To accelerate the creation of an e-commerce infrastructure, Albertsons Cos. has formed a strategic partnership with automation specialist Takeoff Technologies to open micro-fulfillment centers (MFCs) for online grocery orders.
Albertsons said Thursday that the move expands its relationship with Waltham, Mass.-based Takeoff. Last year, the companies unveiled plans to pilot Albertsons’ first MFC at a Safeway supermarket in South San Francisco. The facility began operating on Oct. 23.
Under the wider partnership, Albertsons has agreed to buy more MFCs from Takeoff as it sizes up market expansion opportunities. Another MFC pilot, part of the collaboration that Albertsons and Takeoff announced last fall, is scheduled to kick off before the year’s end at a Safeway store in San Jose, Calif.
Boise, Idaho-based Albertsons, the nation’s second-largest supermarket retailer, has stores in eight of the 10 largest U.S. metropolitan statistical areas (MSAs).
“The micro-fulfillment center model is a key element in the store of the future,” Albertsons Cos. President and CEO Vivek Sankaran said in a statement. “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 MFC ties into our store and e-commerce ecosystems and accelerate our path to best serve our customers.”
Situated inside existing stores, Takeoff’s MFCs typically run around 10,000 square feet and hold 15,000 to 18,000 of the local market’s most popular products, according to Albertsons. The retailer noted that the facilities combine the proximity of brick-and-mortar stores with the productivity of a large automated warehouse.
Compared with other fulfillment schemes for online grocery, such as a centralized model, MFCs offer a lower cost to build, faster rollout timetable and quicker time to serve, since the facilities are located near shoppers.
“In collaborating with Takeoff, we’re able to leverage their thought leadership in e-commerce fulfillment with our expertise in running great grocery stores that meet customers’ everyday needs, and that’s exciting turf for us,” commented Chris Rupp, executive vice president and chief customer and digital officer at Albertsons. “By placing an MFC in an existing store close to customers, we can carry a diverse and locally relevant selection of products with the friendly touch of our local team to service the customer.”
Takeoff said its artificial intelligence-enabled robots can assemble grocery orders of up to 60 items in less than five minutes, a fraction of the speed and cost of current manual-picking options. For the robotics technology, Takeoff has an exclusive agreement with Knapp, a global provider of automated warehouse solutions.
“We are thrilled to broaden our partnership with Albertsons Cos., a clear leader in grocery retailing and a key player shaping the future of eGroceries,” stated Max Pedro, co-founder and president of Takeoff. “With our strategic partnership, we’re confident we’ll be able to add significant value to their business and consumers as we work in partnership to define the future of e-commerce.”
The robotics can pick about 800 items per hour versus 60 items for manual in-store picking, and the system can process approximately 3,500 online grocery orders weekly week per location for a two-hour service. Takeoff noted that retailers can use its solution to leverage underutilized real estate and turn existing stores into micro distribution centers. And with real-time information about inventory, automated fulfillment can dramatically reduce or even eliminate product substitutions.
“The grocery industry is transforming its way into the future, and the winners will be the ones getting it right first,” added Takeoff co-founder and CEO José Aguerrevere. “Albertsons Cos.’ move to expand its micro-fulfillment capability is a clear testament of such transformation.”
Overall, Albertsons Cos. operates 2,262 stores in 34 states and the District of Columbia under the banners Albertsons, Safeway, Vons, Pavilions, Randalls, Tom Thumb, Carrs, Jewel-Osco, Acme, Shaw's, Star Market, United Supermarkets, Market Street, Amigos, Haggen and United Express.