Micro fulfillment has transformed from a promising trial into a fully-fledged component of omnichannel strategy for major grocery retailers in only a few short years.
As grocery retailers have discovered themselves competing with Amazon’s admirable two-hour delivery offer, and after going through the outbreak of COVID-19, their search for the fastest, most effective way of fulfilling online orders has become a top supply chain priority. They are looking for a new way to manage their goods.
When talking about micro fulfillment, there’s a name in the market that has been rocking the stage even before the pandemic – Takeoff Technologies.
Takeoff Technologies was co-founded in 2016 by Jose V. Aguerrevere and Max Pedro. Takeoff is an e-grocery technology that allows businesses to use hyperlocal automation to achieve profitable online development. Online orders are placed with well-known retailers using either their own eCommerce platforms or Takeoff’s specialized user interface solution, and Takeoff’s automated technology uses robots in Micro Fulfillment Centers to process the purchase.
Thanks to Takeoff’s exclusivity agreement with Knapp, a top global provider of automated warehousing solutions, the company’s robotics technology is validated and prepared for deployment. Takeoff’s cutting-edge methodology, which addresses both the cost of assembling the order and the cost of the final mile, operates at a substantially lower cost-to-serve than other eCommerce platforms thanks to the automated Micro Fulfillment Centers.
The Call of Duty: Micro-Fulfillment
This company positions itself as the pioneer in the industry with numerous operational locations working in collaboration with significant grocery retail chains, at the forefront of micro fulfillment.
The Need for Automated Facilities in Densely Populated Areas
When important grocers like Walmart, Carrefour, Albertsons, Safeway, King Soopers start trying out automation at the local level to achieve fulfillment of online orders—other retailers just take notice. The practice of using automated order-picking systems with a level of sophistication previously reserved for larger warehouses is known as micro-fulfillment.
These retailers bet that the correct automation will enable them to process customer orders for home delivery or store pickup more quickly and labor-efficiently than with the manual method.
In fact, the majority of these early ventures into micro-fulfillment were made before the pandemic impacted the way that we all live, eat, and buy. According to research by FMI-The Food Industry Association, online grocery sales increased by 300% in the early stages of the epidemic. According to a Mercatus report, 21.5% of all food sales will be made online by 2025.
This sudden transition to online buying, particularly in the grocery industry, has led to a growing interest in using automation inside stores or at relatively small, but highly automated facilities in densely populated areas. In order to establish effective fulfillment centers near consumers, automation—particularly “goods-to-person” systems—must be scaled back.
That’s where Takeoff has jumped in the arena.
Influence the Grocery Stores of the Future
The manual picking model has all the same issues that grocery stores do, including low inventory visibility, high levels of substitution, and speed restrictions on a picker’s ability to move throughout the store.
Micro-fulfillment, an automated technology, offers end users and retailers practically flawless inventory visibility. Instead of relying on the picker to identify a replacement for them, customers can make substitute selections on the check-out screen, or they run the risk of not getting a similar item at all. Predictive analytics on inventory, performance operations, and logistics operations also benefit from the real-time data obtained by automated systems.
Love your lamb chops but don’t care about roaming the aisles for toilet paper? The grocery store of the future will feature a combined shopping experience where “wants” items (meats, coffee, flowers) are still made available to pick and enjoy in-store, while routine items are set aside for drive-through and delivery fulfillment.
Automation allows for the investment in click-and-pick technologies by making humans 10x more productive. A brick-and-mortar supermarket can only construct 20 units each labor hour, whereas a Takeoff micro-fulfillment center can assemble 130 units. Additionally, it boosts online traffic by 20%.
To restate, the main challenge is upholding low prices in a situation where costs are rising.
Automated micro-fulfillment centers are the solution that TakeOff Technologies has discovered. The startup provided the only profitable eGrocery solution, shrinking hyper-local automation to a size that could fit in a small warehouse or the rear of a grocery shop.
Their micro-fulfillment facilities can often assemble an order in under 15 minutes. The manual picking technique, however, needs at least one hour. Being hyperlocal, or close to consumers’ homes and places of business, lowers delivery costs as well.
“Our eGrocery solution was created with the grocer and the shopper in mind. Grocery is an incredibly complex industry, and our products are unlike any other: they are low-value, perishable, heavy, and low-margin. Our automated solution is flexible enough to manage these complexities. We ensure the correct picking method for the correct product,” TakeOff Technologies describes on its website.
The future of supermarket shopping is online. Four years ago, 0.5% of purchases were online. In 2021, it was expecting to be north of 10% – a 20x increase. After the pandemic, this pattern of behavior will continue, and customers will continue to anticipate the same in-store prices and two-hour delivery.
“We can help reimagine retail, and in doing so we can actually democratize access of quality foods at even cheaper prices, all while adding convenience.” Said Max Pedro, Co-CEO of Takeoff Technologies. “In a world without shelves, shoppers just want convenience and not to pay more for it.”
It’s Not About Grocery Transactions, but Helping People More Productive
Following its innovative method and success in helping grocery retailers, Takeoff Technologies has snapped a big amount of money from series of funding. This Massachusetts-based startup raised $25 m in Series C fundraising in 2019. Forrestal Capital led the financing for a 5% interest in the business. The company was valued at $500 million, bringing the total amount raised to $86 million in that year.
In 2021, Takeoff Technologies raised $85,1 million in a Series D fundraising, bringing the total funds raised to $146,1 million. Forrestal Capital took the lead in the Series D fundraising. With this financing, a spread across North America, Europe, and Australia was done successfully.
Recently in 2022, TakeOff brought up an undisclosed amount in a Corporate Round from Marfrig.
Besides having poured in a huge capital, the startup has been receiving many awards in various categories.
Among hundreds of applicants, Takeoff Technologies, a Massachusetts-based business that is revolutionizing the grocery industry with its automated micro-fulfillment solution, was chosen as one of the World Economic Forum’s “Technology Pioneers” in 2020 for its contributions to the grocery retailing industry.
In December 2022, Takeoff Technologies Awarded Top Place to Work in Massachusetts by the Boston Globe. Among hundreds of applicants, Takeoff Technologies was selected and ranked 15th in the medium-sized (100-249 employees) business category.
Also in 2022, Takeoff was named by Deloitte as a winner of the Technology Fast 500, placing first in software and services and second overall.
Currently, the company has 270 employees and is on its growing journey.
Silently Accelerate the Fulfillment Speed of Everyday Grocery Brands
Along with expanding its omnichannel customer access to products, Albertsons is improving its capacity to handle purchases and orders across its perishables supply chain. The retailer has been testing “micro-fulfillment” facilities since 2019 with the help of Takeoff Technologies’ hyperlocal fulfillment system. Micro-fulfillment centers are often housed inside of already-existing stores and have between 15,000 and 18,000 of the most popular items on the local market.
In order to open a fulfillment center in Clifton, New Jersey, in 2019, Takeoff has partnered with Wakefern Food Corp, the biggest retailer-owned supermarket cooperative in the country. Hyperlocal fulfillment centers from Takeoff Technologies let retailers operate more quickly and more affordably while enhancing the whole online grocery shopping experience for customers.
In September 2020 – Associated Wholesale Grocers (AWG), the nation’s largest cooperative food wholesaler to independently owned supermarkets, has signed on as a strategic retail partner with Takeoff Technologies.
To support its online grocery business in 2020, Big Y Foods has partnered with Takeoff Technologies to construct an automated micro-fulfillment center (MFC).
But the leadership team didn’t stop here in the US, Takeoff has many partners in other nations that have been using their solution in fulfilling the rising demand.
In May 2022, Takeoff Technologies announced the launch of its automated fulfillment center with Tienda Inglesa in Uruguay. One of Uruguay’s top merchants and the country’s pioneer in groceries e-commerce, Tienda Inglesa, has agreed to invest in Takeoff’s micro-fulfillment facilities across many locations.
In November 2022, the startup partnered with SMU to launch the first micro fulfillment center (MFC) in Latin America. With Takeoff’s eGrocery technology, a typical order of 25 items may be filled in five minutes of work. In order to allow customers to watch the robots in operation and learn how SMU is utilizing this technology to fulfill their online orders, SMU has installed a glass window between their retail floor and the MFC.
Takeoff now operates a number of micro fulfillment centers (MFCs), and more will be added in the upcoming months. Takeoff Technologies has received a lot of attention from the “big elephants” in its business as well as those grocery stores who wish to implement the micro-fulfillment method since it created the first automated micro fulfillment centers (MFCs) in the world.
The startup has partnered with more than 20 retailers and is seeing additional domestic and international partners to be disclosed in the near future.
Takeoff with “A Breath of Fresh AIR”
One such chance for cooperation came up when one of Takeoff’s North American retail partners said they wanted to improve the effectiveness of their micro fulfillment center’s assortment, inventory, and replenishment (or “AIR”) performance of their micro fulfillment center (MFC).
This is the reason behind the November 2022 introduction of Takeoff Technologies’ new strategy.
In order to offer an exceptional experience for customers, retailers needed to ensure that they were focusing on the right products, that all these products remained in-stock, that they were of the highest quality, and that they were fulfilled from the optimized area within the MFC.
Takeoff’s clients already had an amount of successful AIR initiatives in place. Retailers adopt this comprehensive approach to ensure that they were maximizing all of the opportunities available to them and that they could effectively communicate these opportunities to win over internal support and alignment.
The pandemic has seen the breakdowns of many entities, but some saw the chance and took it. Takeoff technologies has given out the solution that we needed during Covid. Even after the dark days, many customers will continue to use e-commerce for groceries after they’ve been vaccinated because they have developed new habits after a year of lockdowns and e-commerce is here to stay.
Rising demand means retailers must change the way they sell goods to adapt with customers. One way they’re looking to accomplish that is by allying with companies that make technology complementary to their automation systems. Takeoff has already been a reliable name in the market, it’s not strange if these retailers use the startup’s solution to transform the industry.