Is micro-fulfillment tech living up to the hype?
Prior to the pandemic, micro-fulfillment companies like Fabric, Takeoff Technologies and AutoStore, along with some industry experts, touted scaled-down automation systems as must-have technology for grocers facing a future of escalating e-commerce sales.
That future arrived early — and all at once — in 2020, when the global health crisis hit and pressed grocery e-commerce to its limit. But the expected rapid expansion by grocers of MFC technology, which seems made for the moment with its focus on quickly and efficiently assembling online orders in tight spaces, has not materialized at the level many expected.
Instead of rapid-fire partnership announcements and scale-ups with retailers, rollouts have come in dribs and drabs, with retailers seeming to take a cautious approach to implementing the systems in their stores and in dedicated facilities.
"There's a lot of misinformation out there. And I think for the retailers, it's very difficult to navigate this minefield because they don't really know enough about the technology and the automation to be able to accurately say whether or not they should go one way or another," said Marc Wulfraat, a supply chain expert and president of MWPVL International, who frequently consults with retailers on MFC technology.
There are some exceptions, most notably Walmart, which in January announced it would test micro-fulfillment technology at dozens of stores, covering a range of providers and configurations. Albertsons has enthusiastically endorsed MFCs, having forged a commercial agreement with Takeoff Technologies in 2019. The company opened its third MFC in April and plans to open six more in 2021, for a total of nine, President and CEO Vivek Sankaran said during the company's fourth-quarter earnings call.
