Delivery

Delivery execs from Kroger, Walmart, and Shein tell us their main priorities

Localization, automation, and even drone deliveries are top of mind.
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Francis Scialabba

· 5 min read

Much like stand-up comedy, e-commerce is all about nailing the delivery. That’s why retailers have execs whose job it is to make the shipment process as quick, easy, and cheap as possible.

There are a lot of ways to do that, and they’re not always simple, so we caught up with delivery heads from Kroger, Shein, and Walmart to share how they’re delivering on their top priorities.

Bill Bennett, VP of e-commerce, Kroger

In March 2020, the run rate for Kroger’s digital sales grew from $5 billion to $10 billion in three days, according to Bill Bennett, the grocer’s VP of e-commerce. Since then, he said the company has been working to turn the spike into a “sustainable trend.”

  • To do this, it’s rolled out a slew of delivery programs, including its 30-minute delivery solution, Kroger Delivery Now, and a Boost membership, which offers shoppers next-day and two-hour delivery on select orders. Still, that growth isn’t without its challenges.

“Figuring out how to cover that last mile efficiently, while also meeting the customer’s desire for speed, for full assortment, for low costs—all those things together pull in opposite directions,” he said.

Growing its “hub-and-spoke” delivery network, which was formed in partnership with Ocado, and uses AI, robotics, and automation, has helped ensure that all those factors are moving in one direction. Bennett said these warehouses essentially mitigate the drawbacks that new stores present—like cost, lack of flexibility, and limited reach.

  • A single 60,000-foot fulfillment center Kroger opened in Groveland, Florida, offers grocery delivery to nearly the entire state.
  • With 20 orders per delivery van and opportunities for “perfect inventory rotation,” Bennett noted these facilities are better for both the bottom line and the environment, and help differentiate the grocer from others.

“That opportunity to enter a market quickly and have a presence across almost the entire state is a really big technological unlock for the industry broadly, and for Kroger specifically,” he said.

George Chiao, president of US operations, Shein

As its popularity grows stateside, Chinese fast-fashion retailer Shein is zooming in on localization, George Chiao, its president of US operations, told us.

  • The company recently opened a 600,000-square-foot distribution center in western Indiana, he noted, which is working to expand to 1.5 million square feet and will be adding more mechanization and automation.
  • Plus, early next year, it’s opening a 1.8-million-square-foot facility in Southern California. A center in the Northeast will likely follow, he said.
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These new facilities will help Shein lower its two-week shipping time by three or four days and help it navigate unpredictable supply chains. But they also present a new challenge: a shortage of delivery drivers in the US. Citing data from the American Trucking Association (ATA), Chiao said the US is down ~80,000 drivers, with that figure set to double by 2030.

“The shortage of drivers, combined with the spike in e-commerce orders and e-commerce deliveries, if not handled properly, could have a long-term impact on the customer experience,” he noted.

  • The shortage is the worst for longer-haul drivers, per ATA, so Shein is partnering with regional carriers and shippers, which will add “more diversity and bandwidth” to its network, Chiao said.

Jennifer McKeehan, SVP of end-to-end delivery, Walmart

At Walmart, delivery is up nearly 40% YoY, so you could say it’s a pretty big priority for the retailer. Right now, the company is largely focused on growing its reach: It operates 4,700 stores within 10 miles of 90% of the population, Jennifer McKeehan, its SVP of end-to-end delivery, noted, with 240,000 SKUs available for either two-hour, next-day, or two-day delivery.

  • Plus, it has its own proprietary delivery offering with its Spark Driver Platform, which reaches 84% of US households.

With all that reach, the big box store’s main delivery challenges come in meeting customer expectations, she said. Those include making more items available for pickup and delivery and ensuring a driver is available in the timeframe customers request their deliveries, she said.

Ensuring that solid experience requires lots of planning—both for the near-term (Walmart has been zeroing in on prep for the holiday-shopping frenzy for the past six months) and for the innovations that could define delivery in the next few years.

  • For Walmart, that future tech includes both electric vehicles and drone delivery. It’ll have 34 sites going live with these operations by year’s end, McKeehan said, it’s a “key part” of Walmart’s strategy that doubles down on its “commitment to regeneration and sustainability.”

“Our challenges are really one, around, just making sure that we’re continuing to scale at the incredible pace we are, but also making sure that we’re planning for the technology of the future,” she said.

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