Doing E-Commerce as a Norwegian Would

As the grocery industry explores technologies to efficiently meet demand for local e-commerce fulfillment, a company out of Norway is pushing a different kind of robotic system using a proprietary cube storage similar to that used by Ocado but in a flexible footprint capable of fitting into an existing grocery store.

AutoStore systems are already operating in more than 60 U.S. sites in a variety of industries but currently just one is providing grocery microfulfillment in the U.S., Andrew Benzinger, business development director for AutoStore, told WGB in an interview. Benzinger declined to identify the retailer. AutoStore has also been selected as the engine in an automated hybrid store concept created by the retail software firm Locai and the architecture company Cuhaci & Peterson that would combine fresh grocery and a microfulfillment center.

Founded in Norway as a semiconductor distributor, AutoStore has been in robotics for 22 years after developing a cube and grid robotic storage and retrieval system to serve that business efficiently. It has since built systems for industry verticals such as machine parts and is expanding to U.S. grocery following establishment of U.S. offices in Derry, N.H., last year.

Benzinger said AutoStore differs from competitors in the grocery microfulfillment space by using a cube system operating on a three-dimensional aluminum grid structure with self-supporting crates that are moved to pick stations by independently operating robots, providing swift and accurate movement of orders. He maintains this is capable of handling more customer orders and more inventory, resulting in more orders ready to ship than other established or startup players in the space.

Ocado uses a similar cube and grid system but operates large off-site warehouses built for grocery e-commerce, including several now under construction for Kroger.

“We believe the play for grocery is a lot of small systems,” Benzinger said. “We have spent the last 10 years developing a kind of ‘Waze’ for robots, so the route which they drive on top of the track is superefficient, especially in high traffic.”

Retailers are investing in automated fulfillment to attack profit-eroding costs of shopping and shipping on behalf of customers. Transportation costs and customer demand are driving the need for fulfillment solutions physically closer to the customer, sources say.

While microfulfillment provides a more efficient solution than manually picked orders, inefficiencies remain in the system, including replenishing supply and consolidating parts of the grocery order not in automation with the automated portion of the pick. “If you have 40 SKUs in an order, and 30 are in automation and 10 in the store or a manual picking area, someone has to go walk the store just like Shipt does today and marry them up with the automated order in a consolidation area.”

That manual picking and consolidation effort is a “disaster” for profitability, Benzinger maintains. “The consolidation effort needs a conductor much like a symphony does and that’s an area that we shine with the help of our integrator partners,” he said. 

AutoStore says orders can be consolidated in less than 10 minutes and confirmed for customers to collect at any time. Orders can be retrieved from the system in just a few minutes, and customers can choose to collect prepicked orders or have them prepped for home delivery.

“AutoStore delivers the flexibility and scalability needed for streamlining automated fulfillment of online orders, which is absolutely critical to accommodate increasingly higher numbers of SKUs, and seasonal spikes in ordering,” Karl Lier, president and CEO of AutoStore, said in a release. “It gives retailers the flexibility to make more targeted decisions about where they believe automated microfulfillment will be most beneficial.”