Dec 12, 2021When Kroger, the United States' largest grocery retailer, signed an exclusive deal in 2018 with Ocado, a provider of highly automated fulfilments centers, there were a lot of skeptics. Would the cost of all the technology ever be recouped? Would the automated delivery system, which relies on RFID, enable the company to compete with Amazon and Walmart? Was this just an expensive mistake made in desperation?
Three years on, the CEO says the automated fulfilment centers are performing better than expected, and the company now plans to expand them in the United States (see Kroger Delivery Expands with New Fulfillment Centers). The fulfilment centers use robots on a grid of aluminum tracks, which slide around autonomously to pick items based on orders placed online. RFID tags from Omni-ID identify each robot, while readers set up by CoreRFID enable an artificial intelligence system to know each robot's precise location and optimize its picking route based on each order.
The robots can pick 50 items in five minutes, far more than a human can pick. When an order is complete, it is placed in a vehicle and delivered to either a home, a cross-docking facility for transfer to a smaller delivery vehicle, or a store for pickup by the customer. The new automated system helped Kroger deliver the goods—pun intended—during the pandemic.
Online sales more than doubled in 2020, topping $10 billion, while sales of goods delivered direct to the customer reached 150 percent. The RFID tags on the robots are mounted in close proximity to the metal grid. The tags needed to be read in both ambient and refrigerated environments, and they needed to be interrogated with a high degree of accuracy. The system is apparently succeeding on both counts.
Kroger said last week that it will offer more customers its Kroger Delivery service through the addition of its Ocado-powered fulfillment centers. "Kroger Delivery is a thriving part of our dynamic ecosystem and is transforming grocery e-commerce and meeting a range of customer needs through the introduction of first-of-its-kind technology in the U.S. developed by Ocado," said Rodney McMullen, Kroger's chairman and CEO, in a press release. "Kroger's growing seamless ecosystem continues to scale, and we're committed to doubling both our digital sales and profitability rate by the end of 2023 and Kroger Delivery will help us reach this target."
Given all the supply chain issues we are witnessing, it's good to see one company that is using a variety of technologies—artificial intelligence, robotics and RFID—to improve efficiencies and boost revenue and profits.
Mark Roberti is the founder and editor of RFID Journal.
