Farmstead, an online grocery company that delivers fresh, local produce in the San Francisco Bay Area, has launched an automated order replenishment offering, Refill & Save.
The service automatically queues up recurring weekly orders that include discounts on certain grocery staples, such as milk, eggs, fresh fruit, fresh vegetables and bread. Customers can then add or delete any items for the week, or even cancel a weekly order entirely, up to an hour before their delivery window.
Shoppers using Refill & Save will receive free weekly delivery in three-hour windows for orders $30 or more, or free same-day delivery for orders over $35. If orders are less than $30, shoppers pay $3.99 for the service. The grocer says 70% of its customers receive free delivery.
“That level of flexibility is very difficult to pull off, and we had to write a lot of software to support the operational efficiencies that are required to deliver rapidly,” said Pradeep Elankumaran, Founder and CEO of Farmstead in an interview with Retail TouchPoints. “The software is really the heart of Farmstead. We have software to manage inventory, reduce food waste, schedule a labor pool to pick and pack these orders in a very efficient way, and recruit and retain drivers.”
Farmstead leverages proprietary AI and machine learning technology to predict grocery trends and consumer purchasing habits. The technology helps Farmstead keep prices for certain products below the averages in Bay Area supermarkets. Self-learning predictive models enable Farmstead to predict demand so it doesn’t overstock, reducing food waste and optimizing delivery routes to save time and conserve fuel. The company even collects customer feedback through search engines as a way to more effectively source and offer new products.
“Most households buy many of the same things every time they grocery shop,” said Elankumaran. “In Farmstead’s case that helps us predict demand, reducing our costs and improving efficiency. In light of that, we were able to reduce our prices on certain staples while still making the business profitable.”
If successful, the retailer plans to grow its Refill & Save footprint from just 25% coverage of its network to 100%, with more local brand offerings and cheaper prices.