It’s no surprise that the COVID-19 pandemic has transformed and revolutionised the way in which Australians are shopping. In-person browsing is slowly becoming a thing of the past with ever changing restrictions and the prioritisation of health and safety. As a result, Australia has seen a boom in the increase of e-commerce, with retail trends accelerating by a decade over the past year (Australian Retail Association).

These changes to the shopping scene have made the overall experience much more convenient and seamless, with August 2021 seeing a record 5.9 million online shoppers.[1] Australians have also become much more familiar with click-and-collect options, which saw a 7% increase from July 2019 to March 2020.[2]

However, the increase in e-commerce spending has put supply chains under great pressure, and it is often overlooked that retail stores are not designed to be distribution centres. As popular Australian retailers experienced overwhelming demand during the lockdown period[3], consumers took to social media with frustration that their click-and-collect orders were delayed and they were unable to book pick up times due to system crashes[4].  

These issues require thoughtful assessments and creative problem-solving by retailers. Among the many approaches being considered are micro fufillment centres (MFCs), as they allow retailers to transform a portion of their stores into mini distribution centres, enabling a fast in-house solution to address supply and demand complications. MFCs have the ability to reduce manual work traditionally completed by human workers by utilising robotics, allowing people to focus on greater priorities and follow more efficient processes.

As my retail industry consultant Mark Delaney has pointed out before, it’s hard to imagine where the space might come from to add an MFC in an already busy grocery store. However, MFCs typically take up less than 20,000 square feet and the construction impact is minimal, making them a feasible option for many grocers.

Plus, the changes in shopping behaviour brought on by the pandemic alleviated the amount of in-store traffic many grocery stores receive, making it easier to justify a greater allocation of store space to an MFC. The pandemic provided a new perspective on necessity for consumers and retailers alike, with many realising there is no need to have five different brands of a particular item in store.

Some products can now be online exclusive or direct to consumer (DTC). This has helped grocery retailers reduce the number of brands they carry, thus freeing up even more space and making it more reasonable to dedicate square footage to an MFC.

For a reasonably low capital expense (CAPEX) investment, retailers can leverage MFCs to address e-commerce fulfillment more profitably while freeing up staff to restore some of that customer loyalty that is begging to be addressed as we emerge from the pandemic. To a certain extent, the pandemic will be recorded in the history books as having caused as much retail innovation and change as the advent of Amazon. Interesting times indeed.

To learn more about technology solutions that are helping grocery retailers transform their operations, click here.

Tom Christodoulou is sales vice president of Australia and New Zealand at Zebra Technologies.




[4] Ibid.