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Microfulfillment

Ultra-Fast, Hyperlocal Order Fulfillment

As online shoppers increasingly demand same-day delivery or pick up, retailers are increasingly filling orders from store locations in the customer's own neighborhood. But crowding store aisles with workers picking items for online orders is not only labor intensive, it also detracts from the in-store buying experience. Retailers need faster, more efficient order fulfillment methods in order to provide same-day service and still profit.

One possible solution is microfulfillment. Microfulfillment seeks to minimize travel time and cost, increase labor efficiency, and ultimately speed up order fulfillment using dense, flexible centralized storage to fulfill online orders from store and fulfillment locations close to customers. With microfulfillment, retailers can provide customers with the convenience of online buying with ultra-fast fulfillment via pick up or delivery in just a few hours.

 

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AutoStore-microfulfillment-graphic

What is Microfulfillment?

Originating in the grocery sector, microfulfillment is a strategy for retailers to fill online orders from existing retail stores or "dark stores" located near the customer, with the goal of minimizing shipping and labor costs while meeting customer demand for fast order fulfillment. Instead of the labor-intensive approach of workers walking up and down aisles to fill online customer orders, a centralized storage and picking location is created where a majority of orders can be filled, increasing picking efficiency and fulfillment speed. 

While many illustrations depict an automated order fulfillment system in the front of the store with customers walking up to retrieve their filled orders, these microfulfillment centers can also be located in the back warehouse area and accessible only to employees, or even in separate microfulfillment centers or dark stores. 

 
Microfulfillment Order picking

Microfulfillment Strategies

While microfulfillment is mainly used to describe solutions in existing retail stores, there are other related fulfillment strategies that are also worth considering.

In-Store
Microfulfillment centers are created inside existing retail space to help quickly and efficiently fill both online and in-store orders that are either picked up in-store, curbside or delivered to the customer. Caveats to the in-store microfulfillment strategy include taking up valuable space inside already constrained retail stores, and the cost of installing microfulfillment centers in multiple retail locations. 

Dark Stores
Empty storefronts are used as small fulfillment centers that fill online orders and can even service local retail locations. These "dark stores" are not open to the public. Orders filled can be picked up curbside, dropped off at retail locations for pick up, or delivered directly to customers. One dark store could potentially service several existing retail locations, which greatly reduces the space and cost issues involved with in-store microfulfillment. These dark stores can be formatted utilizing lower cost, semi-automation, such as Automated Mobile Robots and automated sortation technologies to aid manual picking efforts, or be fitted for high-automation goods-to-person systems.

Metro Ecommerce Centers (MECs)
Small fulfillment centers are created in dense urban or metropolitan areas to serve local ecommerce customers. Orders are delivered or shipped to customers directly.

 

 
In-Store Microfulfillment Using AutoStore

Considerations for Microfulfillment

Online Order Volume
Store locations that are considering microfulfillment need to generate enough online sales to justify the cost. Without sufficient order volume, the savings from reducing labor costs and increasing efficiency will not offset the cost of implementation. 

Space
For existing stores, there must be space available to accommodate a microfulfillment system, either through renovation or expansion. In-store microfulfillment automation is designed to work in small, back-of-store footprints with low clearance heights. Dark stores require available retail space that meets the size and cost requirements in the area where demand exists. 

Final Mile Costs
Because microfulfillment is not a one-size-fits-all solution, it is vital to explore multiple alternatives to ensure an acceptable ROI. Whether orders are picked up in store, shipped, or delivered to their door by a third-party service will all have an impact. Reducing final mile cost is generally a major positive contributor to ROI. All of these variables should be explored before deciding on microfulfillment. 

 
Goods-to-Person Picking Improves Efficiency


Read More About Microfulfillment

Microfulfillment Part 1: What is Microfulfillment?

Microfulfillment Part 2: Pros and Cons


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