PUBLISHED SEPTEMBER 15, 2022
How to Cost Effectively Provide One-Day Delivery with Micro-Fulfillment
Amazon has made the promise of two-day delivery a harsh reality for many eCommerce businesses. With hundreds of fulfillment centers and last-mile delivery drivers located strategically across the country and more than a decade's worth of investment in warehouse robotics, the behemoth has undeniably impacted consumer habits and the supply chain. But thanks to the promise of new and emerging micro-fulfillment technologies, smaller eCommerce businesses have a chance to be competitive.
Micro-Fulfillment in Dense Populations
Micro-fulfillment centers, or MFCs, have many advantages compared to traditional warehouse operations. For example, with MFCs, a business can condense warehouse storage to a fraction of the size and allowing retailers to store more inventory closer to their consumers. In addition, new storage and retrieval technologies allow for a higher density of storage which means more SKUs stored in each MFC.
Because of their central location, eCommerce businesses that use micro-fulfillment centers can guarantee that products arrive on customers' doorsteps in the promised timeframe. A study reported by the JOC found that "A survey of 15 US metropolitan areas shows the final leg of e-commerce fulfillment to be between6 and 9 miles on average." Location also plays a critical role in the cost of last-mile delivery. Micro-fulfillment centers create shorter delivery distances resulting in optimized routing and reduced fuel and energy costs.
Fewer Shipping Zones
While optimized last-mile routing can offer the company cost savings, it can also provide benefit to the consumer. With fewer transfers during shipping, there is a lower chance of an order being lost or damaged and the company having to issue a refund or replacement product. As businesses consolidate shipping zones through MFCs, they are also creating better experiences for the customer, directly correlating to loyalty and retention in our digital world.
Faster Order Fulfillment
Many businesses have already taken the first step towards faster fulfillment by investing in micro-fulfillment centers close to their consumers, but location is just the start of providing shorter shipping delivery times. Enhanced efficiency comes when MFCs begin to automate common picking processes with the addition of automated storage and retrieval systems.
The use of automation also means that warehouse staff are freed from mundane and physically taxing tasks like pushing a cart or walking endless aisles. For example, within an Attabotics system like the one being introduced at Modern Beauty’s fulfillment center in Calgary, robotic shuttles move autonomously within three-dimensional space to store and deliver goods to workstations on the perimeter. Warehouse staff can then focus on the final details of each order, such as adding any non-conveyable goods. With robots and employees working in tandem, orders are processed, picked, and packed much more quickly, allowing a shorter time between receiving an order and loading it on the delivery truck.
MFCs Key to Cost Effective Next Day Delivery
Same-day and next-day delivery can be expensive, but with automated micro-fulfillment centers, smaller eCommerce retailers have a chance to compete with the likes of Amazon and Walmart. With more SKUs closer to the consumer and the cost efficiencies found in automation, MFCs are the best way for small to mid-sized eCommerce businesses to meet customer demands and create exceptional shipping experiences for their customers.