grocery shopping made easier

Automation Makes Online Grocery Shopping More Accessible

TakeOff Technologies’ micro-fulfillment centers offer a solution to high eGrocery costs

Zoe Landi Fontana, The Weekly Journal @Landi_Zoe

Once seen as a convenience reserved for those with enough disposable income to shave an hour or so off their weekly errands, online grocery shopping has rapidly evolved into a necessity for retailers.

Slower to join the ecommerce trend, grocery stores had lagged behind other retail sectors prior to the pandemic. Yet, creating an efficient omnichannel method of selling groceries online while maintaining a brick-and-mortar location, could increase grocers’ total share of wallet by 2030%, according to a McKinsey & Company report published in 2021. Mitchell Freeman, Chief Financial Officer of

Takeoff Technologies - an automated grocery fulfillment solution - explained the strengths and weaknesses of online grocery models in an interview with THE WEEKLY JOURNAL.

“We’ve been seeing incredible growth in grocery over the last few years,” said Freeman.

In 2017, the grocery industry was valued at around $7.2 billion, of which online penetration made up 2.7%. As a result of COVID-19, grocery ecommerce has jumped to 9.5% of a now $7.3 billion industry. In the next few years, McKinsey & Company projects eGrocery penetration in U.S. markets to reach at least 14%.

The grocery industry

The grocery industry, which makes up half of all retail, is characterized by its unique properties. It’s an industry with low margins and, oftentimes, single-digit profits. Grocery products are perishable and highly personal to the individual consumer.

Consumers in the grocery industry are pricesensitive and are not willing to spend a ton more for a convenience they’ve been doing themselves forever.

“Delivering groceries to an end consumer requires the ability to fulfill a wider range of low price products at affordable prices. Historically, the two services that an eGrocery customer pays for - picking the order from the shelves and bringing it home - were done for free,” Freeman explained. Thus, stores are left in a predicament of needing to maintain low prices in an environment of increased costs. What would enable grocers to provide online grocery fulfillment services without drastically increased product prices and extra fees?

Typical Grocery Run

First, we should look at the numbers behind a typical grocery run in the U.S. A traditional basket is made up of 50 items at $3 each with grocery retailers making, on average, a 5% margin on each transaction. So, they make around $7.50

In fact, on you in the hour and a half it takes you to shop and drive back home. With a typical manual As a result of picking model, where one COVID-19, grocery person is assigned to an order, ecommerce has wandering the store, and jumped to 9.5% of grabbing the correct items off a now $7.3 billion the shelves, a retailer in the U.S. industry. will spend anywhere from $20 to $30 per online order. Thus, to simply maintain their original margins, grocery retailers must charge a 30-40% increase in product prices for those shopping online. “[This] is why they had to raise prices so much… hidden price increases, far fewer discounts on the online application than in the store, service fee, delivery fee, tip…,” Freeman elaborated on the economics behind inflated prices for online customers, “it’s not sustainable for the majority of America.”

The TakeOff Method

The manual picking model suffers from all same problems that grocery retailers suffer from - low inventory visibility, high substitution, and limits in the speed at which a picker can move around the store. Micro-fulfillment, an automated solution, provides end customers and grocers with nearly perfect visibility of the inventory. Customers can make substitution choices on the check-out screen, instead of trusting the picker to find a substitution for them, or risk not receiving a similar item at all. Additionally, real-time data gathered by automated systems help with predictive analytics on inventory, performance operations, and logistics operations.

To reiterate, the central problem lies in maintaining low prices in an environment of increased costs TakeOff Technologies has found the solution - automated micro-fulfillment centers. The company shrank hyper-local automation down to a footprint that can fit in the back of a grocery store or small warehouse, offering the only eGrocery solution to generate profits. On average, their micro-fulfillment centers can assemble an order in less than 15 minutes. In contrast, the manual picking method takes at least an hour. Being hyperlocal - located close to where customers live and shop - reduces the costs of delivering as well.

“Our eGrocery solution was created with the grocer and the shopper in mind. Grocery is an incredibly complex industry, and our products are unlike any other: they are low-value, perishable, heavy, and low-margin. Our automated solution is flexible enough to manage these complexities. We ensure the correct picking method for the correct product,” TakeOff Technologies describes on its website.

Governor Pedro Pierluisi. >The Weekly Journal

Pierluisi highlights

administration’s achievements

Admits there are still challenges ahead

Juan A. Hernández, The Weekly Journal

Governor Pedro Pierluisi reiterated yesterday in his State of the Commonwealth address that the Government’s Debt Adjustment Plan is “the most transcendental step toward the economic recovery” of Puerto Rico and that the island can finally invest in its priorities.

“The plan is good for Puerto Rico, it clears our credit, protects our pensioners and returns the savings to tens of thousands of our public servants,” said the Governor after admitting the island is not out of the woods yet.

“Even though we still have many challenges ahead, we can now speak about the future, about a greater control of the pandemic, the end of the bankruptcy, investing in our people, of a more efficient government, of infrastructure being built throughout the island and promoting our economic development,” said Pierluisi to the legislators and public gathered at the House of Representatives.

The Governor emphasized on Puerto Rico’s “sustained improvements” last year in almost every single economic indicator, particularly the unemployment rate.

“Last January, the unemployment rate was 9 percent. It is now 6.8 percent, the lowest rate in our entire history,” said Pierluisi while pointing out that this rate was not caused by Puerto Ricans leaving the island. “We have 1,312,000 people working, an employment level not seen since 2007.”

Pierluisi also pointed out that the increase in the number of people now having a job happens concurrently with the minimum wage increase.

Regarding tourism, the Governor said government revenues from that economic sector had an increase of 16% last year, and a specific increase of 35% on revenues from lodging.

Pierluisi said that all the island’s efforts on tourism promotion have also gone hand in hand with promoting Puerto Rico as an investment destination. On the subject, he mentioned that more than 115 companies already established on the island have invested more than $500 million and created over 8,000 direct jobs, since he took office.

About the public-private alliance (APP) between the government and LUMA Energy, the Governor said that greater stability in power distribution has been achieved, despite the initial hurdles the company had to face last year, and more than 18,000 connections with private power generation systems have been established.

“Just last week, the Fiscal Oversight Board approved 18 projects that will add 844 megawatts of renewable energy to our system, which along with the 250 megawatts of battery storage capacity, are fundamental for our energy policies,” said Pierluisi.

Pierluisi openly urged the Popular Democratic Party dominated legislature to be more cooperative when working for the people. He lamented the fact that, while he has signed into law 137 bills and vetoed 44, only three of the 76 bills he has submitted to the Legislature have been considered.