As people avoid visiting crowded grocery stores to protect themselves from Covid19, many of them switch to online grocery stores to shop for groceries. In fact, many types of research show that 37% of shoppers have purchased groceries online in the last year. It is estimated that 35 million new shoppers have shopped for groceries. As a result, online grocery stores face new challenges to fulfill the demands. Here the micro-fulfillment center comes in. They can redefine the online grocery shopping experience.
In this helpful guide, we will let you know inside out about Micro-fulfillment, including how to reduce the online grocery fulfillment costs by installing the micro-fulfillment. Let’s start with what exactly is a Micro-fulfillment center.
What is Micro-fulfillment?
A micro-fulfillment center is an automated warehouse used to quickly and efficiently fulfill online orders. This is operated by the software and robotics that work together to make it possible to process grocery orders within a few minutes. The micro-fulfillment centers can process the online grocery orders in less than 15 minutes.
They are smaller in size than the standard fulfillment centers. They can be built within a few thousand square feet, making it perfect for installing in high-density areas of the city where you don’t find enough space. As the Micro-fulfillment centers are compact and set-up in small spaces, they bring the product closer to the customers. In short, you can set-up micro-fulfillment centers at the places where a majority of your customers reside. This way, they will get their online grocery orders faster, and you will manage to cut-down the last-mile delivery costs.
As the online grocery business is considered a less profit margin business idea, lowering the last-mile delivery costs seems the only way to increase the profit margin. And this is possible by setting-up the micro-fulfillment centers.
Retail giants like Amazon have increased customer expectations. Customers nowadays expect free and instant shipping, which is creating massive pressure on other companies to improve their online order delivery services. The best way to get close to fast delivery and give free shipping is to bring the product closer to the customers.
How does a Micro-fulfillment center work?
As the online grocery comes in, pickers working in micro-fulfillment centers collect all items and transport them back to the main grocery store. Even in many cases, the customers don’t need to step up to their cars. Employee directly approaches the customers and gives their orders. Retail giants like Amazon and Walmart offer both delivery and in-store pick-up with micro-fulfillment centers.
Setting-up micro-fulfillment centers are an expensive affair, but it will streamline the online grocery delivery process once placed. They can stock more groceries than traditional grocery stores and deliver faster.
The micro-fulfillment will also reduce the last-mile delivery costs and remove all obstacles associated with it. By setting-up the micro-fulfillment centers in dense urban areas, you basically minimize the distance between goods and customers. This way, you reduce the margin of errors and ensure the customers get their orders on time. Micro-fulfillment centers have small sizes, and this is because they are more affordable than the standard micro-fulfillment centers.
Some advantages of micro-fulfillment centers;
• Reduce last-mile delivery costs- As the micro-fulfillment can be set-up in close proximity to the customers, transportation costs decrease. Consequently, the last-mile delivery costs or online grocery fulfillment costs also reduce.
• Customer gets product faster- Off-cause when the micro-fulfillment is set-up in urban areas where most customers reside, online grocery will be delivered faster the same day, or even hours.
• Easy to set-up- Micro-fulfillment centers are easy to set-up due to the pre-engineered approach of automation. Many folks ask how to start a micro-fulfillment center. Well, there are many companies those set-up micro-fulfillment centers for retailers. This is why they are easier and faster to set-up.
• Utilize existing sore footprints- It does not require to set-up a new warehouse. Instead, you can use the existing store and transport it into a new micro-fulfillment center. It does not only save money but time and effort as well.
The future of retail with micro-fulfillment centers
The trends are moving towards automation. The introduction of micro-fulfillment centers and robotics technology is automating the entire online grocery delivery process. These technologies will play a significant role in the online grocery business’s future and help reduce online grocery fulfillment costs.
The highly advanced software paired with a well-organized supply chain will make ordering and picking up groceries convenient and faster. Grocery stores will meet evolving customers’ demands and stay competitive. The well-known business coach Brittain Ladd has discussed the impact of micro-fulfillment centers in the retail business in his latest article.