Woolworths will begin trialing automated “micro fulfilment centres” in its supermarkets in the next 12 months to help meet the growing demand for online shopping.
Three yet to be determined Woolworths sites will trial technology from a US startup that augments order picking with automation, essentially using robots to bring items to a human picker rather than them walking the isles.
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The supermarket giant has partnered with Boston-based egrocery startup Takeoff Technologies, which claims its technology reduces two major ecommerce pain points for grocery retailers – the cost of picking orders and last mile delivery.
Woolworths CEO Brad Banducci said customer expectations are changing rapidly with more people turning to online shopping and expecting a seamless experience.
“This partnership with Takeoff will allow us to deliver ultra convenience at a local level, with the ability to be even closer to the customer for that last mile delivery,” Banducci said.
Last week, Woolworths also broke ground on its “state of the art” $135 million distribution centre in Melbourne. The facility stores and delivers fresh produce and chilled products to retail stores.
But the stadium sized distribution centre isn’t designed to fulfil customers’ online orders. That happens at local supermarkets and has been a challenge for most Australian supermarkets in general because of the labour required to pick orders and the cost of delivery.
“We see the future of online delivery as a mix of our large scale fulfilment centres in major metropolitan areas and a localised approach that leverages the strength of our national store network,” Banducci said.
“We’re excited to see how this partnership develops, helping us accelerate our customer offering with faster order picking, while also enhancing the overall shopping experience.”
How micro fulfilment works
The US startup says it has solved the two problems by consolidating stock shelves into a much smaller footprint suitable for smaller retail locations.
The robots picking the items require much less space to access items than human pickers do. For example, no aisles are required between shelves as the robots function in compact vertical spaces.
The robots fetch items based on order requests bringing items to a human picker to complete the fulfilment process. Takeoff claims the technology brings order fulfilment times down to only a few minutes.
The smaller footprints for means the micro fulfilment centres can operate alongside or within traditional retail supermarkets in urban areas where real estate is much more expensive. Woolworths says the trial may indeed include supermarkets.
According to Takeoff, the proximity to local customers reduces the other traditional pain point: last mile delivery. A local presence makes click and collect much more viable and when orders are delivered they start much closer to the customer.