SUPPLY CHAIN

SpartanNash Fast-Tracks Omnichannel Effort

A NEW MICRO-FULFILLMENT CENTER OFFERS SPEED AND EFFICIENCY IMPROVEMENTS.

By Lynn Petrak

o meet consumers’ needs as they shop in different ways, SpartanNash continues to adapt its online services and infrastructure. This summer, the Grand Rapids, Mich.-based grocery retailer and distributor expanded benefits for its Fast Lane curbside pickup and home delivery customers and opened a new mini-warehouse to expedite order fulfillment. Aligning with the four-year anniversary of the Fast Lane online shopping program, the new 55,000-square-foot micro-fulfillment center opened in late July in Caledonia, Mich., and serves Fast Lane customers in west Michigan, who pay $49 for an annual subscription. As the company’s curbside pickup and delivery business increased during the pandemic, plans for the new facility also sped along. Buildout of the existing structure began in late 2020, and the project was finished by midsummer.

“Centralized fulfillment was on our radar, and COVID just accelerated that,” says Matt Van Gilder, director of e-commerce and digital marketing for SpartanNash, noting that the total cost of the micro-fulfillment center was about $5.3 million, including technology investments.

According to President and CEO Tony Sarsam, the facility represents a wave of the future that may require continual adjusting as consumers shift their habits and preferences. “Ten years ago, people thought the model of the future was how to deliver food to consumers at home. I think it was a surprise this past year how much enthusiasm there was for click-and-collect versus delivery at home,” Sarsam tells Progressive Grocer, noting that this will be an insightful experience for shoppers as well as for the retailer. “We will learn a ton of stuff just like that. As customers figure out what makes sense for them, we will work with them and adjust our model.”

The fulfillment center holds 16,000 shelf-stable, fresh, refrigerated and frozen

Efficiency is important for us, and this building will allow for greater effectiveness in fulfilling orders.”

—Tony Sarsam,

products, and is set up to handle up to 1,000 orders a day. By mid-August, customers of 24 company-owned stores in the Grand Rapids and Holland areas of Michigan can have their Fast Lane orders fulfilled by the new facility. SpartanNash currently operates 149 stores around the United States.

While automation may be in the future of this fulfillment center, orders are currently picked and packed by hand by SpartanNash team members. In the center of the warehouse, items are organized by velocity instead of by category, with high-volume products in the center, and other items on the top and bottom rows. Heavy or bulk items like cases of soda will be picked first to anchor orders, while delicate fresh items like eggs are picked last to protect against breakage. Thanks to the micro-fulfillment center’s meat-cutting and deli-slicing machines, Fast Lane customers can have fresh proteins portioned to their specifications and packaged on-site. SpartanNash’s personal shoppers communicate directly with shoppers via text messaging to determine their preferences, such as the thickness of steak cuts or deli meat slices. Customization is a point of differentiation with the online service, according to Sarsam. “It’s that personal touch – we want to be known as providing a higher level of service,” he notes. For each customer’s order, products are packed into insulated or shelf-stable totes and brought to a centralized area near the shopping dock. Completed orders are then taken out via a truck bay at the back of the building and delivered either directly to a store for curbside pickup or to the shopper’s home.

As one might expect, technologies have been put in place to ensure real-time order information and communications with shoppers. “We have an IT team that is very connected to make sure this works, and technology has pushed forth this experience,” Sarsam remarks.

While the setup is shopper-centric, the new capability will also streamline SpartanNash’s operations. “Efficiency is important for us, and this building will allow for greater effectiveness in fulfilling orders,” Sarsam adds.

The Fast Lane program continues to be a bright spot for SpartanNash. Transactions have increased 32% since January 2020, with the number of unique customers up by 45%. In June, the company added new benefits for Fast Lane subscribers, including monthly bonus savings from different areas of the store, free unlimited curbside pickup, and half-off delivery.

In addition to west Michigan, dozens of SpartanNash locations in Michigan, Minnesota, Nebraska, North Dakota, South Dakota and Wisconsin offer Fast Lane services. Participating banners include Family Fare, D&W Fresh Market, Family Fresh Market, VG’s Grocery, Dan’s Supermarket, Forest Hills Foods, and Ada Fresh Market.

Are other micro-fulfillment centers in the plans for those areas? “We certainly hope that as we learn from this one [facility] here, we will learn things that will allow us to expand,” Sarsam says.

Totes filled with orders are loaded into a truck for transport to local stores to fulfill orders placed through SpartanNash's Fast Lane program. Products in totes (far left) and in warehouse racking are picked manually at SpartanNash's new Caledonia, Mich., micro-fulfillment center, where President and CEO Tony Sarsam cut the ribbon in late July.