Albertsons testing AI-supported micro-fulfillment centers

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Albertsons testing AI-supported micro-fulfillment centers

By Deena M. Amato-McCoy - 10/31/2018
A supermarket giant is using artificial intelligence, or AI, to simplify and automate online orders created at store-level.

Albertsons is partnering with Takeoff Technologies to test the value of a micro-fulfillment center supported by AI capabilities. The “hyper-local” fulfillment center, which is being piloted in an existing store, is designed to leverage Albertsons’ existing supply chain and store footprint. It also has the agility to pick various types of products.

Here’s how the concept works: As a customer enters their order using Albertsons’ existing e-commerce interface, the order will be delivered to the new automated system. Takeoff’s solution will then take over the fulfillment process. The system’s AI-enabled technology and a system of totes and conveyors will deliver the items to an Albertsons employee, who will prepare the order for the customer.

The company expects the concept to “greatly reduce” the amount of time necessary for individual customer orders to be processed. The pilot also makes Albertsons the first national grocer to implement an automated e-commerce fulfillment center, according to the company.

“Investing in e-commerce directly benefits our customers, and anything that we can do to simplify their grocery shopping experience to save valuable time is a win,” said Narayan Iyengar, senior VP digital and e-commerce at Albertsons.

“While our partnership with Takeoff Technologies will streamline e-commerce fulfillment and improve our efficiencies, we’re excited that Takeoff’s AI solution will make it even easier for customers to get their groceries how and when they want,” Iyengar said. “This is a major step in our commitment to being a customer-centric player in the digital food and wellness ecosystem.”

This is Albertsons’ latest move to bolster its e-commerce offering. Earlier this year, the supermarket giant launched Albertsons Performance Media, a digital media capability designed to improve the digital advertising performance of its CPG brand partners.

In addition, the company opened its digital marketplace — a service that enables customers to purchase items online directly from manufacturers — to outside vendors. The service gives brands national exposure, as well as access to a platform to manage sales and customer service

Albertsons also recently joined forces with driver service Instacart, a move to offer same-day delivery of online orders to customers in as little as an hour. The grocer planned to make the service available in more than 1,800 of Albertsons’ banners across the country by mid-2018.

The company was also the first national grocery retailer to acquire a prepared-meals company. The supermarket chain acquired online meal company Plated last fall.