Loblaw partners with Takeoff Technologies for automated micro-fulfillment

Stewart Samuel
Program Director - Canada
@RetailAnalysis

Date : 13 November 2019

Loblaw becomes the latest retailer to partner with Takeoff Technologies to automate in-store grocery ecommerce picking.

Adding capacity to the PC Express service

Loblaw is investing in its PC Express grocery ecommerce service by building an automated picking facility within one of its stores in the Greater Toronto area. The partnership with Takeoff Technologies is expected to launch next year, bringing additional capacity to support PC Express orders in stores located close to this new picking facility. Commenting on the initiative, Sharon Lansing, vice president and general manager, grocery ecommerce at Loblaw, stated,

“This new technology complements the exceptional service of our PC Express colleagues and leverages the strength of our retail store network. By increasing the speed and accuracy of our PC Express pick-up service, we can ensure our PC Express customers have a seamless and outstanding experience every time they order. We can fill more orders, more quickly, with a near-guarantee that the products customers order online will be in stock at the store.”

Source: IGD Research

Optimising picking efficiencies

Over the last year, Takeoff Technologies has emerged as one of the leading companies in this area. It has partnered with several retailers in the US including Ahold Delhaize, Albertsons and Sedano’s Supermarkets. It has also announced a partnership with Woolworths in Australia. The company has developed a scalable model for retailers through optimising robotics and automation which can assemble orders of up to 60 grocery items in minutes. Its solution, which operates from a footprint of around 10,000 sq ft is reported to offer retailers a much lower cost-to-serve than other ecommerce platforms, including in-store picking, dark store and centralised fulfillment.

Range of fulfillment models

As the channel becomes a larger part of their businesses, scaling profitably is a major focus for grocery ecommerce retailers. In Canada, retailers are adopting different approaches. Next year, Sobeys will launch its new grocery home delivery service, Voilà by Sobeys, in partnership with Ocado. This utilises Ocado’s automated centralised fulfillment model. Metro and Walmart’s ecommerce operations use a manual in-store picking model. These approaches reflect the diversity of thinking which continues to exist with regards to the optimal solution for the channel. Given the range of different catchments that need to be served, and the volume differences in each, it is likely that a mix of models will be required by retailers.

New blueprint for the store of the future

Given the challenges of developing a profitable store-based picking model, there is likely to be growing interest in automated micro-fulfillment. It also enables retailers to repurpose excess space in their stores as we continue to see a shift towards smaller formats. New stores could also be developed combining an automated core grocery offer with an experiential fresh and prepared food hall. The model could also be used to facilitate cross-channel partnerships, enabling grocery retailers to expand the reach of their ecommerce propositions. A model which is profitable could also further accelerate the growth the channel is experiencing in Canada.

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