Ahold Delhaize builds micro-fulfillment center to meet online grocery demand

Grocery distributor Ahold Delhaize USA is expanding its micro-fulfillment technology through a pilot with The GIANT Company supermarket chain in the Philadelphia market, the company said Tuesday.

The project is being run by Peapod Digital Labs, which is the Massachusetts-based company’s digital, e-commerce, and commercial engine, and will use technology from system integrator Swisslog and material handling equipment provider AutoStore.

Ahold Delhaize— whose other brands include Food Lion, Hannaford, and Stop & Shop—will also continue other ongoing micro-fulfillment tests, such as a multi-shuttle pilot with TakeOff Technologies running in Stop & Shop stores in the Hartford, Connecticut, market. Additional micro-fulfillment pilots will be announced in the coming months, the company said.

The latest initiative also follows the news last month that retail giant Walmart Inc. will build local fulfillment centers (LFCs) inside many of its brick and mortar storefronts in a move to provide same-day pickup and delivery services for products from fresh and frozen groceries to consumables and electronics. That project uses technology from system integrator Dematic, robotics startup Fabric, and industrial automation startup Alert Innovation.

Likewise, Peapod says it has similar goals, defining its mission as augmenting customer-centric online and mobile technologies, driving digitization and personalization, providing e-commerce technology and infrastructure, and pioneering technologies for pick-up, next day, and same-day delivery.

In fact, shoppers who click on GIANT’s retail website are already greeted with a pop-up window asking them “How are you shopping this week?” and offering choices between in-store, pickup, or delivery. Designed to make that process more efficient, the new e-commerce fulfillment center (EFC) is planned for the Philadelphia market to help meet customer demand in Center City and South Philadelphia, and will be scaled to fulfill approximately 15,000 online orders per week for delivery to customers’ homes.

It will work by using “hive robotic technology” that runs on AutoStore’s automated storage and retrieval system (AS/RS), powered by Swisslog’s SynQ software and pick stations and Peapod’s proprietary manual picking capabilities. The company says that combination will streamline grocery e-commerce order fulfillment by pairing AutoStore’s grid storage density and goods-to-person productivity gains with Peapod’s picking system.

“Over the past year, all Ahold Delhaize USA companies have seen a tremendous increase in online sales growth, and we believe this growth is here to stay,” JJ Fleeman, president of Peapod Digital Labs and Chief E-commerce Officer, said in a release. “As we think about shifting consumer expectations and the future of omnichannel shopping, we must continue to build and evolve our already strong infrastructure to optimize pick-up and delivery. We’re excited to kick off this pilot with The GIANT Company and Swisslog as we continue to build out e-commerce fulfillment capabilities, which we believe will be key in supporting continued omnichannel growth.”