Kroger introduces ‘Customer Fulfilment Centre accelerate eCommerce capability

US – American grocery retailer, Kroger has launched what it claims to be America’s first Customer Fulfilment Centre (CFC) in an effort to accelerate its eCommerce capability.

According to a report by FoodBev, the CFC was developed using technology developed by UK-based delivery service Ocado.

The launch is the result of Kroger and Ocado’s exclusive partnership formed in 2018 which gave the US retailer access to Ocado’s Smart Platform technology to enhance its fulfilment, picking and delivery capacity.

Apart from enhancing its ecommerce capabilities, Kroger says that its CFC would expand its customer reach and enable it to focus more on cost-effective supply chain and last-mile delivery solutions.

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Enhancing e-commerce capabilities has particularly become of utmost importance to retailers during this period of Covid-19 where online shopping is encouraged to reduce social gatherings.

According to a recent report by UNCTAD, e-commerce’s share of global retail trade rose from 14% in 2019 to about 17% in 2020 as lockdowns became the new normal, businesses and consumers increasingly “went digital”, providing and purchasing more goods and services online.

“2020 was a pivotal year for grocery ecommerce, with Kroger’s digital business scaling to over $10 billion – and achieving a record digital sales increase of 116%,” said Rodney McMullen, Kroger chairman and CEO.

“The momentum we’re experiencing is well-timed with the evolution of Kroger Delivery, underpinning the permanent shift in grocery consumer behaviour and need for enterprising and modern eCommerce and last-mile solutions – today’s true competitive horsepower.”

Located in Monroe, Ohio, the CFC measures 375,000 square-feet and is the first to open. Powered by Ocado, the centre combines vertical integration, machine learning and robotics with affordable and fast delivery service for fresh food.

The centres will feature over 1,000 robots alongside nearly 400 employees to retrieve, sort and pack items, which will then be loaded into delivery vans.

The Monroe CFC can reportedly fulfil thousands of orders per day and has the capability to support fulfilment of pickup orders too.

A CFC in Groveland, Florida is also scheduled to open to customers this spring with plans for more CFCs in Texas, Georgia, Maryland, Arizona, Wisconsin, Michigan  already underway.

As part of the partnership, Kroger announced that it planned to open 20 distribution centres in the US over the next three years.

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