Micro-Fulfillment’s Role in the Future
of Retail

Micro-Fulfillment enables stores to serve two purposes: merchandise showroom and compact distribution center

When online shopping first emerged on the scene two decades ago, traditional brick-and-mortar stores were becoming obsolete. Even today, the retail industry struggles to find the right balance of in-store and online resources.

What’s a retailer to do? How do you balance the future of commerce while also staying profitable? By better understanding consumer trends and identifying the requirements for sustainable success, Dematic can go beyond balancing and help retailers solve tomorrow’s problems today. That’s powering the future of commerce.

Urbanization and the Changing Retail Landscape

Tomorrow’s marketplace will be driven by two primary factors: Consumers making more online purchases (and expecting fast, free delivery), and traditional retailers making greater investments in omni-channel distribution systems to keep up with these ever-increasing demands.

While stores continue to close, industry leaders are starting to look at their real estate in a new light: not only a showcase for their goods, but also a hyper-local point on a map that’s connected to a wider distribution network. These spaces can augment e-commerce activities and make massive strides toward meeting last-mile delivery.

While stores continue to close, industry leaders are starting to look at their real estate in a new light: not only a showcase for their goods, but also a hyper-local point on a map that's connected to a wider distribution network.

Requirements for Retail Success

Today’s distribution centers average the span of 13 soccer fields. That’s just not going to cut it if delivery demands are hyperlocal and booming in urban areas. The scale and expense can’t be sustained. So, the future of retail real estate must serve a dual purpose as showcase and distribution center, a model that requires:

  • High-density, secure storage in a small footprint, with intuitive automation that retail workers can operate without extensive training
  • Order fulfillment for online purchases that doesn’t interfere with in-store shoppers
  • Hyperlocal urban fulfillment capabilities that close the gap on last-mile delivery

These features enable retailers to serve their shoppers, whether in-store or online, with a differentiated and seamless experience that drives brand preference and ultimately brand loyalty.

We call this intralogistics innovation micro-fulfillment.

What is Micro-Fulfillment?

Dematic Micro-Fulfillment is a scalable, modular, configurable solution that can be implemented in as little as 12 weeks. The solution can fit into the back of a store or in a separate location. It offers high storage density to create “the infinite aisle,” high throughput, and three temperature zones (ambient, chilled and frozen) to enable affordable automation for grocers and other temperature-sensitive retailers. Micro-Fulfillment makes one-hour order fulfillment an easy achievement.

See it for yourself in the video below. When an order enters the system, the automation kicks into gear, using reliable, proven automation technology with guaranteed uptime to keep our customer’s warehouses operating 24/7.

Dematic order management software orchestrates the moves: automated shuttles within the temperature-controlled storage area retrieve the fruit and then is conveyed to a workstation. A monitor at the workstation provides instructions, and an operator transfers the requested amount to the shipping container. The system retrieves additional items as needed, and operators consolidate the order. Then off it goes to shipping where it is packaged and labeled for delivery — whether that's directly to the customer or in-store or curb-side pickup.

A select few retailers have seen it. And they like what they see.

During the recent Material Handling and Logistics Conference (MHLC), Dematic customers were invited to see the first Micro-fulfillment solution in action. A total of 160 visitors from 35 companies attended the special preview of the system. Its market-changing potential was evident to executives across all retail markets, from grocery to luxury-brand fashion.

Micro-Fulfillment's Role in the Future of Retail

Powering the Future of Commerce

Dematic is looking forward, developing intralogistics innovations that make our customers more successful in their jobs and in their marketplaces. Micro-Fulfillment is a demonstration of our mission to power the future of commerce. If you’re looking forward like we are, click here to see more of our vision.

By Hasan Dandashly

President and CEO of Dematic. Empowers employees to innovate in intralogistics. Simultaneously serves and leads.

Stay connected! Sign up for email updates from Dematic Connections