How autonomous vehicles could change grocery delivery and go-to-market strategies

It will be a while before driver-less vehicles are in common use, but using autonomous vehicles to deliver groceries may be closer than we think. Kroger, Walmart, and now Stop& Shop in Boston are testing the concept. Combined, these tests represent an important step in changing the way consumers will get their groceries.

Stop & Shop recently announced the pilot of a mini mobile store that comes to the customer with a limited supply of fresh produce, meal kit items, and other convenience items. Customers can shop directly from the mobile store, pay via the RFID-based app, and camera footage informs the company about which products were selected. Stop & Shop’s vehicle was developed by a company called Robomart.

In contrast, Kroger’s pilot at a Fry’s store in Scottsdale, AZ, and Walmart's pilot in Surprise, AZ both offer delivery of an order assembled from a much larger assortment and are designed to lower last-mile delivery costs for the retailer by using an autonomous vehicle.  While sharing similar goals, the pilots are with different companies.

• Kroger has recently added two R1 unmanned vehicles (pictured above) developed by a robotics company called Nuro. Kroger's delivery pilot offers same and next day delivery for a flat fee of $5.95 with no minimum order required.
• Walmart's AZ pilot uses Udelv's second generation autonomous vehicle called Newton. Per a Progressive Grocer article: "With 32 secure compartments to help keep groceries safe and chilled, the new van was developed over the past 12 months following thousands of deliveries for dozens of clients."

Even with all of the advantage of autonomous vehicles, there’s no guarantee that consumers will immediately opt for home delivery unless they are home bound, until – as Barnaby Montgomery of Yummy.com says – the service is “more convenient than a trip to the store.” He’s referring to the entire value proposition, not just time-saving convenience.

BMC POV

Positioning delivery as a perk available only to valuable customer households is one way to make deliveries more attractive – in other words, offering the service to gold or platinum customers who spend a lot with the retailer.

Kroger probably has the best data on customer loyalty in the grocery industry, so it seems likely that they could incorporate this benefit into their loyalty program, but other retailers like Stop & Shop or Walmart could also take this approach.

Such a strategy would help retailers see how driverless grocery delivery could fit into their go-to-market strategies. If a retailer has good customer spending data, this new last-mile option could be a way to establish stronger relationships with their best customers by providing what is almost a "personalized supply chain" direct to the home.