Micro Fulfillment Market - An opportunity worth $36B driven by eGrocery, Ultrafast Deliveries and Dark Stores

INTRODUCTION

Micro Fulfillment Centers (MFCs), a highly recommended popular e-commerce fulfillment strategy, is an effective way to meet the rising volumes, the changing geographical nature of e-commerce demand, and the growing desire for same-day or same-hour delivery. As per the latest market research study, Micro Fulfillment Market is expected to have a cumulative opportunity worth ~$36B in next 10 years by 2030 with an installed base of ~6600 MFCs if the technology and concept remains permanent. Year 2022 & 2023 are going to be the cornerstone for Micro Fulfillment market touching a billion-dollar mark and setting the base for the future.

The 3rd edition of this study is having a market analysis of more than 250 players (part of our exclusive Market Map), Key Technologies, Targeted Warehouse Sizes, End-User Industries, Store Types and more than 20 countries/regions although this market is getting adopted mainly in U.S. and U.K. at present. Our analysis is also validated through 50+ in-depth interviews across the value chain with components and technology providers, system integrators & manufacturers, grocery stores and end-user industry verticals. Market size tables (85+) are also available in pivot-excel format to analyze further along with 200 pages in-depth market study. It is a best reference to analyze the market attractiveness, to identify the partner, customer or supplier, to check the competitive landscape, to benchmark the new technologies and to select the right geography & industry vertical for your products and services. Voice and opinion of grocery stores, dark stores and instant delivery service providers have been taken as the key parameter for this market forecast.

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HIGHLIGHTS OF MICRO FULFILLMENT MARKET STUDY

• Annual Micro-Fulfillment Center installations will grow more than 20x by 2030, from current installed base of ~50 in 2020 to be around ~6600 in 2030
• More than 80% of these micro fulfilment centers will be deployed in North America in 2022.
• Micro-Fulfillment Market is supposed to grow with 10X by 2025 and 30X by 2030 as compared to current market of 2021. MFC Services itself will contribute more than $1.6 Billion by 2030 in this emerging space.
• Almost 65% installation are supposed to be deployed with Shuttle-Based and Cube-Storage technologies in 2030 led by AutoStore and Takeoff Technologies. Players like Geek Plus and Hai Robotics have also entered in this market through their AMR based solutions to give a tough competition to traditional players.
• It is expected to have more than $6B market revenue of Micro-Fulfillment automation from Grocery Omnichannel (Walmart, Kroger, Ocado, Tesco, Albertsons, Meijer, Ahold Delhaize, Target, Carrefour) and Pure-Play E-commerce/Q-commerce players (Amazon, Gopuff, Instacart, Grofers, Missfresh, Dingdong) players only by 2030.
• We have forecasted ~1000 MFC installation for In-store deployment and ~380 installation for dark stores in 2030 although there can be some installation within existing or new DC/FC as well.
• More than 50% of such MFC installations are supposed to be targeted for warehouses having a size of between 5000 sq. ft. and 25,000 sq. ft. as we are expecting a good growth for less than 5000 sq. ft. segment due to new dark stores opened by ultrafast delivery players
• It is not a sustainable or profitable business for delivery service providers like Getir, Grofers, GoPuff, Instacart, Uber, Jokr, Fridge No More, Gorillas, Buyk, Delivery Hero, Swiggy, Zapp, Rappi, DoorDash, Weezy, Picnic, Jiffy, Shipt, Deliveroo, 1520, Dijas, Caviar, Rakuten, Flink, Justo, BevMo etc. to fulfil and deliver the order manually although they can expect advertisement revenue from FMCG players.
• Delivery service providers may partner with retailers or may have their own dark stores to automate the fulfilment process. Gopuff itself is having more than 500 dark stores and it reflects the huge opportunity of automation in this new customer base.
• USA is going to be main market for next 10 years followed by U.K., Japan, France and China. We do expect around 3400 MFC installed base i.e., more than 50% of worldwide market within USA by 2030.

MICRO FULFILLMENT – NEED OF THE HOUR

Industry giants such as Amazon, Walmart, Ocado, Kroger and Alibaba are driving the “best-in-class” e-commerce fulfillment strategy for the last decade. They are also investing in cutting-edge robotics and automation for their Customer Fulfillment Centers (CFCs) – that are continuously redefining target productivity and service levels. But these centralized fulfillment centers are situated far away from the city and have an additional transportation cost along with considerably more delivery time as compared to consumer’s expectations, especially in grocery and F&B industry. Online grocery is already having a slim profit margin and micro-fulfillment has the ability to increase its margin and to make e-commerce accessible to a broader range of retailers because it cuts down major costs like

• The cost of storage, retrieval and picking (through automated MFC)
• The cost of the last mile delivery (through hyperlocal placement)
• The cost of real estate (through condensing fulfillment centers down into MFCs)

That’s why, Micro Fulfillment Center (MFC) is a perfect solution for urban warehouses with an approximated size between 5000 SF and 25000 SF that can meet the requirement of same day delivery through in-store picking or multiple last-mile delivery options. It can even be deployed at backside of the retail store, dark stores, malls or basements. A typical MFC system is having 1-2 aisles Dry + 1-2 aisles Chilled, 5,000-8,000 totes 10-high storage to 24’ x 2-deep, 2 decanting stations and 2-4 pick stations with each station picking at 700-800 UPH.

TOP FACTORS

• It is estimated that online grocery will contribute more than 10% of overall grocery sale in US by 2025.
• It is expected that consumers will continue with habit of buying online grocery developed during pandemic.
• Delivery options may vary as Home Delivery, In-Store Pick Up, Curb side Pickup, Locker Delivery etc.
• Urban warehouses with automation will be key to meet this demand with same day delivery expectations.
• Delivery Fee is the one of the key factors to decide the digital channel in the long term.
• Key to make online grocery business more profitable as compared to current scenario of either net loss or thin profit margin

MICRO FULFILLMENT MARKET TRENDS

Micro Fulfillment Market has been the most important and emerging trend during pandemic (covid-19) coming out from some bigger trends like eGrocery Growth, Urban Warehouses, Dark Stores and Automated Cold Storages. Huge investment in start-ups like Takeoff Technologies ($86M+), Fabric ($336M+), Attabotics ($82M+), Exotec Solutions ($111M+) and Alert Innovation are witnessing this growth along with presence of existing traditional players like Dematic, Swisslog, Knapp, OPEX Corporation, Muratec, AutoStore, Honeywell Intelligrated and Vanderlande. Retailers such as Walmart, Amazon, Kroger, GAP, Nike, Woolworths, Amazon, Ocado, Carrefour, Uniqlo, Meijer, H-E-B, Albertsons, Majid-Al-Futtaim, Decathlon, Nordstorm, H-Mart and Ahold Delhaize have already started adopting and implementing these new technologies during pandemic. Apart this, piece picking robots’ suppliers like Berkshire Grey, Righthand Robotics, Kindred AI, Covariant, OSARO, Plus One Robotics, XYZ Robotics, Fizyr have established a new attractive capability for order picking in ecommerce fulfillment to transfer the good-to-person (G2P) systems into good-to-robot (G2R) systems.

Coming to MFC system architecture and technologies, AutoStore is an old and proven technology with hundreds of installations in ecommerce fulfullment including the recent partnership with Swisslog and H-E-B for micro fulfillment center in U.S. but they are going to face a very good competition in MFC space from new players like Takeoff Technologies, Fabric, Exotec Solutions, Attabotics, Berkshire Grey, Geek Plus and Alert Innovation. Established system integrators like Dematic, TGW, SSI-Schaefer, Daifuku, Honeywell Intelligrated, Vanderlande and Knapp are using the traditional shuttle and ASRS systems which are good and already proven for big fulfillment centers but not 100% ideal for micro fulfillment yet. At the same time, Attabotics, Alert Innovation, and Exotec are using emerging 3D technologies having good architecture specific to MFC with high density and no point of failure but it will too early to say anything as there are only few installations and not 100% proved yet. Apart this, software is going to be the main differentiator and value add for MFC systems as some suppliers are having their in-house software capabilities and others are having a partnership to do the needful. As per our discussion with technology suppliers and industry experts, every technology and architecture are having its own advantage and disadvantage depending upon the grocery store’s location, current requirement, capital expenditure, fear of digitalization and automation from big players, and insecurity related to its consumers’ information.

KEY PLAYERS ANALYZED IN MICRO FULFILLMENT MARKET ECOSYSTEM

SUPPLY SIDE

• Material Handling Equipment / OEM / System Integrator:
Dematic, AutoStore, Swisslog, Knapp, Addverb Technologies, Alert Innovation, Honeywell Intelligrated, LG CNS, Element Logic, Attabotics, Exotec, Fortna, OPEX Corporation, Muratec, Ocado Technologies, Fabric, Hörmann Logistik, TGW Logistics, Vanderlande, ALSTEF, AM Logistic Solutions, Reesink Logistic Solutions, Lalesse Logistic Solutions, Conveyco, Dexter, KPI Solutions, S&H Systems, AHS, SSI Schaefer, Beumer Group, Koerber Group, Daifuku, GIEicom, MHS, System Logistics, Urbx Logistics, Fives Intralogistics, Kardex Group, Toyo Kanetsu Co., Ltd. (TKSL), IHI, Rocket Solution, Samsung SDS, SmartLOG, Modula, SoftBank robotics, StrongPoint, ASETEC, Klinkhammer Intralogistics GmbH, LAC Conveyors & Automation, Errevi Elettric, and Ubh Group

• Software:
Takeoff Technologies, Berkshire Grey, Food-X Technologies, Samsung SDS, Locai, Pick8ship, Boxed, Emporix, Freshop, Today, Egrowcery, Stor.ai, Homesome, Ohi, StrongPoint, Growcer, Mercato, Fresho, Farmstead, Local Express, Mercatus, Salesforce, My Cloud, ThryveAI, Snappy Shopper, and GrocerKey

• Mobile Robots (AMR):
Geek Plus, Grey Orange, Hai Robotics, Tompkins Robotics, TARO, Magazino, CAJA Robotics, and Coalescent Mobile Robotics
• Traditional WMS: Blue Yonder, Infor, High Jump, Manhattan Associates, and SAP

• Piece Picking Robots:
Righthand Robotics, Kindred AI, Robomotive, Nimble AI, Berkshire Grey, AWL, Covariant, Lyro, Plus One Robotics, Fizyr, No Magic, Osaro, XYZ Robotics, Handplus Robotics, and Mujin Corp.

• Lockers / Click to Collect:
Parcel Pending, Myrmex, i-collector, pick8ship, HomeValet, Cleveron, Avery Berkel, InPost, Lozier, Locktin, Colib, ITAB, Noyes Technologies, and Retail Robotics

• Last Mile Delivery:
KiwiBot, Aethon, Starship, Robby, Refraction AI, Deliv, Zipline, Pick8ship, TeleRetail, Gatik, Nuro AI, WorkHorse, Yandex, HUGO, BoxBot, Parcelly, Effidence, Dispatch, Postmates, Skycart, Flytrex, Flirtey, Neolix, Volocopter, Marble, Eliport, Panasonic, Savioke, Roadie, Udelv, Robomart, Loginext, FedEx, Mybotics, Cainiao, JD.com, Routific, Easy Mile, Scout, Matternet, Bringg, eHang, Hello World Robotics, Ubiquity Robotics, autox, Tiny Mile, Amazon Prime Air, AIRMAP, AIRIO, Wing, UVL Robotics, Deuce Drone, DroneUp, Drone Delivery Canada, Flytbase, Reliable Robotics, Ottonomy.IO, and Continental

DEMAND SIDE

• Retail
Amazon, Walmart, PepsiCo, H-E-B, Ahold Delhaize, Super-Pharm, Ocado, Apple, Albertsons, Cdiscount, BigY, FreshDirect, fast Retailing, H-Mart, Wakefern Food Corp, Nordstrom, Loblaws, Associated Wholesale Grocery (AWS), Kroger, Sedano’s, Majid Al Futtaim, Woolworths, Alpen, Carrefour, Sobeys, Meijer, Eleclerc. Redmart (Lazada), Tesco, LIDL, ALDI, Publix, Target, Costco, Lowe’s, Morrisons, and Sainsbury’s

• Instant / Ultrafast Delivery Services
Instacart, Gopuff, Gorillas, DoorDash, Weezy, Dijas, Getir, Caviar, Delivery Hero, Fridge No More, Picnic, Rakuten Delivery, Flink, Grofers, 1520, Yandex, Justo, Zapp, Merqueo, BevMo, Jokr, Urbx, Uber, Cajoo, Rappi, Peapod, Shipt, Deliveroo, Swiggy Instamart, Jiffy, and Buyk

KEY QUESTIONS TO BE ANSWERED THROUGH THIS STUDY

• What are the major trends and drivers impacting the Micro Fulfillment Market?
• What is the revenue outlook (TAM), Installed base and forecast till 2030 for Micro Fulfillment Market by top segments such as Technologies, End-User, Store Type Deployment, Warehouse Size, Services, and Countries?
• What are the key investments, partnerships and M&A in Micro Fulfillment space?
• What is the impact of ultrafast delivery and dark stores on Micro-Fulfillment Market?
• What is the competitive landscape of Micro Fulfillment Market?
• What are the strategic imperative and calls to action that will define growth and success within Micro Fulfillment by 2030?

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LogisticsIQ™ is a research and advisory firm empowering decision makers from top fortune 1000 companies, financial and research institutions, private equity and high potential start-ups with market insights in Supply Chain & Logistics sector to make better decisions. We enable this by analysing the right mix of the best data, the best research methodologies, and the best industry panel to deliver value to our clients.

Our goal is to do the analysis of Supply Chain and Logistics sector with a focus on Automated Material Handling and Next Generation Supply Chain Technologies like Internet of Things (IoT), Artificial Intelligence (AI), Blockchain, Augmented and Virtual Reality (AR/VR), Cyber Security, 5G, Big Data and Robotics Automation. We prefer to work on latest concepts like Micro-Fulfillment, Urban Warehouses, Digital Twin, Last Mile Delivery, Autonomous Mobile Robots, Piece Picking Robots, Pick By Light, Cube-ASRS, Delivery Robots etc.

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