(Bloomberg)—Kroger Co. and Instacart unveiled a new home-delivery service in which the companies will drop off food and household staples in as little as 30 minutes.
The offering, called Kroger Delivery Now, will reach as many as 50 million households across the U.S., the companies said in a statement Tuesday. The service will be available through Kroger’s website and app, as well as a new “Convenience Hub” on Instacart.
The new delivery option steps up Kroger’s push to expand its ecommerce footprint in groceries amid pressure from Walmart Inc. and Amazon.com Inc. Kroger CEO Rodney McMullen emphasized the importance of the new service’s “convenience and immediacy” for customers of the largest traditional U.S. supermarket chain. Kroger is No. 8 in the 2021 Digital Commerce 360 Top 1000.
“Kroger Delivery Now’s comprehensive offering of 25,000 items combines customer favorites with quick and easy doorstep delivery—whether they’re shopping for a meal, snack, last-minute ingredient, over-the-counter medication or diapers,” the companies said in the statement.
Kroger previously reached a deal with U.K. online grocer Ocado Group Plc to create automated warehouses in the U.S., designed for efficient delivery of larger orders than the convenience-focused Instacart pact. In April 2021, Kroger opened its first Ocado-powered center in Monroe, Ohio. The grocery retailer and its technology vendor currently plan to build centers in the West, Pacific Northwest and Great Lakes regions of the United States. 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.
Instacart delivers for 55 retailers listed in the 2021 Digital Commerce 360 Top 500.
Grocery delivery arms race
Kroger’s Delivery Now option is among the latest examples of how grocery retailers and other kinds of merchants are stepping up their same-day delivery services during the pandemic. To reach consumers who can’t or don’t want to drive to stores, many retailers rolled out or expanded the availability of on-demand local delivery during 2020 and the first half of 2021.
In many cases, retailers use third-party on-demand platforms like Instacart, Postmates, DoorDash and Shipt to get the job done. Such on-demand platforms primarily use mobile apps to interact with customers and gig-economy workers to make deliveries.
Retailers also are experimenting with emerging technology. For example, this week, Walmart Inc. (No. 2), the world’s largest retailer and nation’s leading grocer, said it is teaming up with Ford Motor Co. and self-driving startup Argo AI to launch a driverless delivery service in three U.S. cities.
Walmart is also testing driverless delivery with General Motors Co.’s Cruise LLC, Alphabet Inc.’s Waymo, self-driving delivery company Gatik and autonomous delivery startup Nuro, making light, purpose-built self-driving vehicles. Nuro also works with Kroger and CVS Caremark Corp. (No. 116).
With a boom in online shopping driving demand, analysts say autonomous delivery could become a $1 trillion business. According to Digital Commerce 360, 64 Top1000 retailers offered same-day delivery in 2021, up 23.1% from 52 in early 2020. Next-day delivery is far more common. 451 Top 1000 retailers offer next-day delivery in 2021, down 10.9% compared with 506 in early 2020.
Favorite