Micro-Fulfillment: How Brick-and-Mortar Businesses Can Truly Thrive in a Delivery-Centered Economy

Published on August 12, 2020
By Shreyas Ravindra

We've all experienced the countless brick-and-mortar closures in our hometowns. Mom-and-pop shops are becoming things of the past while larger e-commerce companies suck in billions in revenue. The question on everyone's minds is - are efforts to support local business just delaying the inevitable, or is this the start of an incredible comeback story?

In general, e-commerce has played a pivotal role in snatching market share from brick-and-mortar retail stores, and with speedy delivery and lower prices, it’s not a hard sell. With COVID-19, actually getting out of your house and going shopping seems even less appealing. Online retail sales skyrocket in this new normal. E-commerce is here to stay, but local retail stores can’t compete fairly.

Currently, delivery costs are not affordable, so sometimes it’s just not economically feasible for retail stores to offer home delivery. If they do offer some sort of delivery, then customers are often dissatisfied by an additional surcharge because they’ve become comfortable with “Fast, Free Shipping with Amazon Prime”. Customers don’t want to pay for shipping, and brick-and-mortar stores can barely sustain the high costs of delivery. This makes it nearly impossible for brick-and-mortar stores to compete with e-commerce giants.

We can thank last-mile delivery for these exorbitant shipping costs. Last-mile delivery is the last ten miles of delivery, usually from a distribution center to the customer’s mailbox, and it makes up for 53% of the total shipping cost. New technologies, like delivery drones and rovers, try to address this issue by automating the last-mile delivery process, but that requires robust infrastructure to support the actual adoption of these technologies. Companies like Aersys are building infrastructure-based solutions to promote the use of automated delivery technology.

A fairly recent concept called micro-fulfillment is gaining traction as many logistics companies try to find optimal solutions for last-mile delivery. Micro-fulfillment centers are small-scale automated logistics hubs placed near end-consumers to help deliver things things to customers more quickly and affordably. These hubs offer a practical and inexpensive solution for small retailers, lifting barriers to a playing field that only the retail giants had the means to compete on.

Combining micro-fulfillment technology with autonomous delivery infrastructure would result in an innovative solution for last-mile delivery. Drone and rover delivery companies can leverage this infrastructure/micro-fulfillment technology to completely automate the last mile, slashing delivery costs and delivery time. Local brick-and-mortar shops can leverage technology like this to quickly fulfill online orders and increase sales revenue. With a click of a button, customers can order anything they’d like from their local retail store, and receive it in less than a day. Automating the last-mile of delivery would redefine the convenience of e-commerce and create more opportunities for smaller retailers.

Retail stores aren’t the only ones facing a problem with high delivery costs. Restaurants deliver food to customers too, but it can get expensive. Some small restaurants can’t afford to have their own delivery service, and food delivery services like DoorDash or UberEats take huge cuts from the restaurant to deliver food. By using micro-fulfillment technology, these restaurants don’t have to pay nearly as much, and they can still provide delivery services. This way, customers can also reap the benefits of inexpensive delivery, which attracts more sales for local restaurants.

Delivery should attract more people, not turn them away. By partnering with companies like Aersys, local retail stores and restaurants have a fighting chance to compete with e-commerce giants. Micro-fulfillment and automated delivery enables customers to support local businesses with the convenience of shopping online—which creates more opportunities and ultimately helps the local economy!

Aersys imagines a world where people and automated vehicles work in tandem to bring consumers a seamless delivery experience. To some, this world seems distant, but to others like us, this future is right around the corner.

Driven by his passion for technology, business, and people, Shreyas takes pride in developing businesses that care about social impact. He commonly works with seed and early stage startups by building a mission-based culture and leveraging technological innovation to create beautiful customer experiences. Shreyas has been recognized by the Rutgers University Entrepreneurship community for his commitment to helping student-led startups grow. Shreyas was an early team member and investor at Aersys.
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