As part of Ahold Delhaize’s repositioning of Stop & Shop, its largest banner, the Netherlands-based retailer is getting ready to debut an in-store mini fulfillment center within its recently renovated Windsor, Conn., store – one of 21 remodeled by the company in the greater Hartford market.
Described by Store Manager Tom Scott as the “little hidden crown jewel” of the chain, the 12,000-square-foot center, set to go live in January 2019, will automate and streamline the picking process by which orders are filled, leading to greater efficiencies and cost savings. According to the retailer, the facility is the first of its kind in the Northeast; a mini fulfillment center recently rolled out to service Sedano’s supermarkets in the Miami area.
The move is in alignment with Ahold Delhaize’s strategy of focusing on ecommerce solutions to offer customers greater choice in how they get their groceries, in its bid to double net consumer online sales to about US $8 billion by 2021. As CEO Frans Muller noted during the company’s Capital Markets Day in New York on Nov. 13, “Food ecommerce is in our DNA.”
Indeed, in one of the day’s presentations, JJ Fleeman, president and chief ecommerce officer of Peapod Digital Labs, an Ahold Delhaize USA entity created to drive digital and ecommerce innovation, technology and experience, laid out the retailer’s ambitious goals in this area, which include the launch of more than 600 click-and-collect locations in 2019, with more to come; building an integrated ominchannel platform for each U.S. brand; making same-day delivery or pickup options accessible to 65 percent of its customers by 2020; and accelerated ecommerce sales growth of 10 percent in 2018, 20 percent in 2019 and 30 percent in 2020.
The day also included a special trip out to the Windsor store, where Jose Vincente Aguerrevere, co-founder and CEO of Waltham, Mass.-based Takeoff Technologies, creator of the end-to-end software platform powering the fulfillment operations for the Windsor store and Sedano’s, was on hand to describe how the innovative solution will work.
Reliable and Scalable
Noting that the traditional grocery ecommerce models of having associates roam store aisles to gather products manually or a large centralized facility located far from customers were both expensive options, Aguerrevere explained that in Takeoff's reliable, scalable solution, which can be set up within a store in just a few months and includes hardware furnished by Austrian material-handling company Knapp, “[w]e take a sliver of the supermarket … in which we place an automated facility and a manual picking area.”
Employing around 20 people, the center features 15,000 SKUs representing about 90 percent of the sales done online, he added, and 4,000 orders per week can be assembled out of it.
“We’re located right in the store, so we leverage the supply chain [and] we use the same trucks that deliver the goods to the supermarket,” observed Aguerrevere, going on to reveal the solution’s central innovation: “Instead of having the picker roaming the aisles, the items come to the picker.”
Roaming the aisles, an associate picks an item every 60 seconds. With an employee stationed in front of what Aguerrevere described as “a giant vending machine,” however, “an item comes to the picker every six seconds,” with the result that “the labor productivity is six times higher,” for a “very efficient” 140 items per labor hour. Using this system, the center is able to churn out “one order every minute or so,” he noted.
What’s more, thanks to the solution’s “hyper-local fulfillment” model, pickups and deliveries can be accomplished in a mere two to four hours.
Aguerrevere was highly enthusiastic about what he called the “merging of art and science,” with “humans and robots working together to assemble orders” in a cost-effective manner. Although the mini fulfillment center is a test, with future growth plans dependent on how it performs at the Windsor store, it’s clear that Ahold Delhaize holds high hopes for the future of this cutting-edge ecommerce solution.
The company's American business, Ahold Delhaize USA, is No. 4 on Progressive Grocer's 2018 Super 50 list of the top grocers in the United States.