The robotic system is on a roll, summoning a plastic bin stocked with your Cheerios. Next, the string beans you asked for go on the assembly line.
The machine tells a worker how much of each item he needs to bag.
This new system at Sedano’s Supermarket fills online orders lightning fast — 60 items in five minutes or less. And that speediness is Sedano’s strategy to cater to rushed customers who don’t have the time — or desire — to walk the aisles themselves.
Sedano’s is among a growing number of supermarket chains using new technology to make shopping even more convenient while also competing with e-commerce titan Amazon.com. Experts say the super-competitive nature of supermarkets means grocers have to find new ways to provide groceries as fast and cheaply as possible.
“It’s a symphony of chaos,” Javier Herran, Sedano’s chief marketing officer, says of how efficiently the machines run. “Rather than a person fill your order and go to a shelf, this machine brings the shelf to you.”
Nearly half of the Sedano’s supermarkets in South Florida have benefited so far from the behind-the-scenes robotics, which are warehoused in a private, 11,000-square-foot area of a Sedano’s at 14655 SW 56th St. in Miami.
Customers select their groceries on Sedanos.com and when they want to pick them up from 15 participating supermarkets in Miami-Dade. Sedano’s needs a three-hour window to fill the orders because Sedano’s employees pack the totes in Sedano’s trucks and deliver them to these 15 stores for the customers to pick up. Customers call when they’ve arrived and an employee comes out to place the bags in your car trunk.
Although Sedano’s is not delivering the food — yet — it’s aiming to attract customers through the faster shopping experience. The system will save Sedano’s money on clerks and cashiers, and customers will value how they don’t get billed extra fees for delivery by competitors, said Max Pedro, co-founder of Takeoff Technologies, the Waltham, Mass.-based company that created the robotics.
Customers still may want to shop the aisles for “inspiration” buys — whether to pick a bouquet of flowers and first see the food to make a decision over rack of lamb or steak, Pedro said. But “who gets excited about roaming the aisles to pick out toilet paper? Online groceries is no longer a luxury, it’s a necessity. People are time starved and they want the convenience.”
Amazon also has gone into the grocery-store business by creating its own walk-in, walk-out market in Washington state. In addition, last year it launched a delivery service of products from its Whole Foods Market, including in parts of South Florida and parts of New York City. Prime members can shop electronically and have fresh produce, bakery, dairy, meat and seafood, and flowers delivered in an hour.
Local supermarkets are carving their own path forward despite challenges. When supermarkets began dabbling with selling groceries online “they were losing money in every order,” Pedro said. “We called it stapling dollar bills to every bag.
“Groceries is a weird animal where the value of the product is very low, it weighs a lot, and it spoils super fast,” he said. “So doing e-commerce of groceries has been hard to do and extremely expensive.”
Since unveiling the service to the public in December, Sedano’s fills about 30 to 40 orders a day and its goal is to surpass 100, Herran said.
Sedano’s, which declined to say exactly how much it spent on the machines, sees the technology as a recipe for success. The warehouse space set aside for the system, which can store 14,000 items, takes up less of a footprint than a traditional market.
The technology costs a “few million” dollars for the automation, Pedro said. There is also the additional cost to remodel a store to carve out at least 10,000 square feet for machinery and storage.
The system is the first “robotic storage and retrieval system” for a grocery store to boost efficiency and speed up the selection, said Bill Bishop, the co-founder of Brick Meets Click, a food-retail consulting firm.
It’s a more cost-effective way of getting groceries out the door, he said. For supermarkets that offer delivery service, they still need a person to walk up and down the aisle — “and that part of the business is substantially less profitable because that work used to be done for free” by the customer themselves, he said.
What’s the future for grocery shopping? Bishop estimates 6 percent of grocery sales are done online already, and that number can easily reach double digits in another decade.
“Some are embracing it enthusiastically like Sedano’s and others are nervous what it means for the future,” he said.
Among the markets using new technology:
— Amazon Go, which has no checkout lines, cashiers, or registers. The store is located in Seattle, right near Amazon’s campus, and shoppers scan a QR code on their phone and then shop. As they walk out the door, a computer automatically scans the items and charges them for what they took. The company plans on expanding to New York.
— Kroger, which is using unmanned autonomous vehicles to deliver groceries in Scottsdale, Arizona.
And in San Francisco, Standard Cognition operates Standard Store, similar to Amazon Go in that consumers shop and leave without scanning or stopping to check out. But there are no sensored shelves or turnstiles — instead, overhead cameras keep track of what customers take and bill them accordingly. So far, Standard Cognition has signed on four large retail customers that will use its technology, including a pharmaceutical distributor in Japan that plans to launch 3,000 cashier-less stores by 2020, according to a spokeswoman.
Supermarkets “seem to be a good fit for retail technology innovation” because they adopted to the things like self-checkout long ago, said Evan Shiue, director of strategy and finance at Standard Cognition. “Autonomous checkout is really the next natural step in that evolution,” he said.
Laura S. Strange, spokeswoman for the National Grocers Association, said the “landscape and the competitive landscape has changed. If you asked a grocer 20, maybe even 10 years ago who their biggest competitor was, they’d point to another supermarket.”
The internet has changed that, and so has the needs of demanding customers who are “essentially looking for food when they want it, how they want it and where they want it.”
Takeoff Technologies also plans to expand. It began providing its machine system to a Stop & Shop in Connecticut last month. Two more will open at Albertsons Cos. in the San Francisco area this summer. Other projects are pending, including Europe and Asia, the company said.