We look at some of the latest ecommerce initiatives in the US as retailers develop alternative fulfilment models.
Store fulfillment: Ahold Delhaize’s Giant Food rolling out grocery pickup
With many of the leading US grocery retailers focusing on developing their delivery capabilities last year, store-based pickup has become a growing focus this year. This month, Ahold Delhaize’s Giant Food has started to roll-out it’s store-based pickup service, Giant Pickup. Customers using the service can choose same-day or next-day pickup. The retailer plans to roll-out the service, which is powered by its Peapod division, to 100 stores by the end of the year.
Dark store: Walmart opens dark store facility for online and pickup orders
Walmart has opened a 40,000 sq ft dark store facility in Lincolnwood, Illinois. The former Dominick’s supermarket has been converted to fulfill delivery and pickup orders. Customers can order from Walmart’s range of grocery items, consumables and health and wellness products. This is the retailer’s second dark store facility for grocery ecommerce, following the launch of a pilot 10,000 sq ft facility in Bentonville. It has also tested a dedicated pickup only point in Metairie, Louisiana and an automated pickup unit in Oklahoma City. These tests align with Walmart’s broader omnichannel strategy which aim to optimise its physical and digital capabilities.
Centralised fulfillment: Kroger and Ocado outline plans for fourth Customer Fulfillment Center
Kroger and Ocado will develop a fourth Customer Fulfillment Center (CFC) in Forest Park, Georgia. As part of the strategic relationship between the two companies, they are committed to building 20 CFCs to accelerate Kroger’s grocery ecommerce ambitions. Last month, Kroger broke ground on the first CFC in Monroe, Ohio, while plans have also been announced to build CFCs in Florida and the Mid-Atlantic region. The new facility will enable Kroger to target the online grocery market in Atlanta, a key stronghold for the retailer. It is expected to become operational in 2021 and will be located adjacent to an existing Kroger distribution centre.
Testing models to improve efficiencies and profitability
These various initiatives highlight the diversity of models being developed in the US as retailers continue to increase their investments into the channel. Alongside these more conventional models, several retailers, including Ahold Delhaize, Walmart and Albertsons, are also piloting automated hyper-local fulfillment. These systems blur the above models through automating store-based picking within the store backroom. With the channel forecast to grow to $60bn by 2023, retailers are focusing on improving the efficiency and profitability of their models, especially as most expect to scale-up their operations over the next few years.
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