The Wall Street Journal this morning has a piece about the growth of micro-fulfillment facilities. An excerpt:
"The sites are far smaller than the typical sprawling, labor-intensive distribution centers in remote industrial parks, and they are becoming a new focus for retailers adjusting to the dizzying changes in consumer markets. Some merchants had been testing compact fulfillment sites in recent years, but the rush to online shopping during the coronavirus pandemic is accelerating moves toward space-saving, automation-powered warehouses.
"By squeezing those operations into urban warehouses and the backs of stores, businesses hope to pare delivery times so online orders reach their destinations in hours, not days."
Among the retailers testing various configurations of micro-fulfillment are Walmart, Albertsons, H-E-B, and even Nordstrom - all of which have been persuaded that micro-fulfillment is the answer to surging e-commerce demand. The Journal writes that "the market for automated grocery micro-fulfillment centers is estimated to be worth $1.2 billion by 2024, according to market-research firm Interact Analysis."
- KC's View:
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Seems to me that this is just one part - albeit an important part - of the reconfiguring of American retail, especially in the food industry, where traditional store footprints need to be put aside so that components such as e-commerce (delivery and click-and-collect), ghost kitchens, dark stores and micro-fulfillment operations can be included. They'll be vitally important for any retail future, and have to be part of a fundamental rethinking of how physical space should be allocated and used.
