November 8, 2019
As technology continues advancing and online shopping becomes more standardized, the grocery industry is sitting up and taking notice. Cushman & Wakefield’s Chris Copenhaver, Ken Reiff and Ben Conwell, in the report “The Future of Grocery Fulfillment,” point out that grocery distributors that were once “hesitant to try new technology and risk disrupting the supply chain” are now incorporating technology and other innovations to meet the demand for direct-to-consumer grocery supply chains.
One of the new tools in the upgraded supply chain is the micro-fulfillment center (MFC). These small fulfillment centers exist in heavily populated areas, including inside of grocery store stack rooms. The automated systems mean a grocery order can be picked and packed, and be ready for delivery or pick-up in a matter of minutes.
In addition to the MFCs, CNN reported that Walmart, Albertsons, Stop & Shop, Meijer and Hy-Vee, among others, are also testing “dark stores.” These are locations that have a look similar to supermarkets, but that are closed to customers. The sole purpose of these “dark stores” is to prepare pickup orders and make deliveries.
Dark stores are popping up because of the growth in online grocery orders. For example, when Walmart workers attempt to fulfill online orders, this can lead to congested aisles in its own stores during peak shopping times. The dark store concept is intended to relieve congestion and improve time to customer.
One such dark store prototype is Walmart Pickup Point, a 40,000-square-foot center at a former Dominick’s grocery in the suburban Chicago village of Lincolnwood, IL. Customers drive up to the site, and a Walmart worker loads up the trunk with their order. The location also means Walmart can deliver, as well. Stop & Shop also has a 40,000-square-foot dark store in Whitman, MA, while Hy-Vee is testing four dark stores.
Another recent development is a fully-automated, 100% online supermarket, which is being operated by Ocado, a British company. Ocado began making deliveries online in 2002, and has announced a partnership with Kroger. The partnership includes a 335,000-square-foot automated grocery facility in Ohio, which is the first of 20 similar warehouses the companies plan to open during the next two years. The planned facilities will contain cutting-edge automation that can assemble an order of 50 items in just minutes.
Pictured: Walmart’s Pickup Point in Lincolnwood, IL
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