Amazon is ramping up its automation efforts in the supermarket sector by collaborating with Fulfil, a startup that recently emerged from stealth mode and is backed by Khosla Ventures. This partnership was revealed by sources familiar with the matter. Recently, Amazon announced a pilot program at a Whole Foods Market in a Philadelphia suburb, integrating a micro-fulfillment center into the store. This innovative setup will enable customers to purchase everyday essentials not typically available at the organic grocery chain.

The new facility is powered by Fulfil's warehouse automation technology, which is designed to streamline operations for grocers and retailers. Fulfil, a San Francisco-based company, specializes in creating robotic systems that can significantly enhance efficiency. This information was confirmed by an insider who requested anonymity due to the confidential nature of the project.

At a recent press event near an Amazon warehouse in Nashville, Tennessee, Anand Varadarajan, who oversees the product and technology teams for Amazon's global grocery business, showcased a video demonstrating Fulfil's technology in action. The video depicted robots retrieving items such as soy sauce, canned pineapple, and coffee pods from shelves and then passing them to other robots that equip grocery bags. Although Fulfil's technology was not explicitly mentioned in the video, the system appeared to match the demonstration on Fulfil's website.

Amazon has chosen not to comment on the use of Fulfil's technology, stating that they invest in a variety of technologies and robotics, both in-house and from third-party partners, to enhance their operational networks. Fulfil's CEO, Mir Aamir, has also declined to comment on the matter.

Fulfil first came into the public eye in February 2023, when it announced that it had raised $60 million in a funding round led by Eclipse Ventures, with Khosla Ventures and DCVC also participating. Before partnering with Amazon, Fulfil was testing its technology with Lucky, a California-based retailer owned by regional grocer Save Mart, which is also a partner for Amazon's grocery delivery service.

Job postings on Fulfil's website suggest that the company is currently hiring engineers and factory operators in Plymouth Meeting, Pennsylvania, which is the location of the Whole Foods store where Amazon is testing its technology. Amazon anticipates that the facility will be up and running within the next year, as stated by Tony Hoggett, who leads Amazon's global grocery business, in a recent blog post.

Fulfil's technology will allow shoppers to purchase staples from brands that are not traditionally stocked at Whole Foods. Whole Foods has long maintained a "No List" of hundreds of ingredients that are prohibited from being used in any food it sells. This has meant that customers seeking products such as Coca-Cola and Kellogg's cereals have been unable to find them on the shelves of Whole Foods, which Amazon acquired in 2017 for $13.7 billion.

The system being tested in Plymouth Meeting will enable customers to order items from Amazon's website and its online grocery service, Amazon Fresh, while they are shopping at Whole Foods. They will be able to pick up their online purchases in the store as they check out. A small automated warehouse will be attached to the Whole Foods store, where robots will retrieve and transport items such as socks, soda bottles, or tennis rackets, and place them into bags for customers to pick up.

Hoggett explained in his blog post that Amazon's goal is to "eliminate those extra trips" that shoppers often take to other grocery stores. According to an April study by market research firm Drive Research, the average American shops at two different grocery stores per week, either to maximize cost savings, access a wider range of products, or take advantage of different promotions.

Sales growth in Amazon's physical stores division, which includes Whole Foods and Fresh, has been stuck in the single digits for the past seven quarters. The integration of Fulfil's technology and the pilot program at the Whole Foods location in Philadelphia represent Amazon's strategic efforts to boost efficiency and customer satisfaction, potentially leading to increased sales and a more competitive stance in the grocery market.