Throughout the pandemic, we’ve seen more retailers evolve to keep up with the demand of online orders from customers across the country. From additional curbside pickup locations to same day delivery options, retailers have rapidly adjusted. They are rolling out programs quickly and making improvements as they learn what’s working for each location and what isn’t.
More retailers are also adopting the use of micro-fulfillment centers (MFC) to increase efficiencies and decrease the time to delivery. In some cases, we’ve seen retailers expand their open, existing locations to add an automated MFC to help fulfill online orders for that location. Another option is to turn a dark store into an MFC.
Whether you’re looking to speed up delivery times to your customers in an area, or need help to fulfill the demand for online sales, there are plenty of benefits to adding MFCs to your fleet. There’s also a lot of things to watch out for and factors that may mean they aren’t right for your company today.
Learn more about how we can help add MFCs to your fleet.
Is adding an MFC right for you?
If you’re asking that question, the answer is maybe. While MFCs add efficiencies to your online orders, they’re also a pretty pricey investment. Even if they’re right for some cities and states you operate in, they likely won’t make sense for every region, or even metro area.
You’ll need to take a critical look at your online orders, how long it’s taking your customers to receive their orders, and look at any complaints that filter in about the online order process. Companies like Walmart, Albertsons, and Kroger have embraced adding more MFCs to their fleets over the next few years. They’ve seen an increase in online shopping and don’t anticipate that slowing down much.
MFCs, sometimes referred to as Local Fulfillment Centers, will help increase speeds for customers of multiple stores around the site. So, if you’re looking at your metrics thinking it doesn’t really make sense for this one location, but these 5 stores in this one city are struggling to keep up with online orders, you might be onto something and should look at how you can make that happen.
Converting a dark store to an MFC
Once you’ve decided to add an MFC to your fleet, you’re likely looking at the best place to locate it. Your stores are likely already located in centralized areas for your customers. In larger cities, they’re geographically distributed to serve even more of the population. As the population of the city changes and moves, where your stores need to be also changes.
If you’ve relocated stores across town, or even down the street, to keep up with the ever-changing retail landscape, you might have a location sitting dark in your fleet. It may be more economical to repurpose that existing dark space as an MFC to serve the stores in the area. Logistically this makes sense as you save the construction costs to build a whole new location. Sustainably it makes sense because you’re reusing what already exists. Now it’s just figuring out exactly what you have and how you’d need to change it to make it work.
Do you want to convert the entire space to an automated hub? Or do you want to split it and have half of it automated, while the other half has areas for employees to prepare orders for delivery? You’ll need accurate as-builts so you can decide on your strategy. If you’re looking at adding an automated portion to the location, you’ll definitely want to have the location scanned by a company that offers 3D laser scanning. This will help you get the most accurate information about how level the floor is and exactly how much space you have.
After you have accurate information on what you’re starting with, you can work with an automation and robotics consultant to develop a system that will work in the space you’ve chosen. Having worked extensively with a robotics and automation vendor, we’ll be the first to tell you, these projects take much more coordination between all of your consultant teams than for normal retail store projects.
What do you need to look out for?
If you haven’t chosen your vendor yet, you’ll want to make sure you choose one whose system is easily upgradable. We’re all familiar with just how fast our phones are outdated. You don’t want to end up with a system that’s good today but obsolete tomorrow and nearly impossible to upgrade.
The automated systems need incredibly precise environments to operate properly. That means you’ll need to pay special attention to how flat your floors are, exactly where lighting is, and if and how the existing fire suppression can accommodate this change. With all of the expensive equipment working in the automated portion of your MFC, you’ll want a fire suppression system that can effectively put out or contain a fire without killing the robots by flooding the entire space with water.
If you’ve decided to take over that dark store to create an MFC, you’ll also need to make sure your electrical system is upgraded. As you can imagine, a wall full of recharging robots will draw more power than a handful of checkout stands.
You also need to make sure you choose the right architect. Working with one who already has experience with MFCs will go a long way towards helping you stay on the right track. An architecture firm knowledgeable in MFCs will have already come across many of the issues you may run into along the way and will be able to help mitigate or even eliminate them before they cause too many problems with your timeline or budget.
Turning dark spaces into micro-fulfillment centers is something we expect to see more of, and they just may add the competitive edge you need to keep up with changing customer demands.