Faster Than Amazon: Deep Inside an Underground Robotic Grocery Store
According to the UN, nearly 70% of the world’s population will live in dense metropolitan cities by 2050. If New York City’s 1.5 million daily packages is any example, today’s urban infrastructure is breaking at the seams as e-commerce penetration grows and delivery times shrink. In the US, groceries are the last vertical to be revolutionized by e-commerce. Today, just 3% of total grocery spending occurs online. In the next two years, FMI/Neilsen expects online grocery penetration to skyrocket to 13% of total grocery sales, or ~$100bn. Small-scale warehouses colocated in existing retail sites or parking garages offering 1hr delivery times, known as micro-fulfillment centers (MFCs) pose a potential solution and are coming to a major city near you in the near future.
Ever since Amazon acquired Whole Foods, grocers have been looking for technology solutions to stay competitive, building robotic Amazon-like fulfillment centers dedicated for online grocery delivery. The first iteration of these partnerships is evidenced by Kroger’s investment into 20-year-old, UK-based Ocado. Its warehouses are as large as 375,000 square feet, cost $55mm to build over 2–3 years, and…
