Fabric Expands Retail Micro-Fulfillment Center Network

Fabric, the New York-based on-demand retail platform, launched a new 39K SF micro-fulfillment center in Dallas this week, the latest in a growing network of MFCs the platform owns and operates in the US.

Fabric said in an announcement that it plans to double the capacity of its MFC network by the end of this year, enabling the micro warehouses to service on-demand retail deliveries to 90% of US consumers in two days or less.

Fabric’s fully automated robotic MFCs, which can be operated by as few as three workers, use artificial intelligence software to manage inventories.

“We’re in the middle of an historic shift in consumer expectations when it comes to fast and free shipping,” said Colin Coggins, Fabric’s chief commercial officer. “By placing our MFCs in strategic locations such as Dallas, we can use our robotics and AI technology stack to help retailers meet today’s expectations for super-fast delivery without increasing overhead.”

Chill Brands Group, a Los Angeles-based producer of CBD products, said it will fulfill all of its orders through Fabric’s MFC in Dallas. Chill Brands CEO said Fabric “is an ideal partner to help us ramp up capacity without a huge investment in real estate.”

Micro-fulfillment centers, which can range in size from 2,000 to 50K SF—with most sized at less than 10K—are being embraced by retailers large and small as an essential component of new supply chain configurations that can support on-demand fulfillment needs.

A recent survey of Fortune 500 retailers found more than 90 percent expect to provide same-day delivery services to their customers by 2025. In a National Retail Federation survey earlier this year, nearly half of respondents cited faster fulfillment of online orders as their top priority.

An increasing number of retailers are turning to stand-alone, attached and in-store MFC’s as well as independent operations like Fabric to meet the demand for quick deliveries.

According to a recent report from Ceva Logistics, retail giants including Amazon, Walmart, Target and Walgreens are investing in automated MFCs. Walmart announced last year that it will add automated MFFCs to dozens of its store locations; Walgreens, which has two MFC operating in Phoenix and Dallas, plans to introduce 11 MFCs across the US by the end of this year.

Instacart recently announced it will use MFCs to fill online grocery orders placed via the Instacart Marketplace or through a grocer’s branded Instacart e-commerce site.

A handful of retailers are experimenting with introducing MFC-oriented technology—including robotic order picking and grocery-specific synching software—in mid-sized warehouses with footprints up to 120K SF, the Ceva Logistics report said.

“Since automation plays a critical role in speedier omnichannel fulfillment at the lowest cost, MFCs will continue to flourish,” the report stated. “The MFC model will shape future decisions on the size and scale of omnichannel networks that encompass complex configurations of fulfillment nodes.”

The Ceva Logistics report, entitled “Why Micro-Fulfillment Centers are Here to Stay,” said MFCs are flexible, modular warehouse solutions that enable retailers to scale quickly, but the efficiency of an MFC operation depends on the retailer’s ability to accurately forecast demand.

“Rapid order fulfillment requires the right inventory to be on hand,” the report noted.