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Ahold Delhaize expands micro-fulfillment with Swisslog and AutoStore

Ahold Delhaize is expanding its micro-fulfillment capabilities as part of its omnichannel supply chain using warehouse automation technology from Swisslog and AutoStore.

Ahold Delhaize USA, a division of Netherlands-based Ahold Delhaize, is the parent company for Ahold Delhaize’s US companies, including its local brands, which comprise:

  • Food Lion;
  • Giant Food;
  • The Giant Company;
  • Hannaford and Stop & Shop;
  • Retail Business Services, a US support services company providing services to the brands; and
  • Peapod Digital Labs, its digital, e-commerce and commercial engine.

When considered together, the local brands of Ahold Delhaize USA comprise the largest grocery retail group on the East Coast and the fourth largest grocery retail group in the nation, operating more than 2,000 stores and distribution centers across more than 20 states and serving millions of customers each week through a wide variety of store formats with thousands of food and non-food items.

Peapod Digital Labs, Ahold Delhaize USA’s digital, e-commerce and commercial engine, has embarked on a new micro-fulfillment technology pilot with The Giant Company in the Philadelphia market.

Part of an e-commerce fulfillment center (EFC), the pilot leverages Swisslog’s solution which includes AutoStore technology empowered by Swisslog’s SynQ software, as well as Peapod Digital Labs’ proprietary manual picking capabilities.

The pilot launches as Ahold Delhaize USA companies continue to expand e-commerce fulfillment capabilities as part of readying an omnichannel supply chain and supporting the US brands as they pursue their ambitions of becoming the leading omnichannel grocery retailer in their markets.

JJ Fleeman, president of Peapod Digital Labs and chief e-commerce officer, says: “Over the past year, all Ahold Delhaize USA companies have seen a tremendous increase in online sales growth, and we believe this growth is here to stay.

“As we think about shifting consumer expectations and the future of omnichannel shopping, we must continue to build and evolve our already strong infrastructure to optimize pick-up and delivery.

“We’re excited to kick off this pilot with The Giant Company and Swisslog as we continue to build out e-commerce fulfillment capabilities, which we believe will be key in supporting continued omnichannel growth.”

The e-commerce fulfillment center is planned for the Philadelphia market to help meet customer demand in Center City and South Philadelphia. This location is expected to fulfill approximately 15,000 online orders per week for delivery to customers’ homes.

Nicholas Bertram, president, The Giant Company, says: “This pilot is an exciting milestone in The Giant Company’s omnichannel evolution as we work to transform the online grocery experience for our customers.

“As we continue to see incredible demand for Giant Direct across the Philadelphia region, working with Swisslog to incorporate state-of-the-art technology like AutoStore will not only bolster our overall e-commerce platform for future growth but also significantly increase our operating capacity, allowing us to deliver a faster, best-in-class experience to more customers each week.”

The hive robotic technology for the new e-commerce fulfillment center will include the AutoStore storage and retrieval system, empowered by Swisslog’s SynQ software and pick stations, as well as Peapod Digital Labs’ proprietary manual picking capabilities.

Applying the advantages of the AutoStore grid storage density and goods-to-person productivity gains in tandem with Peapod Digital Labs’ picking system will create a flexible solution ideal for streamlining grocery e-commerce order fulfillment.

Ahold Delhaize USA companies will continue other micro-fulfillment tests, such as the multi-shuttle pilot with Stop & Shop and TakeOff Technologies in the Hartford, Conn., market. Additional micro-fulfillment pilots will be announced in the coming months.

Once built, the new e-commerce fulfillment center will add to Ahold Delhaize USA companies’ growing supply chain. As of March 1, the supply chain will include 18 self-managed traditional distribution centers, 28 e-commerce fulfillment centers and over 1,100 click and collect locations.

By 2023, this network will increase to more than 27 distribution centers with additional e-commerce fulfillment center and click and collect growth as part of the overall transformation of the omnichannel supply chain.

Chris Lewis, EVP, supply chain for retail business services, Ahold Delhaize USA’s services company, says: “As we continue to transform the supply chain for the future, we’re doing so with the lens of creating a truly omnichannel supply chain, there for customers whenever, wherever, however they want to shop.

“By 2023, Ahold Delhaize USA companies will be serviced by one of the largest supply chains and private fleets on the East Coast. Continuing to explore ways to maximize the total infrastructure is critical as we create an omnichannel supply chain of the future.”

Mitch Hayes, vice president of e-commerce and retail, Swisslog, Americas, says: “Swisslog is excited to work with Peapod Digital Labs and The Giant Company to leverage automation technology and expand their e-grocery fulfillment capacity to maintain the expectations of their consumers.

“For the pilot, we’ve combined AutoStore with our Swisslog SynQ software platform, which has grown to have a very robust set of standard features geared specifically to e-grocery fulfillment.

“We couldn’t be more pleased to partner with Peapod Digital Labs and The Giant Company, both of which are leading the way in e-grocery fulfillment.”

Karl Johan Lier, CEO of AutoStore, says: “Projects like this will change retail forever, and it’s an honor to know our proven micro-fulfillment technology is providing Peapod Digital Labs and The Giant Company with the flexibility to build the infrastructure needed based on space and throughput rates of varying customer demand and order flow.

“We are very pleased that Peapod Digital Labs and The Giant Company chose AutoStore systems, empowered by Swisslog, to deliver the future of e-grocery.”

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