Instacart looks to replace shop workers with robots in bold plans

Instacart has previewed plans to replace a proportion of its employees with AI robotics as part of a long-term plan to cut company expenses.

The plan revolves around building a largely automated fulfilment system in the US, where the company operates, in which robots would be used to gather dry goods such as cereals and cans of soups while the remaining human workforce would handle produce and deli items, according to Bloomberg.

Instacart has reportedly been planning the move for over a year but is yet to add any supermarkets to its roster for the operation.

The documents show that the company had planned to test its fulfilment centres later on this year, however testing has been delayed due to the brand falling behind its schedule.

The grocery delivery company, which was valued at $39 billion in March this year, hasn’t settled on any one automation provider however leaked documents show it has asked several to manufacture the tech.

In a separate report from the Financial Times, Instacart  said it had sent out requests to five robotics companies.

The strategy’s delay could potentially scupper plans for the company to go public this year as the US grocery delivery industry exceeds $1.4 trillion.

Instacart currently employs an army of gig workers which fulfil orders in over 45,000 stores owned by 600 retailers across the US, however the company is seeking to secure a new model through the use of robotics as its current model is expensive and unsustainable in the long run.

READ MORE: Skyrocketing delivery costs are forcing retailers to accelerate change through AI

According to the president of the logistics consulting firm MWPVL International Inc Marc Wulfraat, the price markups, delivery fees and tips add up to 25 per cent on top of what a shopper would typically pay for a Instacart grocery order.

“There’s a hefty price for this convenience we all love so much,” Wulfraat told Bloomberg.

The plans put forward by the brand to automate its supply chains and other operations with robotics would severely cut costs, making orders for cheaper for customers and opening the service up to less affluent areas of its consumer base.

An Instacart spokeswoman said: “[Instacart is] committed to supporting our brick-and-mortar partners and continuing to invest in and explore new tools and technologies that support the needs of their customers and further enable their businesses to grow and scale over the long-term.”

However there are concerns from experts that Instacart will not be able to pull off its ambitious project before retailers figure out how to do it for themselves.

These concerns would be justified as supermarket chain Kroger recently opened its first robot-powered fulfillment center in partnership with Ocado Group in March and other brands are starting to look into similar operations.

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AutomationCompaniesDelivery / Supply ChainNews

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