Will Autonomous Box Trucks Deliver the Goods for Kroger?
Kroger is automating away. The grocery giant, which has built its fulfillment warehouse system on a robotic foundation, will now deploy three autonomous box trucks to transport orders from a Customer Fulfillment Center (CFC) in Dallas to local stores for delivery or pickup.
The cold chain-capable trucks have been designed to transport ambient, frozen and refrigerated products. Autonomous vehicles are expected to increase Kroger’s “speed and responsiveness” in fulfilling online orders and reduce its middle-mile supply chain costs. Trucks will make deliveries to local Kroger stores multiple times daily, seven days per week.
Mike Baker, head of final mile for Kroger, said in a recorded video for the launch announcement, “We’re implementing consistent automated delivery runs; we run roughly 18 to 20 hours a day. Anytime a customer wants an order, we’re there to try to deliver it to them. It’s super important to us that we’re repeatable, we’re on time, and we deliver that fresh full service that they’re looking for.”
Mr. Baker stressed the critical nature of making on-time deliveries and leveling up customer service. The use of autonomous trucks for middle mile deliveries, he said, speeds up the supply chain process and focuses Kroger’s attention even “more on the customer service side of things, which ultimately leads to a happier customer and repeat customer.”
“Kroger’s commitment to redefining service levels for its customers through innovative technology meant that our collaboration came together very quickly,” Gautam Narang, co-founder and CEO of the autonomous vehicle firm, Gatik, said in a statement. “We’re deeply familiar with operating our autonomous fleet within the Dallas ecosystem, and we’re very excited to bring that experience to support Kroger in its mission to reshape the future of goods delivery.”
Kroger, as Mr. Narang indicates, is not alone in its use of automated vehicles to improve middle-mile performance in the Dallas/Fort Worth market.
Sam’s Club last June said it was deploying automated box trucks to make deliveries of Georgia-Pacific paper goods to its 34 locations in the area. Six Class 6 trucks replaced the traditional Class 8 tractor-trailers used to make deliveries.
The Sam’s Club pilot project was part of parent company Walmart’s ongoing efforts to test autonomous vehicles for middle- and last-mile deliveries. The retailer has engaged with Gatik, Argo AI/Ford and Nuro on various pilots in recent years.
Gatik Announces Collaboration with America’s Grocer to Future-Proof Supply Chain with Autonomous Box Trucks - Gatik/Business Wire
Stores? Kroger don’t need no stinking stores - RetailWire
Kroger says it will transform grocery e-commerce with ‘first of its kind’ fulfillment tech - RetailWire
Driverless trucks to keep Sam’s Club in-stock around the clock - RetailWire
Walmart is making store deliveries for the first time with driverless trucks - RetailWire
Ocado to automate Kroger warehouses in exclusive U.S. deal - RetailWire
DISCUSSION QUESTIONS: How long will it be before retailers such as Kroger and Walmart scale the use of autonomous trucks to make middle-mile deliveries? What other roles do you see for autonomous vehicles in retail operations?
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16 Comments on "Will Autonomous Box Trucks Deliver the Goods for Kroger?"
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Founder, CEO & Author, HeadCount Corporation
As long as there are no major issues during these pilot projects (i.e. headline grabbing crashes), it won’t be long before we start to see autonomous vehicles rolled out broadly by the major players. The capital investments for this type of deployment are significant and no doubt the testing and certification requirements are high. But at the massive scale at which retailers like Kroger operate, automation can/will have a significant impact on operational efficiency and cost.
Chief Operating Officer, Bloo Kanoo
This is a great example of how technology can be deployed to solve business problems. Unfortunately, I think we’re still several years from a fully autonomous delivery force because it requires a large capital investment, there are real and perceived safety concerns and, maybe most importantly, there will be political and social consequences to the use of the technology to replace humans (employment).
President and CEO, Mpro5 Inc.
The technology is intriguing and this type of automation WILL happen. The business case is too strong — take out the “human element” and watch as costs go down and service levels go up. The governing factor is the technology. Just as Mark Ryski notes, it is only one headline away from disaster. Yes the technology will happen, not for a while however — with “a while” meaning about four years at least.
SVP Global Marketing, Fluent Commerce
They’ll start to scale soon. But it will be in the sweet spot of 20 to 30 mile single fixed routes, and probably first in easier locations, e.g., areas with big wide roads, more predictable/consistent weather patterns, flatter routes, etc.
Founder & Principal, PINE
I think it will be a while before this scales, it seems like needle-moving innovations take even longer in retail. Autonomous vehicles are great — I have seen live demos and they definitely work in optimal scenarios (city density, weather). I do like that Kroger is testing this out. If we continue to have a labor challenge, especially in trucking, then the case for this makes sense. However if there is a sufficient labor force, why not just use a human? How many years of fleet operations would it take to really pay the costs off?
As for other roles in retail operations, companies like Nuro are doing last-mile autonomous deliveries, Zipline is doing last-mile autonomous drone deliveries. The technology is useful but we are right on the edge of timing, vis-à-vis “is this solving a problem we have now or still a little early?”
Principal, Cathy Hotka & Associates
There’s a lot to think about here. A recent article in Wired showed that autonomous vehicles don’t recognize a stop sign that has been defaced with a bumper sticker. The technology may be promising but it’s not ready for prime time yet.
Co-founder, RSR Research
My car has adaptive cruise control which is as close to self-driving as I’ve ever been. But the car is also adamant that I keep my hands on the wheel.
I agree that I would not want to see any kind of driverless vehicles on the highways at this point, and definitely not on local roads.
Chief Amazement Officer, Shepard Presentations, LLC
This “experiment” has been going on for several years. It’s becoming a reality. Companies are testing autonomous vehicles in many industries. There is still work to do to ensure safety, but the overall technology exists and is improving at a rapid pace. Within three years we’ll be seeing this as the norm, not something new.
President, Mr. Checkout Distributors
Automation of the logistics for any business will directly impact the bottom line. Soon it will be the standard and not the exception to the rule, hopefully trickling down to the customer’s savings and not just the profit of the company.
President, The Treistman Group LLC
Automation is helping companies lower costs. At the end of the day if product and brand variety are affected in a negative way, shoppers will fees the difference and satisfaction will be diminished.
Principal, Retail Creative and Consulting Agency
It seems like the top of their sector: Kroger and Walmart are the first-movers in autonomous driving (also both in the middle from DC to smaller formats). The rest will watch and see and then more of the big retailers may adopt.
Retail Strategy - UST Global
Well as long as driverless vehicles really work safely…….what I am always surprised at is that the thought process seems to extend only to customer orders. You would think a Retailer could lower in store inventory, or at least decrease out of stocks by being able to deliver much needed items intra day on this same truck.
Founder, CEO, Black Monk Consulting
Use of autonomous vehicles will continue to scale until the problems start. As Cathy Hotka notes here, there are a lot of serious questions starting with whether or not the trucks can “see” in the same way a human driver does. If there are no major incidents, I assume the technology will continue to be refined and use will continue to increase. If there is an incident, especially a fatality, the trucks could all be off the road virtually overnight.
Vice President of Marketing, Paper Mart
I don’t expect this to be a fast adoption by other companies. Autonomous vehicles are not widely accepted and I’m sure very costly. It’s great in theory, but will take years to become mainstream. Like anything, as prices come down and skeptics are won over, only then will we see major changes.
President, Second To None
Kroger continues to innovate across several areas of the customer experience, at an impressive pace. The introduction of autonomous vehicle deliveries is a positive next step in the retail giant’s commitment to always identifying creative, industry-leading ways of improving service levels.
Retail and Customer Experience Expert
In clear weather wide roads connected by freeways, yes, I can see that happening as long as we have the driver shortages. Autonomous driving is hard when mixed with unpredictable human drivers, and as long as the environment is manageable the middle mile delivery will work.