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Kroger works to elevate omnichannel offerings

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CINCINNATI — Kroger Co. has taken another bold step toward creating a seamless online shopping experience by partnering with Nuro to provide grocery delivery with unmanned vehicles. The two companies will develop a pilot program to be tested in the fall in a market that will soon be announced.

The program will be the first application and deployment of Nuro hardware and software. The privately held company is led by experts in robotics, artificial intelligence and computer vision. Its first product, which will debut in the Kroger pilot, is a self-driving vehicle designed for local transportation of products.

Through the program, Kroger customers will be able to place orders for same-day delivery through the grocer’s ClickList ordering system or the Nuro app.

“We are incredibly excited about the potential of our innovative partnership with Nuro to bring the future of grocery delivery to customers today,” says Yael Cosset, Kroger’s chief digital officer. “As part of Restock Kroger, we have already started to redefine the grocery customer experience and expand the coverage area for our anything, anytime and anywhere offering.

“Partnering with Nuro, a leading technology company, will create customer value by providing Americans access to fast and convenient delivery at a fair price.”

The Nuro venture further builds on other recent moves by Kroger to grow its digital business, which skyrocketed 90% in 2017 and vaulted 66% during the first quarter of fiscal 2018.

In May, the nation’s largest supermarket operator unveiled an exclusive partnership with Ocado, an online supermarket based in the United Kingdom. The pact will allow Kroger to use the Ocado Smart Platform, which includes online ordering, automated fulfillment and home delivery capabilities. As part of the venture, Kroger is increasing its current investment in Ocado to somewhat more than 6%. The companies are currently working together to identify the first three sites for new, automated warehouses this year. They expect to identify up to 20 locations over the first three years of the agreement.

“We see Ocado as an innovative, exciting and transformative partnership in pursuit of our ‘Restock Kroger’ vision, to serve America through food inspiration and uplift,” says Kroger chairman and chief executive officer Rodney McMullen. “We are actively creating a seamless digital experience for our customers. Our partnership with Ocado will speed up our efforts to redefine the food and grocery customer ­experience.”

In June, Kroger acquired Chicago-based Home Chef, the nation’s largest private meal kit company, which is known for the industry-leading variety of its offerings. With three distribution centers in Chicago; Atlanta; and San Bernardino, Calif., Home Chef can deliver to 98% of all continental U.S. households within a two-day window. Operating as a subsidiary of Kroger, Home Chef will maintain its e-commerce business on while taking over responsibility for Kroger’s meal solutions portfolio, Pre+Pared, which is now available in more than 525 stores.

Reflecting the ambitious goals and rapid growth pace of Kroger’s digital business, the company recently announced that it will establish a new digital headquarters in downtown Cincinnati. This month Kroger will begin moving around 500 digital jobs to the new headquarters. The company expects its digital team to grow to more than 1,000 employees over the next three years.

While its expanding network of partnerships obviously is key to Kroger’s digital expansion, its own digital team has contributed in a major way as well.

The research and development group developed in-house the technology for a cashier-free checkout option called Scan, Bag and Go that is currently being tested. Plans call for the project to be expanded to 400 stores in 18 different Kroger divisions by the end of 2018.

Kroger’s tech team has also created an innovative digital signage system called EDGE that can be easily integrated into retail shopping environments. EDGE was awarded a Silver Apex Award earlier this year at the Digital Signage Expo.

With so much current activity and ambitious growth plans, it comes as no surprise that Kroger’s technology department last month was named to Computerworld’s “Top 100 Best Places to work in IT.”

“We are programming our company’s future through Restock Kroger, and technology and digital are at the core of the journey,” says Chris Hjelm, Kroger’s executive vice president and chief information officer.