Dive Brief:

• Oklahoma City’s largest independent grocery chain, Buy For Less, has partnered with autonomous vehicle company Udelv to pilot an e-commerce delivery service. Udelv will supply Uptown Grocery, Buy For Less, Buy For Less Super Mercado and Smart Saver banners with 10 customized vans for deliveries in the metro area. The first test of the vehicles will begin in the first quarter of next year.
• According to a press release, the deal is Udelv’s largest since launching its autonomous
  driving vehicle (ADV) in January 2018. Through the program, the grocery banners are hoping to reach a broader range of customers living in food deserts. 
• Beyond technology tests, Udelv will have to work with Oklahoma ADV laws. “Oklahoma is actively developing a strategy to integrate the technology of automation through the work of the Driving Oklahoma Working Group. It is exciting to set the basis to support innovations like this and work with companies such as the Buy For Less family of brands at the forefront of its industry,” Mike Patterson, secretary of transportation and Oklahoma Department of Transportation executive director, stated in the press release.

Dive Insight:

It’s no longer just the big players testing out autonomous delivery, as one independent Oklahoma City grocer is jumping technology-first into the online grocery wars. 

The retailer's announcement comes not long after Kroger began testing autonomous delivery at a Fry’s Food and Drug location in Scottsdale, Arizona. In partnership with Nuro robotics, Kroger seeks to cut costs while also making grocery delivery more affordable to consumers, offering a $5.95 flat delivery fee to customers at the Fry's location. Walmart has also begun its own autonomous delivery pilot in Arizona — albeit with a twist. The self-driving vehicles, which are operated by technology firm Waymo, will deliver customers to a Walmart store in Chandler to pick up their online order, then ferry them home.

Beneficial not only for the consumer but also the retailer, autonomous delivery has the potential to reduce the costs of last-mile fees. In addition, ADV technology can ultimately help reduce labor spending and assist local retailers with expansion into rural markets.

Buy For Less is also capitalizing on the shortage of fresh food delivery options to those living in Oklahoma. According to a recent analysis by real estate firm Redfin, only 6% of residents in Oklahoma City live within a five-minute walk of a grocery store or farmers’ market.

The test may help Buy For Less stand out in a market that's seeing increasing e-commerce competition. Just last week Amazon announced the expansion of its Whole Food grocery delivery service into 10 additional cities, including Oklahoma City. And last month Shipt announced the expansion of its online grocery delivery service into Connecticut and Oklahoma, as well.

Looking forward, more and more grocery delivery services will look for cost-saving innovations in order to enter rural markets and grab more consumers looking for the convenience of online grocery shopping. However, the question as to whether those delivery services will be dominated by humans or autonomous delivery vehicles remains to be answered.