The Kroger Co. is expanding its collaboration with online grocery retailer Ocado to deploy leading-edge automated supply chain technology to a new warehouse and across its physical stores.
America’s largest grocer and Ocado are building a new “Customer Fulfillment Center” (CFC) in the South region. The new facility will measure 200,000-sq. ft., with exact location and construction dates announced soon. In September, Kroger said it would build a CFC in Romulus, Mich.
Kroger has partnered with Ocado to help accelerate its ability to provide customers with anything, anytime, anywhere through its seamless ecosystem. The CFC model, incorporating state-of-the-art automation and artificial intelligence, will be used to expand Kroger products to a larger footprint.
The new Southern site will complement the retailer's previously announced CFC sites in Romulus, Mich., Monroe, Ohio; Groveland, Fla.; Fredericksburg, Md.; Atlanta; Dallas; and Pleasant Prairie, Wis., as well as two sites planned for the Pacific Northwest and West regions. Kroger plans to open the country's first two CFC sites in Monroe, Ohio, a suburb of Cincinnati, and Groveland, Fla., in early 2021.
Kroger will also collaborate with Ocado on in-store fulfilment (ISF) capabilities, with a planned rollout across its stores beginning in 2021. Ocado's in-store fulfilment solution includes proprietary software that supports associates' efforts to assemble orders and makes it easier and more efficient for them to find products when fulfilling customer pickup orders. The grocer intends ISF to help support the rapid growth of pickup demand across its stores nationwide.
"Kroger continues to accelerate the expansion of our national network to redefine the customer experience," said Gabriel Arreaga, Kroger's chief supply chain officer. “Our partnership with Ocado is and will continue to be rooted in our ability to deliver a value-added customer-centric solution that brings fresh food to customers through our seamless ecosystem."
"Kroger continues to accelerate the development and rollout of customer-centric technology and digital capabilities to build a seamless ecosystem that combines the best of the physical store experience with the digital experience," said Yael Cosset, Kroger's chief technology and digital officer. "Ocado's in-store fulfillment capabilities, leveraging AI, will further contribute to continuous improvement of the customer pickup experience."
"In the long term, we know that winning online in grocery means having the best customer service, underpinned by the best operational economics," said Luke Jensen, CEO of Ocado Solutions. "In leveraging the wide range of Ocado fulfillment technologies, Kroger is accessing the best customer offering for online grocery in the world, proven in the U.K., one of most developed and competitive markets for grocery online."
Kroger and Ocado entered into an exclusive partnership in May 2018, in a deal that enables Kroger to leverage Ocado’s smart platform that supports online ordering, automated fulfillment and home delivery capabilities.