Sponsored By

Albertsons embraces micro-fulfillment to power e-commerce

Russell Redman

September 3, 2020

6 Slides
safeway mfc gallery.png
Albertsons Cos.

To support e-commerce growth, Albertsons Cos. has expanded its partnership with automation specialist Takeoff Technologies to deploy micro-fulfillment centers (MFCs) to fill online grocery orders.

Currently, Albertsons has two Takeoff-powered MFCs at Safeway supermarkets in South San Francisco and San Jose, Calif., which went into operation in the fourth quarter of 2019.

“We have been working with Takeoff on a series of pilots in our network, and we plan to expand beyond the two that we already have launched,” said Chris Rupp, chief customer and digital officer at Albertsons Cos. “We have a series of new locations we’ll launch over 2020 and 2021 that will help us deliver more groceries, faster, to customers in some of our highly concentrated areas of business.”

The new MFCs could include stand-alone facilities, not attached to a functioning store, according to Rupp.

“Our intent is to have a freestanding facility in this bunch,” she said. “I’m considering this entire group of facilities to be a series of pilots where we try different approaches to fulfillment to find out which is the best at providing the most efficient service for customers. For example, you can set up a MFC where it’s primarily customers in the local trade area of one store, or you can also set up a hub-and-spoke model where one MFC is serving many different stores. Another approach would be to set up a dark store as a MFC. We are going to be trying all of those different approaches and potentially some others.”

Related:Retailer of the Year: A New Chapter for Albertsons

According to Albertsons, the MFCs typically occupy a footprint of 10,0000 to 15,000 square feet and, if on-site at a store, are situated adjacent to the sales floor. The facilities carry about 15,000 to 18,000 of the local market’s top-selling products and serve an area covered by the nearest five to 10 stores.

“We are continually looking at ways to become more efficient,” said Susan Morris, executive vice president and chief operations officer at Albertsons Cos. “What we do is we find a store that’s central to a group of stores that provide e-commerce services and look to create efficiencies. As an example, if I can take the backroom of a store or punch a hole through the wall and expand into a facility next door, I need about 15,000 square feet, and we can deploy a micro-fulfillment center, where you can put your highest-velocity items through an automated picking system. So instead of having our team members have to go up and down the aisles to shop — and, by the way, compete with a brick-and-mortar customer — they could do that heavy load in the backroom.”

Related:Albertsons reimagines shopping experience at marquee stores

The shift of the e-commerce load to the MFC allows store associates to focus on customer service in Albertsons’ bread-and-butter business — its fresh departments, Morris noted.

“We can take advantage of the turns that you get in fresh, which is very important,” she said. “The machine is picking your bath tissue, your towels, your soda pop, and the employee can be on the sales floor, making sure that we’re getting you that one-and-a-half-inch thick ribeye that you wanted, or that custom cake with ‘happy birthday’ written on it. So we think it’s a nice end-to-end solution.”

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

Stay up-to-date on the latest food retail news and trends
Subscribe to free eNewsletters from Supermarket News

You May Also Like