Kroger has opened a customer fulfillment center in Groveland, Fla., powered by Ocado, a leader in technology for grocery e-commerce. The two have been partnering on sites over the last three years, planting facilities in Ohio, Maryland, Texas, Wisconsin, Michigan and the Pacific Northwest and West regions.
The Groveland location marks Kroger's entry into the Florida market with an e-commerce delivery service that combines vertical integration, machine learning, and robotics with affordable, friendly, and fast delivery of grocery items and fresh food.
The retailer’s store brands and fresh items stand to gain from the partnership. "We are excited to bring Kroger's exclusive brands, including Simple Truth, the country's largest natural and organic private label, and Private Selection to Florida," said Brandon McBurney, Kroger's general manager of the Groveland Customer Fulfillment Center. "Kroger Delivery provides reliably fresh food in a convenient, innovative way. Kroger Delivery will introduce Kroger to new audiences, accelerate our e-commerce capabilities, focus on outstanding customer experiences, and create hundreds of new career opportunities."
At 375,00 sq. ft., the Groveland facility carries thousands of own brand and branded grocery products and is modeled for the Kroger Delivery network, which also accesses smaller automated facilities and spoke locations. The fulfillment center can fulfill thousands of orders per day.
Kroger Delivery is a vertically integrated network, enabling coverage of up to 90 miles from the hub location in Groveland and significantly more territory when spoke locations, such as Tampa and Jacksonville, are integrated. In these highly automated customer fulfillment centers, 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 which are presented at stations for items to be sorted for delivery, a process governed by algorithms that ensures items are intelligently sorted. For example, fragile items are placed on top, bags are evenly weighted, and each order is optimized to fit into the fewest number of bags, reducing plastic use.
Once completed, orders are loaded into a temperature-controlled Kroger Delivery van, which can store up to 20 orders. Powerful machine learning algorithms dynamically optimize delivery routes, considering factors like road conditions and optimal fuel efficiency.
"Kroger is uniquely positioned to transform grocery e-commerce in Florida because of our differentiated offering that brings high-quality fresh groceries directly to our customers' doorstep. The service features fresh food, adult beverage, and personal care products, affordable prices and promotions, and a best-in-class fuel rewards loyalty program," said Bill Bennett, Kroger's vice president of e-commerce. "This innovative, customer-centric offering is delivered by our professionally trained and friendly Kroger Delivery associates, providing our customers with anything, anytime, anywhere and broadening our reach and products to new geographies."
After placing an order via Kroger.com or the Kroger app, customers in regions where a customer fulfillment center is located have groceries delivered by a knowledgeable Kroger Delivery associate in a temperature-controlled van. The associate delivers industry-leading customer service, including ensuring order freshness and satisfaction, managing order changes, and informing customers of loyalty membership benefits like earned fuel points through a partnership with Shell and digital coupon savings.
As part of Kroger's commitment to provide a differentiated and affordable grocery delivery experience for customers, Kroger Delivery will offer variable delivery fees that do not require customers to provide a tip and are influenced by a number of factors like a customer's loyalty, delivery window popularity, route optimization, and order lead time. Variable delivery fees will allow Kroger Delivery to provide additional discounted options where it has the flexibility, creating a personalized offering and delivering value to customers in ways that matter.