Online grocer Farmstead brings in-house delivery software to market
A San Francisco-based online grocer is making its proprietary Grocery OS on-demand delivery software available for other grocers to integrate nationwide.
Grocery OS is designed to boost the delivery capacity and profitability of any grocer-controlled pickup/delivery fulfillment operation (including public store, dark store, or delivery-only warehouse). It also enables grocers to manage their own marketing, order picking, packing and delivery operations.
Farmstead’s in-house-developed Grocery OS provides demand generation, predictive analytics, and labor and driver orchestration tools designed to help grocers attract and retain in-store customers. According to Farmstead, each existing supermarket location can unlock an additional 100-150 orders per day in capacity while offering the exact same selection and prices as stores, with free delivery to customers; while dark stores can increase capacity to 1,000-plus orders per day using GroceryOS. With custom warehouses, grocery retailers leveraging GroceryOS can support up to 10,000 orders per day tied to space and SKU selection.
Farmhouse estimates Grocery OS reduces transaction costs to the grocer by 10-15x relative to existing options. It includes local market digital demand generation, inventory control, competitive pricing intelligence, assortment curation, custom-built tech for pick/pack of online orders inside dark grocery locations, and last-mile one-hour (five-mile radius) and batched same-day delivery (50-mile radius) for low (or zero) delivery fees to customers by the grocer’s own drivers and no additional per-order fees to customers.
Other features include customer pickup support and orchestration, with cutoffs as low as 20 minutes before the customer arrives; analytics to drive increased customer baskets and CPG marketing; and strategic expansion support from Farmstead’s business and operations teams for grocers who don’t have their own pick-and-pack or last-mile delivery workforces. According to Farmstead, a top three U.S. grocer has already implemented Grocery OS, which helped them expand delivery capacity in multiple regional markets on the East Coast.
“As COVID-19 drives skyrocketing online grocery adoption, many grocers are realizing that a new way forward is required immediately,” said Pradeep Elankumaran, co-founder and CEO of Farmstead. “Existing third-party delivery options increase customers’ costs to levels approximately 20% higher than what the typical U.S. household can support each week, and increase grocers’ fulfillment costs to unsustainable levels. New robotics options increase grocers’ expenses dramatically without actually driving the additional growth required to get to profitability.”