kroger’s director of last mile strategy and product. “We look forward to progressing from test flights to customer deliveries this spring, introducing one more way for our customers to experience Kroger.”

DISCUSSION QUESTIONS: Why do so many retailers seem intrigued about the use of drone technology to make deliveries? Do the numbers of pilots being run by major retailers — Amazon, Kroger, 7-Eleven, Walgreens and Walmart — lead you to think that this delivery method will be viable at some point in the future?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Someday it will be viable but not today. If it looks like a gimmick, walks like one and sounds like one then it must be a gimmick. "
"Kroger has taken bold steps to experiment with drone delivery. However until it’s scalable, it will remain a novelty."
"If I'm the leaders in ground transportation, I'm paying attention."

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37 Comments on "Kroger takes flight with drone delivery test"


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Neil Saunders
BrainTrust

I love the idea of being able to quickly order products for delivery to your current location and I do see some potential in this. However it’s pretty niche and given the weight limits and other operational challenges I cannot see drones becoming a big part of Kroger’s fulfillment infrastructure any time soon. That doesn’t mean they’re not right to test and trial these things though.

DeAnn Campbell
BrainTrust

The weight is a big issue, and I certainly wouldn’t want an army of drones flying over my house to make daily deliveries to people in my neighborhood. It feels to me more like another tool in the tool chest to create a brand experience. Walgreens saw an uptick in food orders when they used Wing to deliver meals to nearby customers via drone, because the customer enjoyed the unique experience.

Mark Ryski
BrainTrust

The idea of drone delivery captures the imagination, and the benefits if it could be implemented in an ideal world are compelling. But there’s one big problem: it’s not an ideal world. There are still many challenges with drone delivery that may never be completely resolved. First, drone flight regulations. In most places drone flights are prohibited, and so this will remain a challenge until formal flying regulations are established. Second, the five-pound maximum is problematic. Of course it works for small items but, as a grocery chain, many products won’t be suitable for drone delivery. I think the interest among these players is because the potential is intriguing and so testing and experimentation make sense, but practically drone delivery has a long way to go.

Venky Ramesh
BrainTrust

If this pilot by Kroger is successful, customers all over the U.S. may be able to have their package delivered to the location of their smartphone, be it to their home, at the beach, or even the middle of nowhere. The only catch there is a weight limit of five pounds. We can work with that for now.

Not sure if the CFC they recently built in partnership from Ocado comes with launch/landing pads for drones. In any case, that is how the future MFCs should be built.

Gary Newbury
Guest

Innovative thinking may about to be unleashed of how to scale beyond the pilot.

Imagine running out of some spices or essential ingredient for a meal … 15 minutes later, you have it in your hand, contactless, hassle free!

The piece that I would want to know more about is the transmission of fulfillment (picking) and delivery (ETAs etc) information, to help the customer know it’s on it’s way and the time I expect to receive this, and a screen that I could enquire to check its location.

The other concern is adverse weather, such as torrential rain, high winds, snow and ice.

Still lots of potential to attract or retain customers looking to have a new experience from their dialing up of online services.

David Naumann
BrainTrust

Solving the last mile of delivery for grocery is the Holy Grail. Leading grocers and other convenience retailers are testing and piloting several options to identify a better way to get products to consumers faster and more cost effectively. Drones manned by humans seems expensive, but it is probably a good way to test the feasibility of the concept until more innovative technology is available. Delivering products to wherever customers are is a compelling proposition and it will be a customer expectation in the future.

DeAnn Campbell
BrainTrust

Here’s a thought — wouldn’t it be fun if a version of drones could deliver food orders from the QSR in the terminal directly to travelers at their gate? I’d pay extra to avoid wading through crowds for a beverage before my flight. 🙂

David Naumann
BrainTrust

Great idea!

Matthew Brogie
BrainTrust
5 months 19 days ago

I certainly agree that the last mile of delivery is the Holy Grail. Why? It’s really just a simple question of weight ratios, isn’t it?

Seriously, since the payoff of getting there is so high and the problem is so big, it requires huge organizations with a vested interest to solve. I expect the problem will be solved faster and the tech to enable the solution will arrive faster *because* there is substantial effort and investment from companies like Kroger who generate $Billions in profit. We’re still very early in the process, and it will take a lot of trial, error and evolution to get to where we will undoubtedly be at some point in the future.

Shep Hyken
BrainTrust

Retailers have to find ways to get their merchandise to their customers in the fastest and most efficient way possible. Amazon has taught the consumer to expect fast delivery. Retailers are working hard to find solutions to meet their customer’s high expectations. Drone delivery may be one of the answers.

Suresh Chaganti
BrainTrust

Drones are one of the methods retailers are trying out. Amazon has been doing it for years. There are many paths to figure out the last mile – Target is trying with crowdsourcing, something Walmart also tried in the past. Kroger is also building MFC. And we have Urbx with a vision of a fully-automated MFC plus store.

The reality is, no one has figured out the last mile yet, and a lot of innovation and experimentation is going on, which is great. In my opinion, additional layers of stock locations/neighborhood stores are required a go-between DC – MFC/store – consumer. Think of one store every five square miles, within the neighborhood that can be autonomous vehicle-friendly.
A combination of proximity + right transportation method (including drones) and sophisticated demand forecasting and replenishment processes could be the solution.

Richard Hernandez
BrainTrust
Richard Hernandez
Director, Main Street Markets
5 months 19 days ago

First, the weight limit will reduce the number of items that could be delivered. Second, I know the flight regulations are still a big deal and not really 100 percent ironed out. And when fees are finally set, I would guess it wouldn’t be cheap because you have to pay for the technology somehow. For me, I don’t see using it to order and deliver a Slurpee from 7-Eleven…

Rick Watson
BrainTrust

In three years Kroger will retrench. How many of the Ocado centers will stick? What percentage of deliveries will be done by drone? Kroger != Amazon. I think they have the “me too” disease.

DeAnn Campbell
BrainTrust

I agree with you Rick. I think their profit margins took a hit over 2018 and 2019 so they are trying everything to see what works. But ultimately they will likely see more benefit from focusing on private label than on drones.

Gene Detroyer
BrainTrust

Here is what Kroger knows … in the future, groceries will be delivered autonomously.

Here is what they don’t know … which way will be the best to do it.

So let’s try everything and see which fails, morphs into something else or is a straight-out success.

Jennifer Bartashus
BrainTrust

Drones are a great way to capture media impressions, capture the imagination of the public and positively influence consumer perception about how technologically progressive a company is, much in the same way as autonomous vehicles did a decade ago. Kroger has invested heavily in its omnichannel strategy, so it makes sense drones are being tested as part of it. The capabilities of drones will certainly expand over time – but for now, range (can it really get all the way to the park or beach and back?), weight constraints and regulations may make the biggest ROI from drones come in the form of positive sentiment vs. any major step-change in the retail landscape.

Ken Morris
BrainTrust

Someday it will be viable but not today. If it looks like a gimmick, walks like one and sounds like one then it must be a gimmick. Perhaps the drone will be run down in the driveway by my autonomous Muskmobile. We have an insatiable appetite for instant gratification but this is too soon to really make sense. Maybe we should consider paying a livable wage instead of inventing new ideas on how to eliminate people.

Dave Bruno
BrainTrust

The “drop in on me anywhere” use case is fascinating. However, I am not convinced the demand for this service will ultimately outweigh the logistical costs and challenges Kroger will face implementing it. Offering prepared foods will help with demand, I think, but I’m still not convinced this will, ahem, take off. Plus, am I required to tip a drone?

David Mascitto
BrainTrust

What intrigues retailers about the use drone tech? I would say costs. It could potentially be more cost-effective to deliver small packages by drone (especially if their flight paths are pre-determined vs. remote controlled) than having couriers drop off packages to each home as is done today. I could see this working for a 7-Eleven or Amazon — maybe Walmart where orders are single box shipments or smaller. Not so sure about grocery delivery with heavy and bulky goods.

Bob Phibbs
BrainTrust

It’s great PR, but how does this pencil out on a cost per order basis? Are we enabling traffic in the sky for lip ointment? Serving rural Australia or somewhere remote I can see, but Dayton or NYC? This has a long way to go for practical sense.

DeAnn Campbell
BrainTrust

The last mile is the most expensive, and most critical mile. The physical point where the product gets into the hands of the customer is where future business is won or lost. Delivering through 3rd parties like FedEx, UPS or Shipt water down that connection between brand and customer and take away the retailer’s ability to control the brand experience. Drones may not be ideal and have many limitations, but they are a first step toward retailers restoring that direct chain of custody from brand to customer.

Paula Rosenblum
BrainTrust

Testing is always good. Pilot programs (oh dear, that’s a pun) will let retailers know if it’s a cost-effective approach.

Meanwhile, high school students everywhere are honing their BB gun skills to take on the drones.

Rather than say or nay on this one, I’d like to just watch it play out.