The market for micro-fulfillment center (MFC) solutions is expected to grow rapidly, according to research on automated MFCs by analyst firm LogisticsIQ, driven by rising ecommerce volumes, the changing geographical nature of e-commerce demand, and the growing desire for same-day or same-hour delivery. The firm’s latest round of MFC market research concludes the MFC market will have a cumulative opportunity worth more than $36 billion within the next 10 years, and by 2030, an installed base estimated at approximately 6,600 sites or locations which could be considered MFCs.
“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,” stated Avi Gupta, LogisticsIQ Lead Analyst. “It is expected to have more than $6 billion annual market revenue of micro-fulfillment automation from grocery omnichannel (spanning companies such as Walmart, Kroger, Ocado, Tesco, Albertsons, Meijer, Ahold Delhaize, Target, Carrefour) and pure-play ecommerce players (including Amazon, Gopuff, Instacart, Grofers, Missfresh, Dingdong) only by 2030.”
The third edition of this study is a market analysis of more than 250 players (part of the firm’s Market Map), key technologies, targeted warehouse sizes, end-user Industries, store types and more than 20 countries/regions. The analysis is validated through 50-plus i interviews across the value chain with components and technology providers, system integrators & manufacturers, grocery stores and end-user industry verticals, the firm added.
Among key points the research highlights:
“It is estimated that online grocery will contribute more than 10% of overall grocery sales in US by 2025, as consumers will continue with the habit developed during the pandemic,” said Leena Mittal, consulting specialist at LogisticsIQ. “Delivery options may vary [to include] home delivery, in-store pick up, curb-side pickup, or locker delivery. Urban warehouses with automation will be key to meet this demand with same day delivery expectations, although delivery fee is the one of the key factors to decide the digital channel in the long term. The main key is to make the online grocery business more profitable as compared to current scenario of either net loss or thin profit margin.”