Got groceries? H-E-B to try out self-driving delivery system
Customers near H-E-B’s Olmos Park store soon can get their eggs, fruit and tortillas dropped off by a vehicle with no one at the wheel.
The San Antonio company is working with Udelv, an autonomous delivery startup in California, to test self-driving vans on streets around the store starting this fall.
“The world is changing fast and our customers’ expectations are changing,” said Paul Tepfenhart, senior vice president of omnichannel and emerging technologies at Central Market and H-E-B. “We have a growing, thriving online business, and we’re trying to figure out how in the world we’re going to keep up with this emerging demand.”
During the first phase of the pilot program, a Udelv employee will drive a van developed by the startup with an H-E-B employee along for the ride to help with deliveries.
As the van’s computer collects and analyzes data and learns the optimal routes, it eventually will take over the maneuvering. However, H-E-B still will have the ability to control the van remotely, Tepfenhart said.
The company will evaluate any licensing and regulatory requirements during the later phases of the program, when the technology handles the driving, a spokesperson said.
Gov. Greg Abbott signed a bill in 2017 allowing autonomous vehicles on Texas roads.
Olmos Park customers who use H-E-B’s curbside and home delivery services are eligible for the pilot. They’ll be invited via email to participate before it launches.
The delivery zone will encompass homes within about 5 miles of
the Olmos Park store and will expand over time.
After a customer orders groceries online, the goods are loaded into climate-controlled compartments in the van. When it pulls up to a customer’s house, the containers will open and the customer can grab his or her groceries.
It’s a trial, Tepfenhart said.
“I don’t have expectations,” he added. “I don’t get married to the outcomes at all. If customers love this and it works in our system … we’ll expand it.”
Amid growing concerns about automation replacing workers, H-E-B — the state’s largest privately-held employer, with 400 stores in Texas and Mexico and annual sales of $26 billion — will continue hiring and is “extremely committed to its partners,” Tepfenhart said.
“These tools are about better serving our customers and helping our partners cope with the growing and changing business,” he said. “This is not any other kind of initiative other than keeping up with demand.”
The company is working to boost its mobile and online offerings. After acquiring delivery startup Favor in 2018, H-E-B beefed up its technology hires and opened a new facility in Austin that serves as the headquarters for Favor and puts H-E-B’s digital employees in Austin in one place.
The retailer plans to expand curbside pickup and grocery delivery services to 200 of its stores by year’s end, and is building more fulfillment centers to handle online orders. It’s also planning to roll out a new mobile app later this year.
H-E-B joins a line of companies exploring self-driving technology and grappling with the costs and logistics of expanding delivery services. Customers have come to expect low prices and speedy delivery, but handling shipping and fleets of drivers is pricey.
“Last-mile delivery is so unbelievably expensive,” retail analyst Jan Kniffen said, referring to getting an order from a driver or courier to a customer.
Kroger, Amazon and other retailers have experimented with autonomous vehicles, and Udelv also is working with Walmart to test its vans at Arizona stores and with XL Parts to try out the technology in Houston.
Harnessing the technology eliminates the cost of drivers and reduces shipping costs, Kniffen said, and some people will lose their jobs as more companies adopt it.
But it’s still being developed, and it remains to be seen how liability issues and state regulations will shake out, he added. Though many people aren’t comfortable getting into a selfdriving car, they may be less unnerved by an autonomous vehicle dropping off their groceries.
“Everybody’s looking at this,” Kniffen said.