The Kroger Co. has opened a customer fulfillment center in Groveland, Florida, powered by Ocado Group, a technology provider for grocery e-commerce. This marks Kroger’s entry into the Florida market with an e-commerce delivery service that combines vertical integration, machine learning and robotics with delivery of grocery items and fresh food.
“The Kroger Delivery network combines the efficiency of technology with the experience of our associates to deliver fresh, affordable food and a consistent and rewarding customer experience,” said Gabriel Arreaga, Kroger’s chief supply chain officer. “We’re proud to launch Kroger Delivery in Florida, a new geography for Kroger and a milestone moment in our history to further build on our success as one of America’s leading retailers and e-commerce companies.”
“Groveland is excited to welcome Kroger to our family,” said Evelyn Wilson, mayor. “The combination of their contributions to the community, coupled with their corporate culture and values, make them an ideal partner with our charming city. I look forward to a long and prosperous relationship.”
After placing an order via Kroger.com or the Kroger app, customers in regions where a CFC is located can have groceries delivered by a 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.
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.
In May 2018, Kroger and Ocado formed an exclusive partnership to introduce to the U.S. for the first-time proprietary technology solutions focused on artificial intelligence, advanced robotics and automation and creative solutions to create efficient fulfillment and delivery capabilities.
The Groveland CFC measures 375,000 square feet, carries thousands of popular grocery products and represents one of the models engineered for the flexible Kroger Delivery network, which will also include smaller automated facilities and spoke locations. The CFC can fulfill thousands of orders per day.
The Groveland CFC and spoke in Tampa are now open, with the Jacksonville spoke scheduled to open this month. The Groveland CFC joins the Monroe, Ohio CFC which opened earlier this spring.
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 CFCs, 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. Machine learning algorithms dynamically optimize delivery routes, considering factors like road conditions and optimal fuel efficiency.
“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 CFC. “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.”
Talent on Kroger’s supply chain, technology and digital, data and analytics, human resources, operations and merchandising teams are partnering to design the Kroger Delivery network. At every CFC, on-site associates support delivery operations and help process, package and load orders.
The Groveland CFC employs nearly 400 associates, with roles focusing on customer service and engagement, engineering, operations, inventory and quality management and transportation. The spoke locations will each employ nearly 180 associates. Earlier this week, The Kroger Family of Cos. announced it is hiring for 10,000 open roles. To view available careers, visit Jobs.Kroger.com.
