Micro-fulfillment is on the verge of becoming mainstream in a few years time.
The trend of putting small fulfillment centers in urban centers continues to build steam as as end-consumers want their products faster.
The enabling technology for this concept is rapidly developing and includes everything from fully automated robotics warehouses for grocery to drone delivery for one hour delivery.
The technologies being developed around micro-fulfillment are also at the forefront of the decentralized fulfillment movement.
“The premise behind micro-fulfillment is simple enough: Improve the speed and efficiency of online order fulfillment while also relieving pressure on store inventory. The execution, however, is very complex, requiring a high volume of e-commerce orders to become economically viable. Time will tell whether MFCs offer long-term savings and speed of fulfillment that justify their hefty upfront cost.”
Is Micro-Fulfillment the Future of Ecommerce Fulfillment?
As TotalRetail notes, "...while two-day shipping started out as a luxury, it’s quickly become the industry standard for online ordering that modern consumers now expect and demand...This calls for fundamentally changing how they [retailers] think about technology and space with a future-forward approach to fulfillment."
Convenience and quick delivery windows are the perceived drivers of the micro-fulfillment trend.
Consumer demand and the competitive landscape create the pressure on businesses to make micro-fulfillment a reality.
Already there are many companies competing to get the micro-fulfillment model dialed-in.
- TakeOff Technologies focused on grocery delivery and promises to "bridge the gap between retail and technology."
- Fabric, formerly CommonSense Robotics, promises on-demand fast fulfillment for grocery, ecommerce merchandise, and B2B stock replenishment.
- Aersys Inc., a hardware company aiming to disrupt the world with automated delivery technology from drones to rovers on the sidewalk.
- Dematic, unveiled its entry into micro-fulfilment as an enabler of dark stores via their automation technology.
Add to the above, patents filed by Amazon pave the way for the ecommerce giant's entry into the micro-fulfillment space.
Thus we have the ingredients for many delivery options disrupting last mile logistics for ecommerce in the years ahead.
“While concepts like freight shipping, warehousing, micro-fulfillment may lack flashiness, they are unequivocally important — ultimately representing a retailer or brand’s ability to procure, produce, and distribute products to consumers.”
Micro-fulfillment Is a Solution to a Problem
The flashy technology being rolled out by numerous companies to solve the last mile problem which has persisted in logistics industry for ages is yet to takeoff. Whether the above solutions redefine the last mile problem will still take time conclusively resolve.
A notable survey conducted in 2018 stated, "...micro-fulfillment is not likely coming to the majority of organizations by 2020."
And, it is now 2020. Is micro-fulfillment here for the majority? Not yet.
Though, Marc Wulfraat argues to the contrary in this talk and concludes: "Micro-fulfillment is not a fad - it is most-definitely a permanent market shift!"
No matter the outcome, keeping an eye on the trends taking place in the micro-fulfillment space is one of more exciting developments in the often unnewsworthy logistics industry.
As 2020 begins, let's settle with micro-fulfillment as a worthy trend to follow.
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