EINDHOVEN, The Netherlands / NEW YORK: The supermarket group Ahold Delhaize will deploy small automated warehouses to speed up order preparation and reduce delivery times as it renews its e-commerce business in response to growing competition in a fast-growing sector increase.
In an event for investors on November 13, the eighth largest food retailer in the world is scheduled to announce a partnership that will allow you to automate the picking of orders in the mini “robot supermarkets” connected to the stores of its US chains as Stop & Shop.
That marks a departure from his previous strategy of relying more on manual labor in larger warehouses, or on a mixture of man and machine, to meet food orders online.
Now, Ahold Delhaize, based in the Netherlands, is partnering with Takeoff, an emerging company that builds small warehouses that stack food on the roof to save space and use robot arms to gather orders from buyers of items like beer, milk, bread and fruit.
The warehouses serve as condensed supermarkets that can supply several stores with click and pick orders. Its construction costs around $ 3 million, which, according to Takeoff, is less than the cost of a typical store renovation.
“If it’s going well, both on their side and ours, the hope is that we can quickly build a few.”
Ahold’s measure is the latest salvo in a war for the online grocery market that has increased since Amazon took control of Whole Foods last year. Whole Foods launched same-day grocery delivery with Amazon Prime in more than 60 cities.
Other retailers are also competing to respond: Walmart will test Alert Innovation’s Alphabot automated food collection at a store in New Hampshire, and Kroger has partnered with Ocado, a British expert on online groceries.
Kroger said it will reveal the location of the first three sites in the US. UU Of Ocado’s 20 planned high-tech stores in the coming weeks. It will take approximately two years to build and each will cost Ocado approximately US $ 39 thousand (RM162.27 thousand).
Ahold Delhaize, the operator of US chains such as Giant Food, Food Lion and Hannaford, acquired the Chicago-based Peapod online supermarket in 2000, which remains the market leader.
However, growth has slowed down in Peapod since Amazon bought Whole Foods and as supermarkets, including Ahold’s own chains such as Stop & Shop, are partnering with startups such as Instacart to offer pick-up service on the sidewalk or deliveries from one to two hours.
Hand to mouth
So far, Ahold’s strategy has been largely manual. In their warehouses, known as “dark tents”, the collectors take the items from the shelves and put them in boxes for packaging and delivery.
Ahold Delhaize has decades of experience in delivering groceries to people’s homes, beginning in the Netherlands in 1986 when his Albert Heijn chain received orders by phone or fax.
At a warehouse in Albert Heijn, outside the Dutch city of Eindhoven, each collector takes an average of one product every 10 seconds, walking approximately 4.5 km per day. The algorithms solve the shortest route through the corridors and try to minimize the congestion of the car.
Pawel Kamienczuk, a 28-year-old Polish pick-me-up, sweats as he runs down a corridor, trying to reach a goal of 380 items per hour.
“At first, it took me a while to get used to it, but now I do not feel tired,” he said.
Kamienczuk uses a device like a smartphone on his wrist that tells him where to go and what he should take next.
Scan each product with a device mounted on your index finger and place it in one of the 18 blue boxes stacked in a large car.
Albert Heijn warehouses can pick up and pack 135-140 units per hour of labor, a rate lower than that of Kamienczuk because it takes into account the work done by others to unload supplies, stack shelves, assemble orders and pack delivery vans.
The figure is also lower than the 163 units that Ocado reported for the first half of 2018, but analysts say it is impressive, given that Albert Heijn’s capital outlay for its centers is a fraction of the cost of Ocado’s automated warehouses. .
Efficiency is key at a time when labor costs are rising in the United States and Europe.
The Dutch unemployment rate is at a minimum of 18 years and unemployment in the United States is approximately the lowest in five decades, wage pressures are increasing and companies are complaining more and more about the shortage of workers.
Last month, Amazon said it would raise the minimum wage for US workers to US $ 15 (RM62) per hour, in part to attract staff.
At Ahold’s Peapod warehouses in Jersey City, collectors who start with approximately US $ 12 (RM50) per hour with benefits can earn up to US $ 3.50 (RM15) per additional hour if they exceed the speed goals, but are also monitored. close by its quality: dented tin could mean a refund.
“When we buy, we have many people who check us,” said Amal, an expert “buyer” who specializes in selecting bananas, Peapod’s best-selling product.
The Peapod warehouse in New Jersey is the largest and most sophisticated of the firm in terms of automation.
There, the boxes move along conveyor belts to equipment collectors that focus on different food categories, while the robots add non-food items such as shampoo. Peapod does not share collection times.
Despite automation, Peapod employs 825 people here, working two shifts from 5 am to 2 pm and from 5 pm to 2 am in a warehouse with seven temperature zones.
Next day versus the same day
Peapod has only offered delivery the next day until now. The partnership with Takeoff will allow the group to offer same-day delivery, or click and collect, initially to customers who live near a pilot store in a Shop & Stop in Connecticut.
Avallone declined to comment on the deal’s finances with Ahold, but said Takeoff should be able to implement the concept quickly, since it takes 16 to 20 weeks to set up its 10,000-square-foot stores, which can handle up to $ 50,000 (RM208). .34mil) in annual sales.
That contrasts with the newest facility in Ocado in Britain, which is a 563,000 square foot site, with a potential annual turnover of £ 1.2bil (RM6.57bil).
The US e-commerce market for groceries UU It is still in its infancy with only 1.6% of sales, but it is expected to more than double by 2023, according to the IGD industry research group.
Ahold, which makes almost two-thirds of its sales in the United States, wants to increase e-commerce sales to € 5bil (RM23.89bil) by 2020, or about 8% of total turnover, from € 2.8bil (RM13. 38bil). in 2017
Your online sales in the US UU They should be close to US $ 1bil (RM4.16bil) by the end of the year, since it creates a shared e-commerce infrastructure for all its brands in stores, along with its online shopping site Peapod, executive director Frans Muller He said in August.