The system will use artificial intelligence-enabled technology to read grocery orders made online, collect the items, and deliver them to an Albertsons employee via a system of totes and conveyors.

Grocery chain operator Albertsons Cos. Inc. (No. 178 in the Internet Retailer 2018 Top 1000)  is working with a technology company to test an automated e-commerce fulfillment center inside an existing, so far unnamed store.

Takeoff Technologies

A rendering of Takeoff Technologies’
in-store e-commerce fulfillment system.

Albertsons has teamed up with Takeoff Technologies to test Takeoff’s in-store e-commerce fulfillment system, which will use artificial intelligence-enabled technology to read grocery orders online, collect the items, and deliver them to an Albertsons employee via a system of totes and conveyors. The employee will then prepare the order for delivery to, or pickup by, the customer. Like the store shelves, the system will be replenished with products daily.

Albertsons says it chose to work with Takeoff because its system was deemed ready for implementation and can work with Albertsons’ existing supply chain and store footprint. An Albertsons spokeswoman says the system will be up running in 2019. If the system works well, it will be used at additional Albertsons locations.

Launched in 2016, Takeoff has raised $15.4 million from investors, according to Crunchbase data. Of that, $12.5 million was raised in January.

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Albertsons operates stores across 35 states and the District of Columbia under 20 banners, including Albertsons, Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs.

Albertsons and drug store chain Rite Aid Corp. announced a planned merger in early 2018. But those plans were abandoned in August after the deal failed to win enough support from shareholders.

Albertsons has been working to expand is online and omnichannel capabilities in a number of ways. In October, the retailer launched an online marketplace selling about 40,000 food, wellness and household products. By the end of 2018, the website, Albertsons.com/Marketplace, will offer more than 100,000 products, the company says.

In January, Albertsons launched a platform called Albertsons Performance Media, “powered by” Quotient Technology Inc. The platform works with consumer brands on their digital advertising and in-store targeting efforts.

Last September, Albertsons acquired the meal-kit delivery service Plated for an undisclosed amount. In the second quarter of fiscal 2018, which ended Sept. 8, Albertsons reported that e-commerce sales, including sales of Plated meal kits, grew 113% compared with the same period a year earlier.

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Albertsons is not the only grocery seller looking to automate the fulfillment of online orders, however. Walmart Inc. (No. 3) also is testing a robotic e-commerce fulfillment system at a recently renovated store in Salem, New Hampshire.

Walmart also has proposed opening a new automated facility, called Walmart Pickup, in a Chicago suburb. The facility would allow shoppers to drive up and collect orders of online groceries.

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