With technology for cashierless checkout and robotic-powered order fulfillment, automated retail is changing how consumers shop for groceries and how supermarkets fill their eCommerce orders. And, as grocers are experiencing rising customer interest in high-speed in-store shopping as well as quick online purchase access, these retailers are tapping into automated solutions.
They are finding these technologies can help meet the demand for pickup and delivery orders. Shoppers, as it stands, are taking an interest in purchasing their groceries through eCommerce: According to the most recent PYMNTS Automated Retail Tracker, approximately 12 percent of consumers in the U.S. make online grocery orders for delivery or pickup.
From Kroger to Standard Cognition, supermarkets and technology solution providers alike are tapping into automation to fill grocery orders and provide self-checkout options to shoppers. These are just some of the ways that retailers and tech companies, among others, are harnessing the power of digital solutions for grocery shopping and fulfillment through automation:
Kroger intends to build 20 automated grocery order fulfillment centers in the U.S. by 2021. News surfaced in July that the supermarket company and online grocery retailer Ocado were joining forces to create the second of the 20 planned automated warehouse facilities. According to reports at the time, the two companies had broken ground on what has been dubbed America’s second “customer fulfillment center” (CFC), located in Florida. The $55 million center will measure up to 375,000 square feet and is expected to become operational in 2021. Kroger Chairman and CEO Rodney McMullen said in a press release at the time that the company is “eager to offer a new and seamless experience through the customer fulfillment center, leveraging advanced robotics technology and creative solutions to provide customers with anything, anytime, anywhere.”
The share of U.S. consumers who order groceries online for pickup or delivery is 12 percent. And grocery retailers are expanding their delivery efforts. In April, Amazon and Whole Foods Market announced that delivery of Whole Foods items through Prime Now had been brought to nine more cities. Expanded cities at the time included Asheville, Columbia, Charlottesville, Manchester, Lexington, Little Rock, Naples, Mobile and Savannah. Beyond Whole Foods, some retailers are bringing autonomous grocery delivery options to their customers. Kroger and SoftBank-backed robotics company Nuro, for instance, announced the launch of their autonomous grocery delivery service in Houston in March. The companies said in a press release at the time that the service will be available through two Houston Kroger stores, reaching customers residing in four local ZIP codes.
Standard Cognition recently raised $35 million in a Series B funding round. The San Francisco-based company taps into artificial intelligence (AI)-driven computer vision system to aid stores in having a choice for autonomous checkout. The firm currently has the programs installed in five stores in Japan and the United States. And, with the new money, it plans to expand around the globe. Beyond Standard Cognition, a second Amazon Go cashierless store has come to New York City per reports in June. The Midtown Manhattan Park Avenue space came after the online retailer opened one of the concept locations in a New York City mall. The location was the second store to offer brewed coffee and espresso drinks. Customers could tap into self-service kiosks to make mochas, lattes and Cafe Americanos per earlier reports.
The share of consumers who say shopping has become more convenient while customer experiences have worsened is 36 percent. According to one report, over half of shoppers won’t return to a retailer or a brand following a single bad experience per research from Klarna. According to a report, just under seven in 10 merchants say they need to work harder to keep shoppers. And more than a third of merchants are said to be struggling to keep up with shopper expectations in retail. Klarna Chief Commercial Officer Michael Rouse said, according to the report, “Consumers now demand more convenient and flexible ways to pay for purchases. It's also clear that retailers must better understand their customers' needs in order to build a seamless commerce experience; not only to drive sales and loyalty, but differentiate from competitors in the current retail climate.”
The return rate for online orders bought at Sweden-based omnichannel concept store The Fitting Room is 1 percent. The reason is that customers tested out the product before they placed their orders per reports from Digital Signage Today. (Return rates of 30 percent are said to be common for online shopping in Sweden.) When it comes to returns for online orders, however, some brick-and-mortar retailers are accepting unwanted products bought at eTailers in hopes of bringing in foot traffic. Kohl’s, for instance, will take “eligible” Amazon items without a label or box. While the program has only been in place for six weeks, Kohl’s Chief Executive Officer Michelle Gass said in a recent earnings call that the retailer is very encouraged by initial results. Traffic coming into its locations is meeting expectations, according to the executive’s comments in the call, and is skewing toward off-peak times.
From The Fitting Room to Kroger, omnichannel merchants are harnessing automation to help fill orders for their customers. And, while next-day shipping is not fast enough for many Generation Z consumers, buy online, pick up in-store options are helping retailers appeal to this demographic. Solutions such as collection towers can help retailers provide quick, compelling offerings to better contend with major eCommerce marketplaces and eTailers via automation.