E-Grocery Growing Pains? How Automation Provides A Cure
In 2020, as the COVID-19 pandemic emerged and spread globally, tens of millions of U.S. consumers tried online grocery shoppers for the first time — and liked it. According to eMarketer, “Online grocery sales grew 54.0% in 2020 to reach $95.82 billion. That propelled it to a 12.0% share of total US ecommerce sales and 7.4% of all grocery sales.”
While that might sound like music to grocers’ ears, what with the consistently tight margins faced within that industry, in practice brick-and-mortar store aisles became jammed with proxy shoppers. Those included employees working for the retailer and pushing heavy picking carts around to fill multiple customers’ orders by picking directly from the shelves, as well as third-party shoppers from Instacart and Shipt. In-store shoppers — who found themselves impeded by the additional traffic and with fewer items on the shelves to choose from — quickly became frustrated.
Grocers have begun to adopt a new strategy designed to keep both customer segments happy: the micro-fulfillment center (MFC). A recent article in MHI Solutions magazine, “Automation Can Alleviate Growing Pains in E-Grocery Segment,” produced by MHI’s Solutions Community, explored how grocery retailers are applying this solution as a means to serve both categories of customers’ needs in a rapidly changing environment while formulating a more flexible strategy that can accommodate an unpredictable future.
MFCs typically encompass 8,000 to 10,000 square feet and utilize goods-to-person automated technology, typically based on an automated storage and retrieval system (ASRS). Some also leverage robotics as part of the solution. Whereas the typical grocery order might require a store employee to visit multiple aisles within a supermarket to pick all the items, a goods-to-person system presents totes of items to a picker who remains in one place at a workstation. This both maximizes throughput while eliminating in-store traffic.
The goods-to-person systems are often capable of supplying 70% of the items needed for an order; the remaining 30% are often produce, refrigerated, frozen, or large, bulky items that turnover rapidly or of a size that require manual picking.
Some MFCs are being constructed in close proximity — or even adjacent — to a retail outlet. Others are deployed in more of a hub-and-spoke model, with a centralized MFC that serves multiple stores by delivering pre-picked customer orders for in-store or curbside pickup. Some MFCs are strategically placed to serve urban areas with direct-to-home deliveries.
For more details about how automated MFCs are helping grocers tackle the online shopping market, the full article can be found here.
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