Danish global shipping and logistics giant A.P Moller-Maersk is jumping into ecommerce fulfillment, opening a micro fulfillment center in Dallas powered by technology from Israeli firm Fabric that will initially serve one client in health and wellness but could be expanded to a multi-tenant operation. The 38,000-square-foot facility will utilize Fabric’s automated storage and retrieval (AS/RS).
Israeli startup 1MRobotics, just 18 months old, is leapfrogging micro fulfillment to nano fulfillment, using automated robotic systems within containers that can be dropped in suburban locations or fit into an urban building, fulfilling orders in lights-out fashion for delivery in as little as 15 minutes.
With labor costs increasing, parcel shipping becoming more expensive and carriers struggling to support peak volumes, companies are implementing new strategies with micro fulfillment centers or MFCs. The concept is not new and they’re not for everyone, but it’s worth assessing how it might fit into your fulfillment network strategy.
Ahold Delhaize, the Netherlands-based grocery conglomerate that owns Stop & Shop, Giant and other U.S. chains, plans to pilot micro-fulfillment technology at one of Giant’s fulfillment centers in Philadelphia as it competes with Kroger’s e-fulfillment model using tech partner Ocado.
French robotics firm Exotec, which lists Japanese fast-fashion retailer Uniqlo as a major client, has raised $90 million to power its global growth in ecommerce fulfillment. Founded in 2015, Exotec is built on a goods-to-person model with its Skypod bots which uses laser guidance to navigate a fulfillment center.
Micro fulfillment centers are all the rage in e-grocery – small, highly automated systems that use robotics to fulfill online orders in 1 to 2 minutes. Neil Stern of McMillonDoolittle talks all things MFC in this latest MCM CommerceChat podcast. He’ll also lead an MFC session at Ecommerce Operations Summit (4/14-16, Orlando).
Evolv Ventures, the investment arm of CPG giant Kraft Heinz, has joined a $110 million funding round in automation and robotics firm Fabric with an undisclosed investment, keeping an eye on ways to tap into Fabric’s expertise and capabilities in ecommerce and applying it to the B2B world.
Amazon is reportedly using a micro-fulfillment center solution from Dematic at its first grocery store not named Whole Foods outside Los Angeles, sending a loud signal to the rest of the market that an MFC capability is critical to success and maintaining market share in the red-hot e-grocery sector.
E-grocery penetration in the U.S. reached 4.5% of the overall food/beverage market in 2019, according to figures from Deutsche Bank cited by e-fulfillment technology provider Fabric, after hovering around 2% for years. It’s expected to exceed 10% by 2024 and hit 12% the following year.
Walmart is expanding its fleet of shelf-scanning robots, adding 650 this year for a total of 1,000 as it looks to address nettlesome grocery out-of-stock issues and battle competitors with the technology like Ahold Delhaize’s Stop & Shop, Giant Eagle and Schnuck’s. It has also launched a micro fulfillment center at a New Hampshire store.