Kroger continues grocery delivery expansion with Ocado
Kroger continues to bolster its delivery capabilities through its partnership with Ocado, adding a spoke facility in Louisville, Ky.
The retailer also expanded late last year in Indianapolis and North Carolina, enhancing its ability to delivery fresh foods and private brand products to consumers in the regions. Powered by Ocado, the Louisville location leverages vertical integration, machine learning, and robotics to provide an affordable, friendly, and fast fresh food delivery service.
"We're proud to expand the Kroger fulfillment network to Louisville," said Gabriel Arreaga, Kroger's senior vice president and chief supply chain officer. "The new service is an innovative addition to the expanding digital shopping experience available to Kroger customers. The network's delivery spoke facility will provide unmatched customer service and improve access to fresh food in areas eager for the variety and value offered by Kroger direct to their homes."
The 50,000-square-foot spoke facility located on Robards Lane in Louisville will collaborate with the hub in Monroe, Ohio and serve as a cross-dock to connect customers with fresh food. The facility is expected to become operational later this year and will employ up to 161 full-time associates.
Kroger and Ocado have been working together to expand grocery e-commerce since 2018. Kroger chairman and CEO Rodney McMullen said Kroger Delivery "underpins the permanent shift in grocery consumer behavior and elevates our position as one of America's leading e-commerce companies." Through the delivery network, the company now serves customers in Florida, as an example, without traditional brick-and-mortar stores.
The delivery network relies on highly automated fulfillment centers. At the "hub" sites, more than 1,000 bots whizz around giant 3D grids, orchestrated by proprietary air-traffic control systems in the unlicensed spectrum. The grid, known as The Hive, contains totes with products and ready-to-deliver customer orders.
As customers' orders near their delivery times, the bots retrieve products from The Hive and are presented at pick stations for items to be sorted for delivery, a process governed by algorithms that ensures items are intelligently packed. For example, fragile items are placed on top, bags are evenly weighted, and each order is optimized to fit into the lowest number of bags, reducing plastic use.
After being packed, groceries are loaded into a temperature-controlled delivery van, which can store up to 20 orders. Machine learning algorithms optimize delivery routes, factoring in road conditions and optimal fuel efficiency. Vans may travel up to 90 miles with orders from the hub and spoke facilities to make deliveries. Associates at the spoke facility will deliver orders within their service area, adding ZIP codes as demand grows.