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Kroger acknowledges that its bet on robotics went too far

grocerydive.com

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Re: Kroger acknowledges that its bet on robotics went too far

#41

Post by irjustin »

brookst wrote: post #38

Weird headline, totally unsupported by the article. According to the article, there were several strategic blunders, including trying the model outside of cities where lack of density cut against it. Plus the apparent dismissal any value their 2700 retail locations could provide. As far as I can tell, Kroger didn’t acknowledge anything except a change in strategy.

Doesn't that support the article? their bet was massive robotics in centralized warehouses, but that turns out not to be profitable.

Unsure how the headlines doesn't align. Maybe it's different than what I'm seeing:

> Kroger acknowledges that its bet on robotics went too far

Re: Kroger acknowledges that its bet on robotics went too far

#42

Post by michaelt »

jlarocco wrote: post #17
mosura wrote: post #3

Sounds like they just put them in the wrong places. > Fenyo added that Kroger’s decision to locate the Ocado centers outside of cities turned out to be a key flaw. > “Ultimately those were hard places to make this model work,” said Fenyo. “You didn’t have enough people ordering, and you had a fair amount of distance to drive to get the orders to them. And so ultimately, these large centers were just not processing en…

But I think in the cities Kroger grocery stores serve as the fulfilment centers, so they don't need robotic ones. There's probably still room for automation, but it might have to be different than warehouse automation.

It depends on your business model.

If a basket of groceries brought online costs $15 more than the in-store prices, then you can pick in-store profitably, very easy. That's the instacart model.

But if a basket of groceries brought online costs about the same as buying in-store? With the retailer bearing the costs of picking, packing and delivery instead of the customer?

Well then you need something more efficient than a store.

Re: Kroger acknowledges that its bet on robotics went too far

#43

Post by markbao »

gedy wrote: post #36
markbao wrote: post #16

Earlier quoted context omitted.

McDonald’s is an interesting example because they’re increasingly replacing cashiers with kiosks. Robotics/LLMs seem to have diminishing returns compared to that in the order taking realm.

I don't know what they are thinking, the kiosks are not cheap to install or maintain, they are buggy, and they've put me off from going into McDs anymore. The In-N-Out nearby is cheaper, friendlier with plenty of employees working, (and better quality), so not sure what McD's end game is here.

I don’t like them either. The UX is annoying and it’s way too large. The benefit is that I get to see more options than can fit on the screens and they have photos, but still in person just seems better.

But I’ve read they’re effective, apparently, in consistently upselling compared to a human, so I’m guessing that’s their play.

Re: Kroger acknowledges that its bet on robotics went too far

#44

Post by [deleted] »

mosura wrote: post #3

Sounds like they just put them in the wrong places. > Fenyo added that Kroger’s decision to locate the Ocado centers outside of cities turned out to be a key flaw. > “Ultimately those were hard places to make this model work,” said Fenyo. “You didn’t have enough people ordering, and you had a fair amount of distance to drive to get the orders to them. And so ultimately, these large centers were just not processing en…

[deleted]

Re: Kroger acknowledges that its bet on robotics went too far

#45

Post by markbao »

glitchc wrote: post #24
markbao wrote: post #16

Earlier quoted context omitted.

McDonald’s is an interesting example because they’re increasingly replacing cashiers with kiosks. Robotics/LLMs seem to have diminishing returns compared to that in the order taking realm.

Sure, but not the kitchen staff, which is where the robotics dream is supposed to take you.

True, that’s a good example of the commenter’s “last 5% is the 95%”

Re: Kroger acknowledges that its bet on robotics went too far

#46

Post by martinald »

danpalmer wrote: post #34

This is a failure of business model and logistics, not a failure of the robotics. > Fenyo added that Kroger’s decision to locate the Ocado centers outside of cities turned out to be a key flaw. They over-spent on automating low-volume FCs. You could draw comparisons to Amdahl's law, they optimised the bit that wasn't the issue, the real issue was delivery distances and times. Ocado has had good success with the robot…

I think we are mixing up two things here.

Robotics for picking and the general feasibility of grocery delivery in the US.

Ocado is good because their stock levels are far more accurate than the other supermarkets for online ordering, so you don't get as many substituted/missing items. This is sort of a side effect of having dedicated picking facilities Vs "real" supermarkets. I would not be surprised if they "lose" less stock as well compared to in supermarket fulfillment.

Then you have "is online grocery good in the US"? There's a lot of areas of the US that have reasonable density for this kind of service imo, and the road infrastructure is generally far superior to the UK which negates any loss of density (as you care about time between deliveries, not distance per se). I imagine the much better parking options in most suburbs in the US also helps efficiency (it's an absolute nightmare for a lot of the online delivery cos when there isn't off street parking in the UK and they have to park pretty far from the drop).

It sounds to me that Kroger just messed up the execution of this in terms of "marketing" more than anything.

Re: Kroger acknowledges that its bet on robotics went too far

#47

Post by Dylan16807 »

rolandog wrote: post #30
Frye wrote: post #26

Also worth mentioning Kroger just lost a multi million dollar lawsuit in Florida after one of their delivery trucks hit a cyclist. I wonder if this has anything to do with it as well.

"Something, something, ... omelettes ... few eggs" -- mouthpiece from corporation that lobbies to cut regulations

I can't find the story, but if it's a human-driven truck there's nothing special about a vehicle hitting someone. Everyone that drives a vehicle is accepting that risk. It's not heartless to have vehicles. And I don't even know what particular regulations you're trying to imply.

Re: Kroger acknowledges that its bet on robotics went too far

#49

Post by bcrosby95 »

markbao wrote: post #16
liquidise wrote: post #5

Good news for blue collar workers, tough for investors. The bean-counting dream of LLM's and Robotics remains, but until ChatGPT is placing your order at Mcdonalds drive-thrus and Amazon is laying off warehouse associates en masse, i'd say that last 5% is still taking 95% of the time.

McDonald’s is an interesting example because they’re increasingly replacing cashiers with kiosks. Robotics/LLMs seem to have diminishing returns compared to that in the order taking realm.

I love it when people invent things to force everyone perform self service and call it 'progress'.

Re: Kroger acknowledges that its bet on robotics went too far

#50

Post by softwaredoug »

adxl wrote: post #48

Whenn I lived in Atlanta the Krogers each had a nickname. There was disco Kroger because of its disco ball. There was murder Kroger that purportedly had been the site of a murder. This I guess is Robo Kroger.

In Charlottesville all the Krogers are quite different.

A weird, dark, maze-like warehouse-feeling Kroger that just closed.

We have a really nice Kroger a bit outside town. I always think of it as the Gucci Kroger.

A college-kid, cheaper Kroger close to the center of town. The cheaper version of the Harris Teeter nearby.

There's as much variation in individual Krogers as between other grocery chains!

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