Micro Fulfillment Market Size to Reach $20.5 Billion at a CAGR of 44.1% by 2028

The Global Micro Fulfillment Market is valued at USD 2.3 Billion in 2021 and micro fulfillment industry is projected to reach a value of USD 20.5 Billion by 2028 at a CAGR (Compound Annual Growth Rate) of 44.1% over the forecast period.

Micro fulfillment is an emerging market that has gained significant attention in recent years. It refers to the use of small-scale automated fulfillment centers to handle online orders for groceries and other consumer goods. Micro fulfillment centers (MFCs) typically range in size from a few thousand to tens of thousands of square feet and are located in urban or suburban areas to facilitate faster delivery times.

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The rise of e-commerce and the growing demand for same-day or next-day delivery have driven the growth of the micro fulfillment market. Companies such as Kroger, Walmart, and Amazon have invested heavily in MFCs to improve their online order fulfillment capabilities and provide customers a more convenient shopping experience.

Top Companies in Micro Fulfillment Market

• Alert Innovation Inc (U.S.)
• Bastian Solutions LLC (U.S.)
• Ahold Delhaize (Netherlands)
• Davinci {{keyword}} (U.S.)
• Flowspace (U.S.)
• Dematic (U.S.)
• Fortna Inc. (U.S.)
• HÖRMANN (Germany)
• Honeywell International Inc. (U.S)
• Instacart (U.S.)
• KPI Integrated Solutions (U.S.)
• LOCAD (Singapore)

Micro Fulfillment Market Dynamics:

Micro Fulfillment Market centers are the strategic placement of smaller warehouses and distribution facilities within widely densely populated areas. The closer proximity of such facilities to consumers often enables rapid and cost-effective delivery of products ordered online. The primary driver for the rising micro-fulfillment market can be attributed to the expanding e-commerce industry along with the rising demand for de-stressing traditional and shipping will increase.

Additionally, the unreliability of traditional storage and shipping methods needs to be identified. This is solved by identifying the key regions associated with the wide usage of online channels wherein fulfillment centers are built. These factors will widen the scope of the market's growth.

Increasing demand for sophisticated shipping and storage systems, along with the manipulation of a quick and profitable delivery schedule, will increase the footprint of the global Micro Fulfillment Market during the forecast period. Major manufacturers are focusing on saving fuel and consuming less fuel, as fulfillment centers are located within key vicinity of important zones. Rising investment by key manufacturers toward identifying such pivotal zones will increase the number of fulfillment centers during the forecast period. Rising disposable income among the wider population is expected to increase, further widening the scope of the e-commerce industry. Consumers required many groceries and other essentials even if forced into lockdowns. Micro Fulfillment Market centers leveraged their existing position in the market to fill in the gap for this increased demand in deliveries.

Various end-users, such as manufacturing and general stores, are widening their scope in terms of utilization. Micro Fulfillment Market centers are also heavily reliable as they ensure on-time deliveries, which is expected to fuel the growth of the global micro-fulfillment market during the forecast period. The rising integration of technological advancements is expected to create wider opportunities for the global micro-fulfillment market during the forecast period. A higher cost of capital for setting up automated robotic solutions is expected to hamper the growth of the global Micro Fulfillment Market during the forecast period. Since automated robotic devices are still in the development phase, with many tests being carried out to check for physical viability, the economic viability of such practices still needs to be discovered.

Overview of Micro Fulfillment

Micro fulfillment is a concept that refers to the use of small automated fulfillment centers to handle online orders for groceries and other consumer goods. These fulfillment centers are typically located in urban or suburban areas, ranging in size from a few thousand to tens of thousands of square feet.

Micro fulfillment centers (MFCs) use a combination of automation and human labor to process orders quickly and efficiently. They are designed to handle a high volume of small orders, allowing retailers to offer faster delivery times and more flexible delivery options.

The use of micro fulfillment is becoming increasingly popular as more consumers turn to online shopping, and retailers seek to improve their order fulfillment capabilities. Some key benefits of micro fulfillment include faster order processing times, reduced labor costs, improved inventory management, and the ability to optimize supply chains by reducing the distance between fulfillment centers and end customers.

Micro fulfillment is expected to grow in popularity in the coming years, with more retailers investing in these automated fulfillment centers to improve their online order fulfillment capabilities and provide a better shopping experience for their customers.

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Micro Fulfillment Market Challenges

Cost: The upfront investment required to build and operate a micro fulfillment center can be significant. This includes the cost of the facility, automation equipment, and software, as well as ongoing operational expenses such as maintenance, labor, and utilities.

Scalability: While micro fulfillment is well-suited for handling small orders, it may not be as effective for larger orders or seasonal spikes in demand. Retailers may need to invest in additional capacity or alternative fulfillment solutions to accommodate these fluctuations.

Integration: Integrating a micro fulfillment center into existing supply chain operations can be a complex process, requiring coordination across multiple systems and stakeholders.

Location: The success of a micro fulfillment center depends on its location. It must be situated in an area that is easily accessible to customers and can support the necessary transportation and logistics infrastructure.

Customer acceptance: While many consumers appreciate the convenience of same-day or next-day delivery, there may be some resistance to the use of automation in the order fulfillment process. Retailers will need to address any concerns around privacy, security, and the quality of the products being delivered.

Overall, the micro fulfillment market presents significant opportunities for retailers to improve their order fulfillment capabilities and provide a better shopping experience for customers. However, companies must also be mindful of the challenges and invest in the necessary infrastructure and resources to ensure success.

Key Developments:

• March 2021: Honeywell International, Inc. announced their latest shipping innovation in the form of the industry's first robotic technology by launching a smart depalletizing robot for Micro Fulfillment Market. This product is anticipated to increase warehouse and distribution center automation.
• July 2022:Alert Innovation, Inc., a market leader in e-grocery fulfillment automation, announced signing a definitive work agreement to be completely acquired by Walmart. This is expected to positively boost the Micro Fulfillment Market impact. Alert Innovation has been working together with Walmart since 2016 on Walmart's market fulfillment centers (MFCs) and began with the pilot of the Alphabot System in Walmart's first MFC in New Hampshire in 2019.

Micro Fulfillment Market Regional Analysis

The Micro Fulfillment Market in North America will occupy the largest market share during the forecast period in terms of revenue and volume of goods delivered. Factors such as increased integration of e-commerce as the primary mode of delivery will contribute to market growth. The United States will occupy a majority of the portion for the market. Studies reveal that online grocery stores will contribute more than 10% of overall grocery sales by 2025 in the U.S. Consumers developed a habit of purchasing most of their purchases online during the pandemic. This habit is expected to continue. Increasing delivery options such as home deliveries, curb-side pickups, locker-based deliveries, and in-store pickups will contribute to the increasing footprint of the micro-fulfillment market in North America.

Asia Pacific is expected to grow with the fastest-growing CAGR due to the rising inclination of e-commerce deliveries. The growing preference for e-commerce among business practices is expected to increase the region's footprint on a global scale. This will prompt an increase in B2B e-commerce adoption in the region, prompting an increase in the micro-fulfillment market.

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