Dive Brief:
- Kroger plans to install new Ocado Group technology focused on efficiency and labor productivity into a number of its automated customer fulfillment centers (CFC) currently in operation as well as future ones, according to a Monday announcement.
- The technologies slated for implementation include On-Grid Robotic Pick and Automated Frameload.
- The announcement comes during a lull in Kroger and Ocado’s partnership following Kroger’s announcement in September 2023 that it slowed its rollout of automated fulfillment centers with the British firm.
Dive Insight:
With the latest move, Kroger and Ocado are signaling that their partnership is seeking to bolster the economics of their network of e-commerce fulfillment sites, with the announcement noting that the addition of the technologies aim to “further drive down [Kroger’s] cost to serve from CFCs.”
Ocado’s On-Grid Robotic Pick is a robotic arm installed on the automated fulfillment grid that packs bags with items deposited by bots that also operate on the grid, according to the announcement. Ocado’s robotic arm technology is equipped with advanced machine vision, reinforcement learning and sensing capabilities that allow it to pick tens of thousands of products and pack them into bags with “precision and accuracy.”
Ocado has already introduced this capability to distribution networks outside of the U.S., noting that at full capacity, the On-Grid Robotic Pick can pick over 70% of an extensive online grocery range.
Meanwhile, Ocado’s Automated Frameload technology automates the physically demanding task of loading prepared customer orders onto delivery frames, eliminating the need for workers. Automated Frameload’s “computer vision examines the tote and the frame, forms an understanding of the dimensions and shape of the tote and enables alignment with the frame, making direction adjustments in real time to push the tote in,” according to the press release.
In 2018, Kroger and Ocado announced their exclusive agreement to bring the British e-grocer’s automated fulfillment capabilities to the U.S. and help the grocery company ramp up its competitive edge in the growing e-commerce market.
Kroger committed to opening 11 CFCs with Ocado by the end of 2022, but has announced the opening of eight so far with three others planned.
Last September, Kroger Chairman and CEO Rodney McMullen told investors the grocer planned to hold off on building new e-commerce sites with Ocado “until we make sure that we have a clear path on the ones we have.” The news came as grocers were grappling with fluctuating e-commerce sales on the heels of rapid growth during the early pandemic years. Nearly nine months after announcing it would pull back on the rollout of CFCs, Kroger shuttered three spoke facilities as part of its e-commerce hub-and-spoke network with Ocado.
The latest announcement about installing new technology and capabilities signals Kroger’s work with Ocado is far from done, however.
