Smaller stores, Large Fulfilment: Grocery Store Edition
Grocery retailers are finding new ways to meet customer demands, specifically by embracing micro-fulfillment centers for online orders. Once the grocery retail industry made the transition from strictly brick and mortar to including e-commerce back in 2018, this changed the game for grocery retailers across all boards. [i]
“According to the report, retailers like Target, Amazon, Kroger and others have invested $28 billion in e-commerce in just the last 18 months.” [i]
“Of all the purchases made on an annual basis by consumers, food and groceries are purchased the most.” [i] With the current pandemic our world is facing, two tier retail structures are the new norms for all retail sectors. The two tiers are: those that sell essentials, and those that don’t. [iv] Retailers are being forced to find creative, innovative ways to stay in business as the ordered shelter in place carries on through the coming weeks. Retailers are using the internet in new and pioneering ways to get their customers the information, and more importantly the products that they need during this time. As much as we all enjoy shopping online for non-essentials like clothing, toys, etc. the more important question is this: as this shelter in place continues, how will essential retailers such as grocery stores ebb and flow to keep up with the demands of the CDC and also their customers? The answer is this: take your business online!
Image via https://www.forbes.com/sites/brittainladd/2019/02/01/crossing-the-rubicon-why-2018-was-the-point-of-no-return-for-online-grocery/#3ff0b8e54467
Big names like Amazon, Walmart, and Google are all stepping into the grocery sector of retail. Many grocery retailers’ biggest business endeavors are based on the way our world is turning: reducing in person interaction, increasing online presence. With that being said, how do grocery stores, who thrive on in-person interactions to continue business, keep up with the current retail trends? Grocers have turned to grocer fulfilment robotics in micro-fulfilment centers guesstimated to be around 10,000 sq. ft. in contrast to typical regional distribution centers sized around 60,000 sq. ft. [ii]
“U.S.-Israeli robotics startup Fabric, which builds automated micro-fulfillment centers for retail customers, is starting construction on its first U.S. grocery site this quarter.” [ii]
These micro-fulfilment systems can spit out up to 4,000 orders a week, while taking up a smaller amount of space in more urban areas. [ii] Given the current situation and the need for e-commerce grocery shopping, Takeoff Technologies, a company that provides technology solutions for robotic fulfilment is building automated fulfilment centers for a number of retailers including Albertsons, Loblaws, Sedano’s, and Shoprite. [iii]
“The demand for online grocery is up 80 percent to over 100 percent at our facilities,” says Curt Avallone, the Chief Business Officer of Takeoff Technologies [iii]
Avallone is saying that the average basket size per online order is up, averaging around $200 per “basket size” compared to the normal $150 before the Coronavirus outbreak. Fabric recently published a report which predicts that online grocery shopping in the U.S. could rise to 12% by the end of the year. [iv] Avallone also said that more grocers are turning to micro-fulfillment centers as they are anticipating more orders being online in the coming months. As the retail climate is changing rapidly with our current economy and situation, grocers are determined to not fall behind.
As the future of grocery changes and stores begin to adapt, Avallone says that for retailers to add a robotic fulfillment enter, Takeoff Technologies solutions cost $3 – $4 million and takes between 12 to 16 weeks to be operational. Studies show that 60% of US shoppers are scared to go into grocery stores, giving grocers all the more reason to push for online e-commerce fulfilment centers to meet the needs of their customers. Customer satisfaction and safety amidst COVID-19 are crucial pieces of the puzzle for retailers to remain profitable.
While the technology solutions are incredibly important for these new facilities, who is going to build them? Who will run all electrical work and maintain the facility? That’s where Rogers comes into play. With the immense amount of industry knowledge and experience on similar jobs in Distribution Centers around the country, our technicians have just what it takes to get the job done. Check out the work we’ve done on DCs across the country over on our website.