To help deal with a persistent labor shortage that has severely tested their ability to keep stores staffed and stocked, grocers are stepping up efforts to mechanize a range of essential tasks that historically have been handled by people. 

This includes adding more self-checkout terminals to stores and relying on automation tools that help them update prices and manage their inventory. Many of these tools have been available to food retailers, and they're getting a closer look nowadays as the industry confronts what looks to be a long-term hiring and retention challenge.

But as retailers increase their reliance on time-tested automation solutions, they are also tackling pressing questions about the role human workers will play in supermarkets in the future, industry experts said.

Having workers perform tasks that technology can easily replace probably isn't the best use of people's time, said Gautham Vadakkepatt, director of the Center for Retail Transformation at the George Mason University School of Business. "Companies are getting smarter to that and saying given the new environment we're operating in, let's do this with automation and use our talented workforce in a context that actually adds value to the company," he said.

Automation may be able to save retailers money and speed customers through stores, but human workers play a critical role ensuring that the experience of going shopping is satisfying for shoppers, Vadakkepatt said.

"Humans have that innate tendency to be able to address problems, solve problems, and that's where we'll see humans being deployed," he said.

A balancing act for retailers

The challenges retailers are facing in hiring and retaining workers are presenting a compelling reason for grocers to embrace technology in ways they might not have in the past, said Henry Michaelson, co-founder, president and chief technology officer of Halla, which provides personalization technology to retailers.

"I think labor shortages are pushing us into the future, and the grocers are smartly using this as an opportunity for growth," said Michaelson. 

Neil Stern, CEO of West Coast supermarket chain Good Food Holdings, said retailers are facing a complex balancing act as they navigate the labor crisis confronting the industry. "We have physical stores, we have customers coming in, we have shelves that need to be stocked," he said. "I still need people to show up for work ... in an environment right now that's pretty challenging" because of the pandemic.

Good Food, which operates about 50 supermarkets under banners including Bristol Farms, Metropolitan Market and New Seasons Market, is significantly increasing its use of technology to maintain operations, Stern said. Self-checkout is a particular area of focus for the company because of its ability to help move customers along, he said.

"This is not just about an opportunity for retailers to save some labor on the front end, but it's actually what the customer is preferring as a way to check out," said Stern, noting that Good Food dedicates one worker to monitoring every four self-checkout units.

Reflecting the importance shoppers place on convenience, more than three-quarters of consumers who participated in a survey conducted in December 2021 by mobile data company Anyline said they would be more likely to shop in a store if it offered scan-and-go checkout technology. Anyline is working on technology to allow shoppers who use scan-and-go systems to buy age-restricted products such as alcohol without interacting with a store employee, said the company's co-founder and CEO, Lukas Kinigadner.

Stern said shoppers are increasingly interested in moving through stores quickly, a dynamic that in many cases is causing people to place a premium on automation when visiting Good Food's stores. That focus is especially noticeable at foodservice counters, where shoppers sometimes have to wait for service, he said, so Good Food is installing sandwich-ordering kiosks to speed things up.

"You can say, 'Isn't it wonderful, all that interaction you're going to get from us?' but I think customers are also saying, 'There's got to be a better way. If I want to get a sandwich made, I'll go use an app or use a kiosk to get it made, and I'm just picking it up,'" Stern said.

Good Food also will be testing smart carts, which use computer vision to record items as shoppers remove them from shelves, in some stores in 2022 in partnership with Veeve, according to Stern. The retailer is also planning to pilot electronic shelf tags in 2022, he said.

While electronic shelf tags can help save on labor costs because they take less work to maintain, that alone doesn't provide a substantial enough return to justify investing in them, Stern said. But when the digital price displays are used to also facilitate dynamic pricing, they become much more compelling, he said.

"That's a big use case that I think a lot of retailers are going to be looking at," he said. 

Stern said Good Food is also looking into technology like the aisle-scanning robots produced by Simbe Robotics to automate inventory tracking in its stores, but hasn't decided whether to proceed.

Wholesalers, which have had a hard time hiring and retaining workers during the pandemic, are also embracing automation in more areas, said Marco Di Marino, director in consulting firm AlixPartners' retail and grocery division. He cited, as an example, robots that can efficiently build pallets of products before getting loaded onto supply trucks.

"When robots put stuff on the pallet, they do it better," Di Marino said.

The challenging labor market is also causing retailers to look for ways to increase the efficiency of their e-commerce operations, particularly the speed with which they are able to fulfill orders, according to emailed comments from Neil Moses, CEO of Wynshop, which provides e-commerce technology to retailers.

Nearly 80% of grocers who participated in a 2021 study conducted by Wynshop and research firm Incisiv said "improving picking efficiency" topped their list of ways to improve profitability, Moses said.

Mike LaVitola, co-founder and CEO of convenience store chain Foxtrot, said he is looking to technology that handles repetitive tasks like ringing up orders to enhance his company's ability to provide products that help it stand out with customers. Foxtrot is investing heavily in technology, an effort that includes testing computer vision-based frictionless checkout technology in multiple stores, as it works to enhance capabilities like inventory management and personalization.

LaVitola said he wants Foxtrot's staff to be able to focus as much as possible on curating its selection of products, which includes a broad array of locally sourced and private label goods.

"If you think about our [stores], everything on that shelf has been tested and argued over … and so that means that all those products have a story behind them," LaVitola said. "That's really what we want the teams in our store focused on."

Recognizing the limits of technology

While the convergence of swiftly rising labor costs and rapid advances in fields like artificial intelligence and computer vision has created conditions ripe for retailers to embrace innovation, it is also raising questions about the level of automation that makes sense for grocers, said Saibal Ray, academic director of the Bensadoun School of Retail Management at Canada's McGill University.

"From an economics viewpoint, more and more automation in some way is going to make more and more sense," because technology is becoming less expensive at the same time that retailers are having to offer higher pay to attract and retain workers, said Ray.

At the same time, systems like self-checkout kiosks, smartphone-based ordering facilities and technology that records people's purchases automatically can introduce obstacles that frustrate shoppers by adding friction to the shopping experience even as retailers seek to remove it, Ray said.

For example, requiring people to download an app or set up an account to make purchases can make shopping less convenient, potentially turning shoppers away, he noted. Meanwhile, self-checkout systems may provide benefits to retailers, but they can also turn off shoppers asked to do work store employees used to handle, Ray added.

"The consumer is doing the job for self-checkout and [asking], 'Am I getting any benefit out of it? Am I getting a cost reduction or not?'" he said.

LaVitola agreed that going too far down the tech route can disrupt the retail experience for consumers.

"What we want to be really careful of is not just jamming a whole bunch of technology in … but to really have it fade away in the background to create a better experience for both our employees and for customers," he said.

Beyond helping retailers manage their operations with fewer workers, technology can serve as a draw for prospective employees by adding a dose of excitement to retail jobs, said David Gottlieb, chief revenue officer of Trax, a computer vision company that serves retailers.

"There's definitely an opportunity as you think about these next-generation technologies to provide benefit not only to the store as a whole because you're driving down costs and driving up availability, but also to the associate and to their appetite to stay with the job, because now you're giving them a cool piece of technology" to work with, Gottlieb said.

When the sudden onset of the pandemic forced food retailers to confront a deluge of demand for online grocery services, mechanized systems that could supercharge stores’ ability to pick and fill orders seemed like an obvious solution.

Several years later, however, automated micro-fulfillment centers (MFCs) remain a rarity in the grocery space, with retailers still heavily reliant on human workers to manually gather products for digital customers. Meanwhile, retailers have adopted systems that help those employees assemble orders more efficiently, posing a challenge to MFC vendors as they look to demonstrate why their equipment is worth the substantial amounts of money needed to install and maintain it, according to retail and supply chain industry experts.

In addition, retailers have recently been focusing on core issues like managing inflation and keeping their shelves stocked in the face of supply chain constraints, taking their attention away from technologies that might not be central to those efforts. At the same time, while online grocery sales remain elevated compared with pre-pandemic levels, shopper interest in e-commerce is not increasing at the explosive rate it was earlier in the public health crisis.

“They’ve invested in their in-store operations and their in-store picking … and so what they’ve done is raise the threshold or barrier that the micro-fulfillment center needs to jump to demonstrate its ROI,” said Barry Clogan, chief product officer of Wynshop, which provides e-commerce platforms to retailers.

A largely untapped market for micro-fulfillment technology

In an illustration of how slowly MFC technology is showing up in the grocery industry, Takeoff Technologies, which is working on MFC projects with retailers including Albertsons and Wakefern Food, has so far installed just 22 systems, said Mitchell Freeman, the company’s chief financial officer and chief strategy officer. Takeoff has about 100 more MFCs in the development pipeline, even though the company believes there is a potential global market for at least 15,000 MFCs, Freeman added.

“We know that we’re only in the early innings of this industry,” Freeman said. “There's a lot of hard work and a lot of energy that still needs to be spent on building the right portfolio solutions.”

Freeman said MFCs have the potential to help grocers reduce costs for shoppers without losing money on e-commerce.

“The desire to buy online has not changed. What has changed over the last six months is [shoppers’] demand for a much more competitive price when they do buy online, and we're seeing commentary in our commercial conversations that suggests that the grocers are seeing this, and that they need micro-fulfillment now more than ever,” Freeman said.

A key factor for MFC vendors is that food retailers have historically been slow to integrate technology into their operations — a dynamic that remains in place today even though e-commerce represents a much larger share of the grocery market than it did before the pandemic, said Tom Furphy, a former Amazon Fresh and Wegmans executive who is now CEO and managing director of Seattle-based venture capital firm Consumer Equity Partners. Furphy is also CEO of Replenium, a supplier of automated replenishment technology.

“I think the ROI is still there if the volumes are there,” Furphy said. “I just think we haven’t had the urgency in the immediate term.”

Even as the grocery industry has found ways to manage e-commerce demand manually, retailers have yet to find ways to turn their online grocery operations into consistently profitable ventures, Furphy pointed out. That could drive demand for MFCs down the road, particularly if retailers continue to find it hard to turn a profit on e-commerce despite launching innovations like membership programs to pass on some of their fulfillment costs to grocery shoppers, he said.

‘The payback is not obvious’

A central question retailers need to address is how long it will take them to make back the cost of putting in an MFC — a figure that is directly related to the number of orders they process in a given period of time, said Marc Wulfraat, founder and president of MWPVL International, a supply chain consultancy based in Montreal.

A typical MFC can pick between 350 and 500 items per hour and takes from 7 to 10 seconds to gather each product, according to figures from MWPVL. By contrast, human workers in a store generally take about 75 seconds to pick a single item, Wulfraat said, noting that multiple items of the same kind, such as two cartons of eggs, are counted as one unit.

MFCs start providing a financial return after handling about one million orders, but getting to that point can take years, given that grocers venturing into automation typically start at about 5,000 orders per week, or 250,000 per year, Wulfraat said. By comparison, the sprawling robotic fulfillment centers Kroger is rolling out across the United States in partnership with U.K.-based automation company Ocado can handle 250,000 orders in a single week, according to MWPVL.

“If you're the owner of a grocery business and you're considering automation in the micro-fulfillment context, the payback is not obvious,” Wulfraat said. “It’s not as though it says, ‘Hey, in a year and a half, you'll be done and the cash is going to start flowing in.’”

Wulfraat said retailers he works with are taking a cautious approach to determine whether investing in micro-fulfillment technology is worthwhile, in part because they are waiting to see how the various solutions on the market develop. “They’re very interested in the technology [but] they want to understand who’s making what moves, what vendor solutions seem to be pulling together in the horse race. So they’re not quite ready to push the button and take a chance,” he said.

Rising labor costs and hiring challenges stemming from the tight job market, however, are shining a spotlight on technology that can accomplish tasks without human involvement, potentially changing the calculus for retailers unsure about whether to invest in MFCs, according to Wulfraat.

In addition, the number of working-age people will decline as the population ages during the coming years, Wulfraat added. In a reflection of the connection between automation and demographics, the companies that build the systems at the heart of MFCs are centered in Europe and Asia, where the average person is older than in the U.S., Wulfraat said.

“Finding someone to go and pick ... orders in your store isn't as easy as it used to be,” said Wulfraat. “There has to be a way to do it better, because this isn't going away.”

Looking for a balance of cost and utility

Factors like geography, customer preferences and promised fulfillment speeds all play a role in determining how and if automation could benefit a retailer’s e-commerce operations, Wulfraat said. In a reflection of this, he noted that even as Kroger focuses on large-scale facilities as the foundation of its automated fulfillment network, the grocer is using micro-fulfillment technology to serve the Miami area.

Wulfraat said he thinks mid-size automated e-commerce fulfillment systems designed to serve an entire metropolitan area, like the facility The Giant Company debuted in late 2021 in Philadelphia using technology from AutoStore, could turn out to be a “sweet spot” by offering retailers an optimal balance of cost and utility.

“Not only is this a way to handle online orders for existing customers, it's a way to grow sales,” Wulfraat said. “So to my mind this is the poster child of what MFC will likely become.”

Instacart has partnered with MFC vendor Fabric to offer a solution for grocers that see a need for MFC technology but don’t want to invest the resources or time to develop automated fulfillment facilities on their own. But the companies have yet to announce a customer for their service more than a year after agreeing to work together.

In an emailed statement in response to questions about the Fabric tie-up, an Instacart spokesperson said the company works “to help retailers devise and implement new fulfillment models” through Carrot Warehouses, a suite of services for grocers it rolled out in 2022, but did not provide details about the partnership.

“As part of Carrot Warehouses, we work with retailers to build a model that’s tailored to their specific needs. Some will choose to leverage automation – and Fabric is one example of a technology provider that they can leverage,” the spokesperson said.

The spokesperson added that Instacart offers “faster, more accurate delivery” using what the company refers to as “nano-fulfillment” centers, but did not identify the source of the technology Instacart uses to provide that service.

Wulfraat said he thinks Instacart is likely to see interest in automated fulfillment services from retailers in large markets where order volume puts pressure on its in-store picking model.

“If it’s not a problem, why would I want to pay that extra fee for the automation? [But] if I've got 40 to 50 people in my store at the same time picking online orders and my extra customer sales are dropping because of it, I'm not going to be too happy” and might be inclined to look at automation, said Wulfraat.

Kroger e-commerce partner Ocado announced in January 2022 plans to roll out fulfillment robots that are five times lighter than its current model and an on-grid robotic arm that will further automate the picking and packing process.

Ocado also unveiled updates to its order routing operations that will allow shoppers to get a wide assortment of products delivered faster, executives said.

Kroger CEO Rodney McMullen said in prepared remarks during a media event hosted by Ocado that his company and Ocado are currently looking at ways these innovations might roll out across its online fulfillment system.

Kroger has only just begun opening automated e-commerce warehouses, but its facilities and rollout plans could be getting an update soon, judging from those innovations unveiled by technology partner Ocado.

In a presentation from Ocado’s home city of London, executives laid out several new technology updates to its Ocado Smart Platform aimed at lowering costs and getting more same-day orders out to shoppers. All of the updates will be going live in 2022 and be able to fully integrate into partner companies' fulfillment centers by the end of 2023, said Tim Steiner, CEO of Ocado Group.

The company’s newest fulfillment robot is an “ultralight” model that requires significantly less power to run, Steiner said. The bots, which are in pre-production mode and have more than half of their parts 3D printed, can run in a wider range of facilities than Ocado's previous models, including micro-fulfillment centers.

With the lighter bots come lighter fulfillment grids that the company says it can build in more types of buildings in a matter of weeks instead of the months Ocado's current systems take to install. 

“As we remove significant amounts of material from our sites, we will be able to install the Ocado Smart Platform in a wide range of existing buildings, slashing the timelines and costs associated with the construction of purpose-built facilities,” Steiner said.

Ocado is also rolling out a picking and packing robot that will sit atop its fulfillment grids, allowing the company to shuffle around products and assemble orders in the same space. The move will save square footage and reduce labor costs inside fulfillment centers, said Steiner, by cutting down on the number of manned picking stations it needs. The bots, which could eventually help pick as much as 80% of available goods using machine vision and advanced sensing, will assemble orders during business hours and, to ensure they’re staying busy, organize assortment during off-hours, Steiner said.

In a similar vein, Ocado has also developed a process that automates the loading of order totes onto delivery frames for dispatch, thus turning over a “physically demanding” step to Ocado’s robots, said James Matthews, CEO of Ocado Technology.

Steiner said the company's new robots will help reduce long-term labor costs by 40% over the long term. That could be significant for Kroger, which has faced questions from Wall Street analysts over the high cost of its network buildout. The grocer is currently operating automated warehouses in Florida and Ohio, and has more than a dozen additional customer fulfillment centers announced in markets across the country.  

Advanced robotics and efficiency measures, powered by loads of proprietary technology, have been Ocado’s calling card for years. But the company is facing growing pressure from quick-commerce firms and traditional grocers to increase its focus on same-day and on-demand orders. Ocado has been testing out a "Zoom" service powered by automated micro-fulfillment centers (MFCs) in London and plans to build an MFC in South Florida, though it remains committed to its vision of centralized fulfillment of a large assortment of products.

With this in mind, Ocado is introducing routing updates that will provide fast service from its range of facilities. This includes a “Swift Router” system that will pack orders needing more immediate delivery in the same vans that contain its deliveries with longer lead times, then prioritize drop-offs accordingly. Executives said this approach leverages the efficiency and wide product range of Ocado’s facilities for on-demand orders.

The update also includes a distribution framework that will maximize the assortment its smaller facilities can deliver. Under its “Ocado Orbit” system, small facilities will hold a limited number of SKUs but be collectively part of a “virtual distribution center” that combines items from multiple facilities and offers shoppers around 12,000 products. Trucks will circulate between the facilities, loading and unloading products as determined by the company’s artificial intelligence systems.

“Ocado Orbit enables smaller fulfilment centres, closer to the customer, to be able to offer a large range, short lead times, and value simultaneously,” the company noted in a statement.

Steiner spoke about the “trade-offs” consumers and retailers have to make in grocery e-commerce between speed and cost, size and efficiency, and other areas. The company’s new innovations, he said, are aimed at eliminating trade-offs — a bold claim that will be tested in the years ahead as digital shopping continues to evolve.

The Giant Company's e-commerce brand, Giant Direct, has gotten off to a strong start in the Philadelphia area since launching nearly three years ago. So strong, in fact, that it’s struggled to keep up with demand.

“We’ve been over capacity in the Philadelphia region,” said Nicholas Bertram, president of The Giant Company.

Giant Direct has a dedicated e-commerce hub in nearby Lancaster, Pennsylvania. It also has four small fulfillment sites, or “warerooms,” attached to stores in the suburban neighborhoods around Philadelphia. But those buildings aren’t proving very efficient at meeting delivery demand inside the city’s urban core, where The Giant Company only operates a few stores.

Help is on the way. In early November 2021, The Giant Company opened an automated e-commerce fulfillment center (EFC) aimed at catapulting the Giant Direct brand in Philadelphia. The 124,000-square-foot facility, located next to the airport just south of the city center, will stock a supermarket’s worth of products, from rotisserie chickens to frozen meals, and provide delivery to the city proper as well as its four surrounding counties. The Giant Company expects the EFC to fulfill up to 15,000 delivery orders each week.

Starting Nov. 16, 2022, the facility will also help the Carlisle, Pennsylvania-based grocer reach into parts of southern New Jersey, where it doesn’t yet operate any stores — providing a crucial test of the brand’s reach. 

As grocers look for ways to establish their own online brands in order to deepen shopper loyalty and improve the economics of online ordering, Giant's EFC marks a significant step toward e-commerce autonomy. It will be closely watched by parent company Ahold Delhaize as it looks for ways to automate order fulfillment across its various supermarket brands in the U.S. and in Europe.

"We're actually putting ourselves in a position to capture or grow that customer awareness and really build from that," said Darren Russ, The Giant Company's director of e-commerce operations. "We are coming in, in my opinion, from a point of strength."

Reaching new markets in and around Philadelphia

Giant Direct's Philadelphia EFC features two large automated fulfillment systems, one for ambient products like cans of soup and bottles of shampoo, and another for chilled items. Workers load inbound products into the system in bulk, and then as e-commerce orders come in, a hive of robots scurry along the grid-like platform picking items to send to workers for bagging. 

In between the two grids is a manual-picking space where workers gather items that can’t go into the robotics system and combine those with items picked from the grids before loading orders onto Giant Direct trucks for delivery.

The facility, which was engineered by robotics company Swisslog, can handle order volumes that are five to 10 times what its supermarkets can, said Chris Lewis, president of supply chain for Ahold Delhaize USA. It also brings down the cost of picking and packing each order.

“It doesn't change our last-mile costs, but it does change the order fulfillment costs,” said Lewis.

The EFC also serves as a cross-dock facility for Giant Heirloom Market, the company's urban specialty format, with workers transferring items from large distribution trucks into smaller trucks that can better navigate city streets.

Although the facility is built to fuel the Giant Direct brand, it also fills third-party orders and has a dedicated space where drivers from Instacart and other companies can gather those orders. This reflects a complex reality for The Giant Company and other grocers: Even as they look to establish their own e-commerce brands, they still want to tap into the deep well of shoppers using marketplace apps.

“I'm very much pro Giant Direct,” said Bertram. “Having said that … we need to be on that marketplace platform as well.”

In addition to supplementing its delivery service in Philadelphia’s suburbs, the facility will help The Giant Company reach new neighborhoods in the city proper. Although the grocer has numerous stores positioned in surrounding Bucks, Chester, Montgomery and Delaware counties, it only has five stores currently in the city proper, with plans to add a sixth later in November 2021 and grow to 10 locations by 2023.

At the same time, Giant Direct will also venture across the Delaware River and fill orders in the New Jersey towns of Camden, Cherry Hill, Gibbsboro, Haddonfield, Marlton, Medford, Mount Laurel, and Voorhees, where it doesn’t operate any stores. Additional towns in the area will begin offering the service over the next several months, the company said in the November 2021 announcement.

The Giant Company isn’t the first grocer to use e-commerce to expand its reach into new geographies. Close competitor Kroger now offers its delivery service in Florida and will eventually offer it in the Northeast — two regions where it doesn’t have any stores on the ground. But Russ said the jaunt over to New Jersey will keep Giant Direct in familiar territory.

“Recognition of our brand is very high in Greater Philadelphia and Southern New Jersey,” he said. “Those customers have been hearing our marketing messages for years and seen how we’ve built our brand."

The facility can expand delivery to markets even further afield, said Lewis, and add new services, as well, depending on its performance. Bertram said the Giant Direct EFC has space left intentionally vacant to meet opportunities that might emerge in the coming months. He said he’s interested in getting deeper into catering, offering ghost kitchens and expanding the company’s B2B delivery arm.

“There are ideas that I think at some point we'll explore with this facility that can enable even more extension of the Giant Direct brand to customers," Bertram said.

A test case for Ahold Delhaize

As the EFC’s robot-powered array revs up and begins filling orders, The Giant Company's parent, Ahold Delhaize, will keep a watchful eye on it. 

The Netherlands-based grocery company, which likes to use its various banners as test labs for innovations that could scale companywide, has dabbled in robotic e-commerce fulfillment and is looking to crack the code on making these facilities profitable, said Lewis. 

The Giant Company's sister chain Stop & Shop has been testing an automated micro-fulfillment center (MFC) engineered by Takeoff Technologies that’s attached to a store in Windsor, Connecticut. Lewis said the machinery and software perform well but still need refining to get products accurately and efficiently into customers’ order bags. 

He said the refinements are happening across multiple facets of the system, and said the companies are trying to determine how to boost the number of times the system can run in a 24-hour period, thus maximizing the investment.

“We’re still trying to figure out what a scalable micro-fulfillment solution could be,” Lewis said.

He said The Giant Company and Ahold Delhaize chose Swisslog and its AutoStore solution for the Philadelphia EFC because of its flexibility, both in terms of the system’s construction and cost structure, and because of the large number of items it can put through automation. He compared the system to an erector set and said it can adjust to fit a variety of spaces, including store backrooms.

The system also promises to improve the quality and accuracy of orders, with the ability to track product levels and fulfillment times much better than store-based picking and packing.

“If we can perfect a model, and if this model is the one or we continue to adjust it, we think there's a lot of application in other brands in the company and in multiple stores,” Lewis said.

Experts have noted that automated MFC technology, which has been closely watched by retailers and heavily promoted by companies like Takeoff, AutoStore and Fabric as e-commerce sales have risen, hasn’t yet lived up to its hype. But Lewis said it's “still early days” for the technology, which promises to bring rapid, efficient fulfillment to store backrooms and other small sites that sit close to consumers’ homes. 

Lewis said he sees a lot of changes ahead for MFC technology over the next five years that will improve performance and bring down costs. Giant Direct's Philadelphia EFC, meanwhile, should be able to expand its addressable market as it brings down fulfillment costs, he said. 

Figuring out how to move e-commerce fulfillment beyond overtaxed store is becoming an increasingly urgent matter for Ahold Delhaize and grocers across the U.S., Lewis said.

“I'm sitting in Maine, which is Hannaford territory. And they have a lot of stores that are very successful at picking from stores, and they're getting almost to their max,” he said. “So we’re hoping we can find a solution like this where there's a lot of applications for it across our footprint.”

After four years spent aiming its cashierless stores at densely populated urban markets, Amazon Go wants to see if it can woo the commuters and on-the-go families of suburbia.

In April 2022, the brand known for pioneering Just Walk Out technology opened its first suburban store in Mill Creek, Washington, about 25 miles north of Seattle. At the time of its opening, the store is the largest one in the fleet at 6,150 square feet, with the sales floor taking up roughly 3,250 square feet. And it features a wider range of items, including more multi-serve packs of snacks and groceries than traditional Go stores, as well as fresh and made-to-order foods like sandwiches, salads and avocado toasts.

As with other Go locations, visitors can scan into the Just Walk Out system using a QR code, credit card or by identifying themselves with the Amazon One palm-reading system.

The store incorporates some convenience store standbys along with some of the latest service stations that are popping up in c-stores across the country. There's a cold brew tap and two kombucha taps, made-to-order Starbucks coffee and espresso machines, an Icee dispenser, a Pinkberry frozen yogurt station and grab-and-go cases filled with everything from take-and-bake pizza to locally made donuts.

The crown jewel of the store is the made-to-order meal counter — a first for Amazon Go — where shoppers can order around 30 different items like sandwiches, salads, egg bowls and wraps using digital kiosks. 

Unlike the short-lived offshoot Amazon Go Grocery, the newest Go store doesn’t carry a separate brand name. This comes as Amazon hones its brick-and-mortar stores, casting off the underwhelming 4-Star, Books and Pop Up locations and consolidating around its Go, Fresh, Whole Foods Market and brand new Amazon Style locations.

The newest Amazon Go also doesn’t offer e-commerce, which might seem surprising given its expanded assortment and suburban setting — not to mention Amazon’s prowess in the channel. But other companies have so far struggled to make money off the small orders and speedy delivery that have come to define convenience delivery.

According to Ayesha Harper, managing director of Amazon Convenience, Amazon Go may have new suburban digs, but it’s still focused on a quick, compelling in-store experience.

“We really still focus on people who are in a rush, time-starved and really want to be on their way. They're not spending a lot of time in our stores,” she said.

Amazon plans to open another suburban Go in the Los Angeles area later in 2022. It's also continuing to open urban Go locations. In November 2021, Amazon opened a store with Starbucks that features Just Walk Out technology.

Here’s a look inside Amazon Go’s new suburban format.

Let's Eat

Other Amazon Go stores have offered a large assortment of fresh prepared foods. But the Mill Creek location is the first one that has a made-to-order meal counter. 

Harper said the more than two dozen selections, which span all three meal occasions, are unique to Amazon Go and were developed over time by the company’s in-house culinary team. Shoppers input their order, adding customized ingredients and instructions if they wish. The kitchen staff then takes a few minutes to prepare the order, and the Just Walk Out system adds the item to shoppers’ virtual tab once the employee hands it to them, Harper said. 

“We started with a much broader range of items and landed on what we think is a really great, delicious range,” she said.

For a limited time, the store is offering avocado toast and breakfast sandwiches for $3, and all sandwiches and wraps for $6. Shoppers can bundle in a fountain soda and chips for an extra $2.49.

Numerous drinks (and fro-yo) on tap

In all of its other locations, Amazon Go offers coffee that’s brewed by store staff and available in commercial carafes. The Mill Creek store is the first one to offer self-serve made-to-order machines pouring 10 different Starbucks coffee drinks, including hot and cold options.

Located next to the coffee machines are tap handles that dispense Health-Ade kombucha and one handle that dispenses cold brew from local maker Rise.

In true c-store style, the store has fountain soft drinks and an Icee machine. It also has a Pinkberry self-serve frozen yogurt machine that offers two flavors and custom toppings.

The customer service counter

Another first at the Mill Creek Amazon Go is a customer service desk where shoppers can return Amazon packages, buy gift cards and ask questions. It’s also where customers have their IDs checked before entering the adjacent alcohol department.

“They can return a package, get a meal or grab a drink and just be on their way,” said Harper.

A larger alcohol and prepared foods assortment

A larger footprint means more of just about everything, including booze. The latest Amazon Go store offers six packs as well as twelve packs of beer, and numerous wine selections, including locally sourced options, for under $20. This includes Amazon’s own wine brand, Cursive. 

Prepared foods include Amazon Kitchen brand soups and heat-and-eat pizzas, pastries from local bakeries and fresh sushi that’s delivered to the store daily. 

Getting charged up

The store parking lot features two Volta Standard Level 2 charging stations that are free to use. For shoppers that need a different kind of fuel, there’s a rack along the side of the store filled with Blue Rhino propane tanks. 

Retail automation startup Tortoise unveiled in early 2022 mobile "smart stores" based on remotely controlled containers that allow people to purchase food and other products without interacting with a human worker.

Tortoise is working with more than a dozen partners including Choice Market in Colorado and Chicago-area chain Go Grocer, to launch the unattended self-service units, which each stock a single SKU and allow people to tap a phone or credit card to pay for items.

The company says its new concept can help retailers bring in significantly greater revenue than they could generate with traditional vending machines.

Tortoise is positioning its mobile smart stores as a way for retailers to drive sales by making selected items available in situations where they might otherwise not be accessible to customers, Dmitry Shevelenko, Tortoise's president and co-founder, said in an interview.

Tortoise said early results have found their mobile smart stores can bring in $80 to $100 per hour in sales.

Along with the sales incentive, Tortoise sees the units as a flexible way to meet customers where they are already. The units can move between locations during the day and be used to sell items in front of a retail location after hours, inside a store or at stadiums and other venues, he noted. Customers do not need an account or app to purchase an item.

The concept is a change in course for Tortoise, which had been focused on using its robotic carts to deliver groceries to consumers and ferry them between retail facilities, but then concluded offering a store on wheels is a better use of its technology, Shevelenko said. The company, which previously partnered with retailers including Safeway and Choice Market to test its electric delivery vehicle, found that people would often approach the containers with the expectation that they could buy something — a pattern that convinced it to pivot to the store-on-wheels idea.

"We saw the same thing happen in all of our deployments, which was whenever the robot was parked at a store or was parked at a corner, people would walk up to it and start talking to it and expect to be able to interact with it. So we took that insight to heart," said Shevelenko.

Tortoise is working with a variety of retailers to launch the mobile smart store concept. In addition to Choice Market and Go Grocer, initial users also include Edith's, a New York City retailer that specializes in Jewish comfort food; London-based digital grocer Jiffy; and Opie Stores, which opened a drive-thru grocery store in South Carolina in fall 2021.

To provide unattended vending capabilities, Tortoise is using the same propulsion system and secured storage units it previously developed for its delivery robots. To interact with shoppers, the company added tap-to-pay readers to the boxes to simultaneously unlock the lid and pay for items.

Each cart accommodates two storage units, each of which is intended to carry multiple individual packages containing the same product, Shevelenko said. The units feature industrial-grade insulation and can hold heating plates and dry ice, and Tortoise is planning to upgrade them with electric climate control systems later in 2022, Shevelenko said. 

The carts are controlled by remote operators based in Mexico City, who guide them to the spots where they will be parked, monitor transactions and play audio messages for shoppers.

Tortoise is providing the equipment to retailers with no upfront cost and charges a fee of 10% of gross sales.