Kroger broadens its Ocado partnership with in-store fulfillment technology
Kroger Co. is expanding its partnership with British online grocery delivery company Ocado to handle in-store product fulfillment.
Cincinnati-based Kroger, the nation’s largest operator of traditional supermarkets, will use Ocado’s automation technology to select from shelves the products ordered by customers for pickup at stores.
Kroger already had a partnership it launched with Ocado in May 2018 to build 20 giant warehouse/distribution centers around the country to provide products to stores for pickup and delivery as well as for in-store sales. The first of those massive customer fulfillment centers, which Kroger frequently refers to as “sheds,” is a 335,000-square-foot building due to open in Monroe this spring. It will employ more than 400.
Kroger plans to use software and other technology from Ocado to boost in-store fulfillment of pickup orders starting in 2021 #grocery #grocer https://t.co/VCY8rWvgli
— Grocery Dive (@GroceryDive) November 24, 2020
Kroger’s expanded relationship with Ocado involves using Ocado’s proprietary software combined with Kroger’s technology to help employees assemble customers’ orders. It’s intended to make that process easier and more efficient.
Kroger aims to “build a seamless ecosystem that combines the best of the physical store experience with the digital experience," Yael Cosset, Kroger's chief technology and digital officer, said in a news release. "Ocado's in-store fulfillment capabilities, leveraging (artificial intelligence), will further contribute to continuous improvement of the customer pickup experience.”
Kroger continues to invest in technology to improve its in-store fulfillment capabilities as customers across the country continue to increase the amount of orders they place on line to pick up at stores. Kroger has pickup service available at 2,100 of its nearly 2,800 stores in 35 states. Kroger’s digital sales soared 127% in the second quarter, which ended Aug. 15, after surging 92% in the first quarter this year. Pickup orders make up a big chunk of those digital sales.
Kroger also announced its 10th Ocado customer fulfillment center will be built in its South region. It didn’t specify a location. That facility will cover 200,000 square feet.
Kroger Press Release >
Ocado Group and The Kroger Family of Companies today announced the continued expansion of their partnership, with plans to construct a new high tech customer fulfilment centre in the South region of the USA, alongside a planned roll out of Ocado's world class in-store fulfilment (ISF) software across Kroger stores, beginning in 2021.
NEW: 🇺🇸 Great news from @kroger today as we continue to expand our CFC network with a site in the South and extend our partnership to include the roll out of in-store fulfillment to Kroger stores next year! Full release available here: https://t.co/nJ5qsURYL1
— Luke Jensen (@LukeJensenOcado) November 24, 2020
The new facility will measure 200,000 square feet. The exact location and construction dates of the new facility will be announced soon.
Luke Jensen, CEO of Ocado Solutions said, “Grocery ecommerce has reached a critical trajectory in 2020. More consumers are shopping for food online than ever before, and the USA has seen a rapid, sustained expansion of the channel.”
“In the long term, we know that winning online in grocery means having the best customer service, underpinned by the best operational economics,” said Jensen. “In leveraging the wide range of Ocado fulfilment technologies, Kroger is accessing the best customer offering for online grocery in the world, proven in the UK, one of most developed and competitive markets for grocery online.”
Kroger has partnered with Ocado to help accelerate its ability to provide customers with anything, anytime, anywhere. The CFC model – incorporating state-of-the-art automation and AI – will be used to expand Kroger products to a larger footprint.
“Kroger continues to accelerate the expansion of our US network to redefine the customer experience,” said Gabriel Arreaga, Kroger's chief supply chain officer. “Our partnership with Ocado is and will continue to be rooted in our ability to deliver a value-added customer-centric solution that brings fresh food to customers through our seamless ecosystem.”
The newly named location will complement Kroger’s previously announced CFC sites in Monroe, OH, Groveland, FL, Frederick, MD, Atlanta, GA, Dallas, TX, Pleasant Prairie, WI, and Great Lakes, Pacific Northwest and West regions. Kroger plans to open the country’s first two CFC sites in Monroe, OH, a suburb of Cincinnati and Groveland, FL in early 2021.
As part of their accelerated growth plan, Kroger is also investing and innovating to optimise in-store fulfilment technology and processes. Through their expanding partnership, Kroger is also collaborating with Ocado to leverage their in-store fulfilment (ISF) capabilities with the best of Kroger’s technology and digital solutions to support the rapid growth of pickup demand across Kroger stores nationwide. Ocado’s in-store fulfilment solution includes proprietary software that supports associate efforts to assemble orders and makes it easier and more efficient for them to find products when fulfilling customer pickup orders.
“Kroger continues to accelerate the development and rollout of customer-centric technology and digital capabilities to build a seamless ecosystem that combines the best of the physical store experience with the digital experience,” said Yael Cosset, Kroger’s chief technology and digital officer. “Ocado’s in-store fulfilment capabilities, leveraging AI, will further contribute to continuous improvement of the customer pickup experience.”
