Will robotic fulfillment centers reshape Kroger’s business?
Kroger announced that it has identified Central Florida and the Mid-Atlantic states as the sites of its new online grocery customer fulfillment centers (CFC) being built and operated by Ocado.
The grocer, which has committed to building 20 of the automated warehouse facilities (AKA sheds), announced last November that it was building its first CFC in Monroe, OH, a suburb near Kroger’s home base in Cincinnati. The facilities, which tout digital and robotic capabilities, are intended to propel Kroger to the top of the online grocery food chain in the markets it serves.
Alex Tosolini, Kroger’s senior vice president of new business development, said the grocer was “developing the retail model of the future” through its partnership with Ocado. “We will co-innovate with Ocado to develop the best possible experiences for our customers, leveraging advanced robotics technology and creative solutions.”
Kroger’s deal with Ocado is just one in a number of initiatives it has taken in recent years to be more competitive with the likes of Amazon.com, Target, Walmart and others.
The grocer, which announced a test of driverless cars to deliver online orders to customers’ homes last June, continues to emphasize Kroger Restock, a strategic initiative intended to “redefine the grocery customer experience,” according to Yael Cosset, the company’s chief digital officer.
More recently, the grocer announced a 13-store pilot program with Walgreens that will include a 4,000-square-foot Kroger Express store-within-a-store. The pilot locations in Northern Kentucky each carry an assortment of 2,300 products determined on a store-by-store basis using an analysis of customer data from Kroger’s 84.51º subsidiary. The Kroger Express shops will sell fresh produce, meat, dairy, frozen and the grocer’s Simple Truth natural and organic line along with other own-brand labels.
- Kroger and Ocado Announce Two Additional Sites for High-Tech Customer Fulfillment Centers – The Kroger Co./PRNewswire
- Drugstore/grocery pilot is two-thirds Walgreens and one-third Kroger – RetailWire
- Kroger to deliver groceries using driverless cars – RetailWire
- Ocado to automate Kroger warehouses in exclusive U.S. deal – RetailWire
DISCUSSION QUESTIONS: Where do you expect to see the most immediate impact on Kroger’s business from the Ocado customer fulfillment centers? Will Kroger’s automated warehouse approach create a need for retailers using store-based fulfillment models to make adjustments?