What is Happening?

With online grocery ordering and home delivery gaining traction during the Coronavirus pandemic, the trend towards retailers using Micro-fulfilment has accelerated.

Typically taking up between 3,000 and 10,000 ft², Micro-fulfilment Centres (MFCs) usesmall, highly-automated storage facilities near the end customer to reduce cost and delivery time.

These centrescan be built into stores or as stand-alone facilities to service a cluster of locations. Due to their compact design MFC's help to save on expensive real-estate and can be located at the back of existing supermarkets, in garages or in parking lots.

Many grocers are already testing the technology and are investing in smaller warehouses as the best way to support their growing online order demand.

What Does it Mean?

As micro-fulfilment technology grows more efficient and cost-effective, it is likely to be adopted by other fast-growing e-commerce sectors, such as fashion, consumer goods, and health care.

Some experts view a potential opportunity for retail stores to shift further to becoming Micro-fulfilment centres themselves. This rationale is built on the basis that the move to online retail has forced more retailers to explore ways of repurposing their underperforming stores.