Hey Amazon, Kroger’s new delivery partner operates almost entirely on robots

If you haven’t heard of Ocado, you’re not alone. Until now, the company’s efforts have been limited to the U.K., where it says it serves 580,000 active users. To those customers, Ocado looks like a garden-variety digital storefront, where you buy groceries just the way you would on Amazon or any other e-commerce site. (One bit of noticeably British flavor: Instead of adding items to a digital shopping cart, you click to “add to trolley.”) But it’s what happens behind the scenes that’s interesting. The company’s end-to-end logistics infrastructure includes vast, highly mechanized warehouses, where AI-powered robots whirr about on a grid. In an article last year, Forbes described the way these facilities are laid out like giant chess boards; the robots navigate like rooks, picking up items from bins of goods organized by square.

For its part, Ocado says each warehouse works like a mechanical beehive, with robots passing one another at high speeds—often moving with only 5 millimeters of space between them.

“We call the robots a swarm because they collaborate like a swarm of insects,” Paul Clarke, the company’s CTO, told Forbes. “If one of the robots get sick, any of the others can take its place.”

For now, Ocado’s warehouses aren’t fully automated. The company still uses human workers to actually bag groceries before they go out for delivery—though that may change. According to Forbes, the company is working to develop a dextrous robot that can handle fruit and other soft or perishable objects with the same gentle facility as human fingers, which would allow for machine packing. The company is also working to automate its fleet of about 100 vans, each of which deliver about 2,000 orders a week, with a driverless delivery pilot in London. The enormous logistical challenge here is addressed with the help of—guess what—its proprietary AI and machine-learning tools.

“Our vans are equipped with a range of IoT sensors that log relevant data during deliveries such as location, wheel speed, engine revs, braking, fuel consumption, and cornering speed,” the company writes on its blog. “Our engineers can then feed this data into the routing software so that the algorithm is constantly learning and re-optimizing the delivery routes, therefore making the routes we drive tomorrow hopefully better than the ones we’ve driven today.”

These efficiencies enable a surprising degree of customer convenience: For next-day deliveries, Ocado shoppers can schedule their orders to arrive during any one-hour block between 5:30 AM and 11:30 PM. That means no waiting around for the postman to arrive—even better than Amazon—and the company says 95 percent of its deliveries are on time.

For its partnership, Kroger has obtained an exclusive license to use Ocado’s technology in the U.S. At the same, it has upped its one-percent stake in the company’s publicly traded stock to 5 percent, valued at approximately $283 million (£183 million). In return, Ocado plans to open 20 new warehouses in this country over the first three years of the agreement, offering Kroger customers what other grocers have failed to provide: the ability to order home-delivered food with just a few taps of their iPads. According to Ocado, the company’s customers really do use the platform for heavy-duty weekly shopping, spending an average of £107 per order (that’s $140 to you).