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By: Steven Duffy
Microfulfillment and how it’s already transforming grocery as we know it.
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 their brand infuses into an experience that entices customers to try this new normal, return and tell a friend.
Early adopters are finding that by leveraging the platform offered by experts in microfulfillment, like Takeoff Technologies, 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 in reconsideration. 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.
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.
At a conference I attended last week on retail transformation called Shoptalk 2019, Takeoff Technologies cofounders, Max Pedró and José V. Aguerrevere gave attendees a glimpse into just this.
Takeoff Technologies presented a solution to this the last mile quandary they call “Hyperlocal Automation.” It combines the benefits of local geography and centralized automation to negate the added time and labor that is in use for the fulfillment of online orders. Their small building footprint benefits from a higher cube storage capacity. Having order fulfillment occur closer to the customer, by leveraging automation, drives order processing speed, which in turn reduces labor costs and inefficiencies.
Pedró and Aguerrevere also shared snapshots of historical supermarket transformation in their presentation, beginning in 1916 with the establishment of the original grocery store format by (Piggly Wiggly). Supermarkets were created to offer an “entire basket under one roof” while offering grocery at low margins. Their concept is a return to those grocery roots, with the addition of technological advancements relevant to today’s grocers. Takeoff Technologies platform provides a view into what the store of the future will likely encompass.
What is Takeoff Technologies?
Takeoff Technologies platform is designed to leverage fulfillment technology as a replacement for online grocery ordering, now selected by “hand picking” from a store. E-commerce orders today are personally shopped, and then either delivered or part of a “click & collect” picked up by consumers at the store. As a leader in grocery fulfillment they are driving a transformation of the store format onto the next innovation change curve.
Their process involves robotic trollies within a micro-warehouse, collecting groceries at a rate up to 15 times faster typically seen in stores today. Once the orders are robotically selected, pieces are sent to a sorting area in bins and then bagged for distribution to the customer. The entire process occurs at a fraction of the speed as hand picking.
Why will microfulfillment be the new normal?
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.