As its first two microfulfillment centers get up and running at Safeway stores in California, Albertsons Cos. and Takeoff Technologies are forming a strategic partnership with dedicated teams to collaborate on the evolution of microfulfillment capabilities to drive the future of e-commerce order fulfillment.
Albertsons, based in Boise, Idaho, and Boston-based Takeoff inked a deal to pilot Takeoff’s microfulfillment centers in existing grocery stores in 2018. The first of those units began operating Oct. 23 at a Safeway in South San Francisco. A second is scheduled to begin in San Jose before the end of the year. Albertsons has agreed to purchase an unspecified number of additional microfulfillment center from Takeoff and is evaluating market expansion opportunities.
“The microfulfillment center model is a key element in the store of the future,” Vivek Sankaran, Albertsons president and CEO, said in a statement. “It combines the efficiency of automation with the ease of meeting customers when and how they want to shop. In working with Takeoff, we can evolve how the [microfulfillment center] ties into our store and e-commerce ecosystems and accelerate our path to best serve our customers.”
Microfulfillment centers bring together the proximity of brick-and-mortar stores with the automation capabilities of a large warehouse. Located inside an existing store, microfulfillment centers typically hold about 15,000 to 18,000 products, providing a faster and cheaper means of assembling orders for pickup or delivery.
“In collaborating with Takeoff, we’re able to leverage their thought leadership in e-commerce fulfillment with our expertise in running great grocery stores that meet customers’ everyday needs, and that’s exciting turf for us,” said Chris Rupp, EVP and chief customer and digital officer of Albertsons. “By placing an [microfulfillment center] in an existing store close to customers, we can carry a diverse and locally relevant selection of products with the friendly touch of our local team to service the customer.”
According to research by Takeoff, microfulfillment centers increase productivity by up to 10 times through improved speed, productivity, accuracy and efficiency. By providing real-time information about inventory, robotic fulfillment can also reduce product substitutions, Takeoff said.
“We are living in historic times," said Jose Aguerrevere, co-founder and CEO of Takeoff. “The grocery industry is transforming its way into the future, and the winners will be the ones getting it right first. Albertsons Cos.’ move to expand its microfulfillment capability is a clear testament of such transformation.”