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Micro-fulfillment: When customer loyalty and satisfaction are on the line

Distribution e-commerce micro-fulfillment warehouse

They say good things come in small packages, and now warehouses are no exception. I’m referring, of course, to micro-fulfillment—a growing trend that’s helping retailers of all kinds meet consumer demands for fast, convenient, and low-cost order fulfillment.

What exactly are micro-fulfillment centers (MFCs)? They’re essentially highly automated “mini”  warehouses that take up just 3,000 to 10,000 square feet, a fraction of a traditional facility’s size. Whereas large-scale distribution centers are usually built on the outskirts of cities, MFCs can be strategically located within dense urban regions where demand is high. In fact, these pint-sized powerhouses are compact enough to fit into tight, stand-alone industrial buildings, or even squeeze into the backs of brick-and-mortar stores.

On top of that, it’s also much faster to get them up and running. MFCs can be set up, with automation, in a matter of just weeks.

What does this mean for customers?

The modern consumer expects a quick and easy shopping experience, with e-commerce giants setting the bar high. Just think about Amazon’s free Prime shipping and same-day, next-day and (in some cases) two-hour delivery options. It makes five-to-seven-day shipping feel like a lifetime, doesn’t it? It’s here that retailers can leverage MFCs to stay competitive, offering customers:

1. Convenience Online orders, curbside pickups, and home deliveries are surging—their popularity driven in part by the pandemic and likely here to stay. Located within or beside brick-and mortar stores, MFCs enable retailers to offer these convenient options without having to expand their workforce. When a customer places an online grocery order for pickup, for instance, an employee no longer needs to spend an hour pulling the appropriate products from the store shelves. Rather, the required goods are automatically picked from inventory in the MFC, and the order will be ready for the customer in practically no time at all.

2. Faster fulfillment The faster customers get their orders, the happier (and more likely to return) they’ll be. With an automated MFC, the fulfillment process can begin the moment an order is placed. Robotic equipment picks the required products much faster than humanly possible, with a high level of order accuracy, keeping more orders flowing rapidly out the door.

And with inventory located so close to the end-customer, the time involved in last-mile delivery is minimal. This is particularly crucial for goods that need to maintain freshness, like bakery products and produce. They can be on consumers’ doorsteps quicker once ordered, maintaining a high level of quality.

3. Cost savings Along with reducing the time required for last-mile delivery, retailers can also significantly reduce the costs—which are typically a large portion of the overall cost of fulfillment. And with fulfillment more cost-effective, retailers can pass those savings on to the end- customer, possibly in the form of free shipping or lower markups on goods.

Now that ecommerce allows customers to order practically anything from anywhere in the world, it’s more important than ever for retailers to make investments in customer satisfaction and loyalty. And a micro-level investment in MFCs can mean macro-level benefits that keep consumers coming back again and again.

Author Derek Rickard

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