Perhaps you’ve heard of the Tiny House Movement, where people of all ages are downsizing the space they live in to simplify their existence and to live with less. So in a recent Fast Company article called, “What if your grocery orders were prepared in a tiny robot warehouse?“, I couldn’t help but visualize tiny robots with tiny shopping carts wheeling up and down tiny aisles in a tiny grocery store.
While that is not what this article is about, it did touch on the theme of “downsizing” of grocery store fulfillment centers. Consumers could place grocery orders at their local supermarket, which would house a miniature robotic warehouse in which the food orders would be picked and packed and ready in as little as thirty minutes. These mini-fulfillment centers are heavily automated to quickly assemble orders for either delivery or customer pickup.
Robots with shuttle bins of merchandise will be sent to human order packers tasked with assembling the items in the bins to fill customer orders. Since the robots are created to handle smaller items, humans can handle bulky items by hand. This concept is more efficient than the typical process, where order pickers fill baskets of items for an order from the same grocery shelves as in-store shoppers. The average order is assembled in less than 15 minutes typically.
Mini-fulfillment centers are easier to build than a traditional full-scale warehouse. Shelves and the robots can be installed in less than 3 months, while big distribution centers can take years to complete. Costs for equipment is much lower, too, while material handling equipment for a larger DC can be in the tens of millions.
Since the mini-fulfillment centers are often located within or next to grocery stores, the final mile is taken care of. Consumers can simply pick up their orders at the store. If customers opt-in for home delivery, delivery areas are typically within a few miles. This new “tiny movement” is very cost effective for grocers, helping them to lower cost to serve, streamline operations and improve the customer experience.
Is this the future of the grocery store?
The grocery store is changing. With thin margins, high fixed costs, changing consumer tastes and growing competition from big box retailers, the grocery industry has to innovate in order to be more profitable. Shopping experiences have changed as more shoppers buy groceries online with various delivery options, ranging from pick-up in store, lock boxes or other designations, or choosing same day delivery to home.
Grocery stores are using innovative transportation management processes to lower costs and streamline logistics for inbound and outbound deliveries. Since many food products have short expiration dates, getting these products to the consumer long before expiration helps to grow profits.
Check out the Kuebix Inbound Management white paper to better understand how to manage costs within inbound shipping.