Albertsons thinks small for e-commerce fulfillment

A major grocery conglomerate is moving ahead with automated in-store fulfillment of e-commerce orders. 

Albertsons Cos. is expanding on a pilot of “micro-fulfillment” centers supported by a hyperlocal fulfillment solution from Takeoff Technologies. Located inside an existing store, micro-fulfillment centers typically hold about 15,000 to 18,000 of the local market’s most popular products. 

The centers use robotic technology to fulfill e-commerce orders and provide real-time information about inventory. By placing a micro-fulfillment center in an existing store close to customers, Albertsons hopes to be able to carry a diverse and locally relevant selection of products.

Albertsons and Takeoff began their partnership in 2018 with the announcement of two pilot micro-fulfillment centers that would be constructed in existing grocery stores. Albertsons began operating its first pilot unit in October 2019 at a Safeway in South San Francisco. 

Another pilot unit is scheduled to begin operations at a Safeway in San Jose, Calif. before the end of 2019. Albertsons has also agreed to purchase additional micro-fulfillment centers from Takeoff and is evaluating market expansion opportunities. According to research from Takeoff Technologies, micro-fulfillment centers can increase productivity by up to 10 times through improved speed, productivity, accuracy, and efficiency; and reduce or eliminate product substitutions.

“The micro-fulfillment center model is a key element in the store of the future,” said Vivek Sankaran, Albertsons Cos. president and CEO. “It combines the efficiency of automation with the ease of meeting customers when and how they want to shop. In working with Takeoff, we can evolve how the model ties into our store and e-commerce ecosystems and accelerate our path to best serve our customers.”

Canadian grocer Loblaw Inc. is building an automated picking facility, using hyperlocal fulfillment technology from Takeoff, to support its PC Express BOPIS service. Loblaw will launch the 12,000-sq.-ft. facility inside one of its GTA Real Canadian superstores in 2020.

Albertsons Cos. operates stores across 34 states and the District of Columbia under 20 banners.