Bloomberg reports that while Instacart has what it calls "an audacious plan to replace its army of gig shoppers with robots," its plans have stalled out, with not a single client supermarket having signed on to test it.
Here's how Bloomberg frames the story:
"The plan, detailed in documents reviewed by Bloomberg, involves building automated fulfillment centers around the U.S., where hundreds of robots would fetch boxes of cereal and cans of soup while humans gather produce and deli products. Some facilities would be attached to existing grocery stores while larger standalone centers would process orders for several locations … Under one proposal, Instacart would create a network of stand-alone fulfillment centers that would handle more than 3,500 orders a day with more than 100,000 units sold, according to documents reviewed by Bloomberg. More than 700 robots and about 160 people would do the work, with the machines fetching most of the items and workers gathering fresh and perishable food. The installation would cost $20 million, with annual maintenance costs of $380,000 a year. A second option is a smaller 25,000-square foot attached to a store that would handle more than 700 orders a day totaling 22,000 items. It would have more than 150 robots, 40 workers and would cost $6.5 million to set up and $270,000 a year to maintain, according to the documents.
"Under the plan, the supermarket chain would forecast demand and handle inventory, while Instacart would process customer orders and line up delivery drivers. A separate technology partner would provide the automation. The company has been working with the U.K. logistics consulting firm Bis Henderson to evaluate proposals from various robotics outfits and had planned to open the first facilities at the end of this year to test the concept and assess the potential savings, according to the documents."
The story says that one question for Instacart is whether it "can pull this off before grocers figure out how to do it themselves. In a potentially ominous sign, chains are already starting to bring pieces of their e-commerce operations in-house and partnering with venture-backed upstarts looking to muscle in on Instacart’s turf. Kroger, meanwhile, opened its first robot-powered fulfillment center in partnership with Britain’s Ocado Group Plc in March."
- KC's View:
It occurs to me that Instacart is likely to be looking for ways to get retailers to pony up funds to help build out all this infrastructure, but I would think that these folks would or should be more than a little resistant; after all, one of the purposes of all this stuff is to create a mechanism that will help Instacart be even more competitive with those clients at some point.
The question retailers need to ask themselves is if all this investment in Instacart's view of the world makes them close to or further away from their shoppers.