Kroger to test autonomous grocery delivery

Kroger plans to pilot the use of unmanned road vehicles for grocery delivery this fall.

“We are incredibly excited about the potential of our innovative partnership with Nuro to bring the future of grocery delivery to customers today,” Yael Cosset, chief digital officer for Kroger, said in a news release. “As part of Restock Kroger, we have already started to redefine the grocery customer experience and expand the coverage area for our anything, anytime and anywhere offering.

“Partnering with Nuro, a leading technology company, will create customer value by providing Americans access to fast and convenient delivery at a fair price,” Cosset said.

The test with Kroger will be the debut for the hardware and software of Nuro, according to the release.

The pilot market has not yet been announced.

“Unmanned delivery will be a game-changer for local commerce, and together with Kroger, we’re thrilled to test this new delivery experience to bring grocery customers new levels of convenience and value,” Nuro co-founder Dave Ferguson said in the release. “Our safe, reliable, and affordable service, combined with Kroger’s ubiquitous brand, is a powerful first step in our mission to accelerate the benefits of robotics for everyday life.”

Perspective

Dave Marcotte, an analyst for Kantar Consulting, noted that numerous retailers have interest in automating grocery delivery due to the shortage of commercial drivers.

Marcotte said Kroger has robust and sophisticated IT and innovation departments, so it is not surprising to see the retailer explore robotic delivery of groceries.

If the company succeeded in automating delivery, it could cut down on costs to provide that service.

“Unlike Amazon, Kroger actually has to make money doing this,” Marcotte said.

Bill Bishop, chief architect of retail consulting firm Brick Meets Click, noted that existing infrastructure could make autonomous grocery delivery better suited to traditional retailers than online-first ones like Amazon.

"It might serve to benefit brick-and-mortar retailers more than pure play like Amazon because they are going to be able to leverage their presence in the market and their proximity to customers more quickly than Amazon," Bishop said, noting that Kroger has 2,800 stores while Amazon has about 450 thanks to its acquisition of Whole Foods.

As for whether the Kroger pilot will ultimately be expanded into a full program, it depends on the return on investment, Marcotte said.

He mentioned that some of the obstacles for the technology will be basic elements like weather and road conditions. Companies would also do well to consider time of day for deliveries so traffic is light. Another aspect to consider will be insurance cost.

Bishop suggested that retailers will need to figure out a balance between responding to orders in a timely manner and optimizing trips. Ideally, on each trip a vehicle could drop off multiple orders to destinations in close proximity to one another. 

Marcotte noted that regulations probably will not be a significant hurdle initially.

“You usually don’t have that issue until you’re successful,” Marcotte said.

Another aspect to keep in mind is that technology moves so quickly that companies will need to plan for regular updates to the system, Marcotte said.

If the Kroger pilot succeeds, the company could sell the solution to non-competitive retailers, he suggested.

Bishop said companies looking to adopt this kind of technology will likely have no shortage of potential partners in the near future, since numerous manufacturers are in the process of developing autonomous vehicles.

Last-mile grocery delivery by self-driving car could spread quickly throughout the industry if the technology is adopted by providers like Instacart and Shipt, Bishop suggested.

If Kroger's pilot and other efforts find success, grocery delivery could become more accessible and more common, Bishop said.