Kroger announced plans Thursday to partner with driverless car company Nuro to deliver groceries using its autonomous vehicles.
“But thou, O Daniel, shut up the words, and seal the book, even to the time of the end: many shall run to and fro, and knowledge shall be increased.” Daniel 12: 4 (KJV)
EDITOR’S NOTE: Self-driving autonomous vehicles are on the verge of being perfected, and when fully operational it will cause a paradigm shift not seen since the beginning days of the 20th century. When the automobile was first introduced in the late 1890’s, it was seen as interesting novelty that would soon fade away. Then Henry Ford came along with the moving assembly line and seemingly overnight America, and then the world, was driving. Driverless vehicles are on a similar path. Once all the kinks are worked out, you will see driverless vehicles absolutely everywhere, just like in those futuristic movies. People running to and fro? Knowledge being increased? Welcome to the time that the prophet Daniel saw.
The partnership comes as the U.S.’s largest grocery players continue to tackle the expensive challenge of “last mile delivery” — the final step in getting a product to a shopper’s home. It is a feat that is particularly perilous when dealing with fragile products like fresh food. It is further complicated by populations that vary wildly across the U.S, with some far less dense that others.
Walmart recently said it was partnering with Postmates to expand its online grocery delivery program. Amazon announced early Thursday plans to partner with entrepreneurs who run their own local delivery networks of up to 40 delivery vans. It is not clear whether it will use that network for food delivery.
Kroger, meantime, has made a series of bold steps to further its online grocery and delivery business over the past few months. It announced its investment in British online grocer Ocado, which it will use to build out automated warehouses throughout the U.S. It also bought meal kit company Home Chef.
Nuro Vehicle at Proving Grounds
Watch official video of Nuro driverless car being put through testing. Nuro was founded in 2016 to harness the power of robotics and artificial intelligence to solve new challenges at a global scale. Click here to visit the Nuro website.
Earlier this month, it said that digital sales for the past quarter had grown 66 percent. “We cannot just rely on physical stores to reach all of our customers for delivery and and pick-up,” said Yael Cosset, Kroger’s chief digital officer in an interview with CNBC.
Kroger has over 2,800 stores across the U.S., under banners like Fred Meyer, Ralph’s and Harris Teeter.
Nuro, founded in 2016 by Google engineers, is an autonomous car company built explicitly for the business of transporting goods. That means its cars are slimmer and designed differently than ones meant to carry people. Nuro does not yet have special refrigerated cars, but is working on a new iteration of cars with such technology.
Nuro is focused on deliveries, specifically the kind that are low-speed, local, and last-mile: groceries, laundry, or your take-out order from Seamless. The startup thinks that automating these services could help shoulder the sharp increase in last-mile deliveries, while also reducing traffic accidents and boosting local businesses who are looking for ways to thrive and compete in the age of Amazon.
Kroger and Nuro will begin their partnership this fall. Cosset did not detail a timeline, but did say it would be “aggressive.” It will experiment with the technology in areas that both overlap with and are separate from where it plans to build out its Ocado warehouses.
“Where you have high density, an autonomous vehicle may not be the best solution,” he noted. Eventually, though “you can expect the roll out of Ocado as well as fulfillment capabilities, autonomous delivery … to be available to 100 percent of America,” said Cosset.
In its earlier days, shoppers will need to schedule windows of delivery in advance, but Dave Ferguson, Nuro’s co-founder, said he envisions a longer-term model through which shopper orders more on-demand. Nuro also plans partnerships with other retailers beyond Kroger, which it may build by sharing a cut of the revenue.
Still, with driverless-grocery delivery in its infancy, the Kroger partnership faces a number of uncertainties.
It will take time to build out the infrastructure necessary to support it at scale. Planning for expansion is difficult because demographics across the U.S. may differ in 10 or 20 years. Meantime, markets across the country vary drastically in when, what and how frequently they order their groceries.
There is also the importance of making sure someone is home to pick up the groceries once they are delivered to their house.
And there are legal questions, should the driverless cars lead to accidents. “It’s our responsibility to make sure those vehicles are safe and safely navigating the roads,” said Nuro’s Ferguson. source
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