Grocery retailers were arguably impacted the most of any merchant category at the start of COVID-19. As consumers feared entering stores, many migrated to grocery shopping online. The Kroger Co. however, was primed and ready for a boost in online grocery shopping, thanks to its earlier work with technology vendor Ocado Group PLC in building robotic fulfillment centers.
Kroger’s goal is to build 20 “Ocado-powered” ecommerce fulfillment centers in the United States, meaning each fulfillment center will use Ocado’s robotic warehouse technology. The grocery giant already had the foundation in place for this plan, as Kroger bought a stake in Ocado in May 2018 to use the British grocer’s automated warehouse, designed to fulfill online orders for delivery to consumers’ doors. The deal was Ocado’s first in the U.S. Under the terms of the agreement, Kroger became Ocado’s exclusive U.S. partner.
Kroger continues to move ahead with plans to build automated ecommerce fulfillment centers across the 35 states it serves. It just opened its first one in late April in Monroe, Ohio. The grocery retailer and technology vendor plan to build centers in the West, Pacific Northwest and Great Lakes regions of the United States.
More online retailers are adding robotics technology to their fulfillment operations. This is especially true after the COVID-19 pandemic shuttered many stores and forced shoppers online, creating a boom in online sales—and strains in order fulfillment. Consumers worldwide spent nearly $4.29 trillion online in 2020, up from almost $3.46 trillion the prior year, according to Digital Commerce 360 estimates. That means global online sales grew 24.% year over year, an increase from 17.9% growth in 2019. (Percentage changes may not align exactly with dollar figures due to rounding.) Kroger, Amazon and other retailers are using robotics technology in their ecommerce operations to meet these growing ecommerce demands.
The global warehouse robotics market has grown alongside online sales. In 2016, it was valued at $2.28 billion and is now expected to grow at a compound annual growth rate of 11.8% between 2017 and 2022, reaching $6 billion by 2022, with the U.S. market leading the way, according to the market research report “Warehouse Robotics Market by Type–Global Forecast to 2022.”
The report by research firm Markets and Markets predicts autonomous mobile robots—those that travel along a warehouse floor to transport goods—to grow in use at the highest compound annual growth rate in the warehouse robotics market between 2018 and 2024, compared with other types of warehouse robots. And the report forecasts that the ecommerce industry will hold the largest share of the warehouse robotics market during that timeframe.
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