Will Albertsons have robots filling online grocery orders in its stores?
Albertsons announced earlier this week that it is engaging in a pilot to test a micro-fulfillment center that makes use of artificial intelligence and robotics to fill online grocery orders at the store level.
The system that Albertsons has chosen for the test creates a designated area within an existing store location, typically somewhere between 6,000 and 10,000-square-feet, where the most popular items ordered online are stored. When an order is received , the system uses totes and conveyors to deliver the selected items to an Albertsons’ associate, who will prepare the order for delivery. The vendor behind the system, Takeoff Technology, claims it greatly reduces the time it typically takes stores to fill individual customer orders.
Narayan Iyengar, SVP digital and eCommerce at Albertsons, said the test “is a major step in our commitment to being a customer-centric player in the digital food and wellness ecosystem.” Albertsons operates stores in 35 states and Washington, D.C.
The “hyper-local” approach that Albertsons is testing stands in sharp contrast to Kroger’s fulfillment deal with the British e-grocer Ocado, which operates massive automated warehouses to fill online orders. The two companies, which originally announced their intention to work together in May, agreed upon the service and operational terms of the deal this week. Kroger is expected to place orders for the first three warehouses before the end of this year and build to 20 over the next three years.
While the primary focus of Kroger’s Ocado deal is online order fulfillment, the grocer also intends to use it to “piece pick items” to the chain’s stores to fill in supply gaps there, as well.
- Albertsons Companies is the First National Grocer to Implement AI-Driven Micro-Fulfillment eCommerce Solution – Albertsons Companies/Globe Newswire
- Albertsons is bringing in robots to pack its online grocery orders – CNBC
- Ocado and Kroger agree service and operational terms to May deal – Reuters
- Is robotic micro-fulfillment the path to streamlined grocery pickup? – RetailWire
- Ocado to automate Kroger warehouses in exclusive U.S. deal – RetailWire
DISCUSSION QUESTIONS: What do you see as the pros and cons to the “hyper-local” approach to fulfillment being tested by Albertsons? Ultimately, do you think this approach or massive warehouses such as those operated by Ocado will be the primary way food retailers handle online order fulfillment in the U.S.?