Kroger's Unmanned Delivery Service Launches In Arizona | Financial Buzz

Kroger’s Unmanned Delivery Service Launches In Arizona

The nation’s largest grocery chain Kroger Inc. (NYSE: KR) launched a new delivery service in Scottsdale, Arizona on Tuesday, which relies upon unmanned autonomous vehicles to deliver groceries to customers.

Under the Company’s partnership with Nuro, a Silicon Valley startup that offers a self-driving service, customers will be able to use the service by placing an order on the Kroger-owned Fry’s Food Stores mobile app or website. Although limited to a delivering within about a mile of the Arizona supermarket, it represents the latest step for industries trying to lower delivery costs of everyday items.

Yael Cosset, Kroger’s Chief Digital Officer, said “Kroger customers are looking for new, convenient ways to feed their families and purchase the products they need quickly through services like pickup and delivery.”

Kroger said it will deliver groceries using Nuro’s autonomous vehicle called the R1, which has no steering wheel and passenger seating.

Customers place an order on their smartphone or laptop and get a text message when the groceries are on their way. Another message will alert them when the delivery is curbside. Once the vehicle arrives, the customer will receive a code to punch in to open the doors, Giannonatti said. Customers will pay a flat fee of $5.95 and can request same-day or next-day delivery.

The unmanned delivery vehicles will be followed by a “shadow car,” driven by a person with the ability to stop or control it. This car is being used in the early stages of the program out of caution and will be phased out, said David Ferguson, President and co-founder of Nuro.

In today’s competitive grocery market, companies are turning to autonomous vehicles, automation, robotics and artificial intelligence to stand out. Kroger is competing with Amazon, Walmart and other businesses to capture consumers who want fast deliveries without hassles. For instance, Walmart is also testing a same-day grocery delivery service in China, and Amazon already offers free same-day delivery through Prime.