As Omni-Channel becomes standard across retail, the inevitable transition to microfulfillment as an industry standard leaves grocer’s pondering how this paradigm shift will influence retailers go-to-market positioning moving forward. They must take on the challenge of determining how to infuse their brand into an experience that entices customers to try, what could be a “new normal”.
Early adopters are finding that by leveraging one of the many platforms offered by experts in microfulfillment, they have a leg up on their competitors who are struggling with how to automate delivery of fresh food quickly and economically. How we view the necessity for a large format neighborhood grocery and the need for grocery-anchored centers is now under consideration. A renewed appetite to shop will become much more experiential based and be driven by local and fresh. The use of microfulfillment, whether in the grocery box or as a standalone facility are appearing more regularly. A recent article in Supermarket News, ‘Fulfillment, assortment key to growth of online grocery food sales‘, echoed that sentiment,
“We’re going to see a major shift to online and omnichannel over the next few years with edible grocery,” said Violetta Volovich, associate analyst and report author for Edge by Ascential. “The barriers to adoption and growth in this sector are coming down, and retailers are investing heavily in technology, supply chain and partnerships that will make for an easy, seamless customer experience.”
The question remains, how are grocers able to best implement the technology that is, arguably a part of the retail landscape moving forward. The answer…microfulfillment.
What is microfulfillment?
The appetite for convenience and saving time has driven the initial phases of grocery e-commerce adoption. However, barriers to greater adoption beyond the 2+% vs. higher 10% for other e-commerce in the US is limited by price and speed. Microfulfillment is designed to knock down these remaining barriers of adoption leading to a wholesale reformatting of the store design and logistics of grocery shopping. This a central issue to many retailers’ hesitation to dive head first into automation–the last mile.
Today’s supermarket, while advances in various systems have been incremental, it still is based upon a shopping model that has remained virtually unchanged. Convenience and price have been the two elements that have held the transformation of grocery formats static for more than a century. The current e-commerce process’ reliance on hand picking is essentially adding labor (cost), is slow and inefficient, yet delivers on the promise of convenience in exchange for an added cost. That’s a value proposition that cannot be overlooked and why microfulfillment’s ability to lessen the time component in the current food distribution pipeline is a win-win for the food industry and the consumer.
“With the way eCommerce has become infused in everyday life, grocers need solutions that leverage their stores in a meaningful way. Through thoughtful incorporation of microfulfillment logistics, grocers can offer customers more control of how and when they shop. This end-to-end solution provides grocers the flexibility to meet their customers’ needs within the existing store network, yet still be mindful of budgetary concerns,” said Steven Duffy, Senior Vice President at Cuhaci & Peterson.
Cuhaci & Peterson got the opportunity to explore this concept in-depth in preparation for the 2019 Groceryshop conference through a collaboration with locai and PULSE Integration. The group not only concepted out how this future store would function through the incorporation of omni-channel options, robotics and automation, they brought the vision to life through virtual reality. The concept, named the Omni-Store, was announced in early September. (view press release)
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What is the Omni-Store?
Using locai’s digital commerce platform, customers can shop their grocer’s aisles using in-store kiosks, mobile phones or their desktops and have their groceries picked and packed via the AutoStore system within minutes. This gives shoppers the ability to place their order in the store, where they may choose to enjoy experiencing a grocer’s prepared food service or shop for other items they prefer to handle on their own. The AutoStore system will also serve as the fulfillment hub for online shoppers in the area giving the grocer a more profitable fulfillment solution while improving inventory control and reducing congestion in the store aisles.
In addition to optimizing customer experience, locai’s digital commerce platform integrated with the AutoStore System provides both customers and grocers a real time view of inventory into the AutoStore System; this helps to alleviate instances of missed expectations when a customer places an order online for an item fulfilled by AutoStore. Additionally, locai’s PowerPick application gives grocers tools for controlling their inventory, as well as offering operators an interface for all aspects of their fulfillment operations.
Our firm took the concept one step further. Our design team brought to life, what the locai and AutoStore platforms could look like in-store, in a series of virtual walkthroughs that Groceryshop attendees experienced while visiting the booth shared by locia, PULSE and C&P. The concept and design can be adapted to seamlessly integrate into any grocer’s brand to give shoppers an enhanced shopping experience, as well as the previously mentioned efficiencies.
Learn more about the Omni-Store, HERE.