Grocery retailer Kroger will expand its fulfillment network across Central Indiana with a 48,000ft2 facility in Indianapolis and a delivery ‘spoke’ to drive its e-commerce offerings.
Located at 9222 E 33rd Street in Indianapolis, the facility will collaborate with the company’s hub in Monroe, Ohio, to reach customers in 35 Central Indiana ZIP codes. The Indianapolis fulfillment center is expected to create up to 150 jobs and use approximately 1,000 robots. These robots move around 3D grids, orchestrated by proprietary air traffic control systems in the unlicensed spectrum. The grid, known as The Hive, contains totes with products and ready-to-deliver customer orders.
As customers’ orders approach their delivery times, the bots retrieve products from The Hive and are presented at pick stations for items to be sorted for delivery, a process governed by algorithms that ensures items are intelligently packed. For example, fragile items are placed on top, bags are evenly weighted, and each order is optimized to fit into the lowest number of bags, reducing plastic use.
After being packed, groceries are loaded into a temperature-controlled delivery van, which can store up to 20 orders. Powerful machine learning algorithms optimize delivery routes, considering factors such as road conditions and optimal fuel efficiency. Vans may travel up to 90 miles with orders from the hub and spoke sites to make deliveries. Associates at the spoke will deliver orders within their service area, adding ZIP codes as demand grows.
After placing an order via Kroger.com or the Kroger app, customers in participating areas will have their groceries delivered by a Kroger Delivery employee in a temperature-controlled van. The Kroger Delivery employee will ensure order freshness and satisfaction, manage order changes and inform customers of their loyalty membership benefits, such as earned fuel points and digital coupon savings. The delivery network will also continue to leverage stores and third-party partners to deliver certain orders.
Kroger unveiled the Monroe fulfillment center earlier this year in April, its first, followed by another in Groveland, Florida. The fulfillment network plans additional sites in California; Dallas, Texas; Forest Park, Georgia; Frederick, Maryland; Phoenix, Arizona; Pleasant Prairie, Wisconsin; Romulus, Michigan; as well as South Florida and the Northeast.
The expansion in Indianapolis represents an extension of a partnership between Kroger and Ocado. In 2018, the companies announced a collaboration to establish a delivery network that combines artificial intelligence, advanced robotics and automation. Through the delivery network, the company now serves customers in Florida, for example, without traditional brick-and-mortar stores.
Alongside the fulfillment center, the company also launched its annual membership program, Boost by Kroger Plus. For either US$59 or US$99 per year, Boost provides customers access to benefits such as free delivery and the opportunity to earn up to US$1 off per gallon of fuel twice as often. To provide affordable groceries, Kroger Delivery also offers variable delivery fees that do not require customers to provide a tip and are influenced by several factors, such as customer loyalty, delivery window popularity, route optimization and the lead time of an order.
Kroger’s chairman and CEO, Rodney McMullen, said Kroger Delivery “underpins the permanent shift in grocery consumer behavior and elevates our position as one of America’s leading e-commerce companies”.
Colleen Juergensen, president of Kroger’s central division, said, “We’re proud to welcome the Kroger fulfillment network to Indiana. The new service is a wonderful addition to the expanding digital experience available to Kroger customers. The network’s delivery spoke will provide unmatched customer service and improve access to fresh food in areas eager for the variety and value offered by Kroger.”
Bill Bennett, Kroger vice president and head of e-commerce at Kroger, said, “This fulfillment center is another example of how Kroger is transforming e-commerce in the grocery industry using a vertically integrated network to provide a reliable and consistent delivery service that repeatedly receives favorable customer feedback like a best-in-class Net Promoter Score. Our expansion in Indiana represents our commitment to delivering fresh, affordable food in both existing and new geographies. As our e-commerce business accelerates, we’re excited to continue expanding our reach and loyalty by delivering our customers an exceptional service for as little as US$6.95 powered by high-tech facilities.”
Joe Hogsett, mayor of Indianapolis, said, “We’re excited by Kroger’s commitment to continue investment in our community. This expansion not only promises more jobs for the Indianapolis economy, but also brings the benefits of cutting-edge technology to the local residents who use these inclusive delivery services.”
Brock Herr, senior vice president of business development for the Indiana economic development corporation, said, “Indiana’s pro-business ecosystem is an easy sell for companies like Kroger. We’re delighted to see Kroger continuing to grow with Indiana, working toward delivering innovative, technology-driven solutions to meet ever-evolving customer needs and producing even more opportunities for Hoosiers.”
Portia Bailey-Bernard, vice president of the Indianapolis economic development program, Develop Indy, said, “We’re excited to be part of the announcement of Kroger’s new delivery facility. This accelerates us toward our goal of a more equitable, accessible, nutritious, healthier food system for Indianapolis. Providing greater accessibility to fresh food without relying on personal transportation creates neighborhood equity in Indy through fresh, grocery delivery.”