Online grocery delivery and pickup are not going away anytime soon. According to Tech Crunch, U.S. online grocery sales hit a record $7.2 billion in June, up nine percent since May, as families turn to online grocery pickup and delivery service to address their grocery needs.
However, if you don’t have the right systems in place, then online orders can be very inefficient and costly. This is where micro-fulfillment centers—compact automated fulfillment-centers that autonomously fulfill online orders—can help out. Here are some reasons why grocery retailers are moving toward this model and how to build a micro-fulfillment center (MFC) that works for your needs.
WHAT IS A MICRO-FULFILLMENT CENTER
As the name suggests, micro-fulfillment centers have significantly smaller sizes than other distribution facilities. As of 2017, the average warehouse size is around 180,000 square feet. However, an MFC can be as small as 5,000 feet, though there is a broad range of sizes.
MFCs use shuttle robots, automated shelving systems or a combination of the two to fulfill online orders quickly and efficiently. As consumer expectations around convenience continue to rise and competition intensifies, these facilities will benefit your store.
Recently, national grocers, including Walmart and Albertsons, have been exploring micro-fulfillment as a faster and more effective solution to grocery e-commerce. In the case of Walmart, its MFC in Salem, N.H., has robots that pick food items and deliver it to human associates who bag and deliver the orders.
BUILD A SEPARATE LOCATION
According to CommonSense Robots, the optimal solution to meet customer demand for online groceries is by building a network of micro-fulfillment centers in denser populated areas.
This means, if you are a larger grocery chain, the best option for online grocery fulfillment is to build one or more smaller, off-site facilities placed hyper-locally so that you can deliver groceries locally with speed. For example, renovating urban real estate, often inexpensive and left empty by the structural change in the industry, could work as an MFC.
Wakefern Food Corp., the grocery cooperative that operates ShopRite, follows this model. In 2019, it built a 10,000 square-foot MFC in Clifton, N.J., that serves select stores surrounding the area. The automated system processes orders of up to 60 items in minutes and delivers it to a Shoprite fulfillment employee who prepares the orders for customers.
A rurally located grocery store would be better off building one larger MFC that serves a larger geographic area rather than many smaller ones. By having one centrally placed, high-capacity facility, communities with smaller population sizes can be served via online groceries as well.
RENOVATE CURRENT SPACE
In addition to building an externally located MFC, you also can add one to your current store. There are a few options to do this.
One is to incorporate the MFC into your current floor space. Chances are, there is underutilized space in your store that can be used more profitably. To unlock that floor space for use as an MFC, stack goods strategically, take advantage of vertical space and reserve products to be stored into the MFC. Once that space is opened up, you can build an in-store MFC by building a few walls to separate it from the rest of the store.
Alternatively, you can build an MFC as an add-on in the back of the store to avoid reconfiguring your existing layout. For example, a grocer in the San Francisco Bay area built an MFC in the back of two of their supermarkets, making it so the brick-and-mortar store had the best of both worlds: proximity to customers and proximity to the automation of a large warehouse.
FOR MORE INFORMATION
FoxArneson specializes in both design and building services for grocery, warehouse and distribution centers.