Is Putting Its System in Dark Stores, Expanded Back Rooms, Its Own 3PL Warehouses

For several years, some retailers have used “dark stores” – retail spaces in which they have closed a store but still own the lease – as efulfillment centers for on-line orders.

Supply Chain Digest Says... Fabrc is also building out its own network of facilities that will serve as third-party fulfillment centers for retailers or consumer goods companies. What do you say? Click here to send us your comments Click here to see reader feedback

Then just this past September, there were reports that the US' largest mall operator, Simon Property Group, was in discussions with Amazon to have the etailer move local fulfillment operations into now empty former JC Penney and Sears stores.

Tapping into this trend, an Israeli company now headquartered in the US called Fabric is trying to tap into this trend in a big way by providing so-called “micro-fulfillment” solutions that can be used in empty or reconfigured retail spaces to pick on-line orders.

Fabric was in the news this week, as the company said it has raised $136 million in venture capital to enable its planned growth.

Micro-fulfillment generally is associated with automated order picking systems that densely store a lot of product in a relatively small footprint, using a grid-like structure that delivers totes with products to be picked by humans and then placed into shipping containers.

Fabric's Chief Commercial Officer Steve Hornyak described Fabric's technology as being like a "giant vending machine" that uses robotics and AI and which can "flexibly fit in a number of different places" during an interview with the BusinessInsider web site.

Other providers of micro-fulfillment systems include Alert Innovation, Swisslog, Dematic and several others.

Fabric's system generally is deployed in small warehouses just 10,000-20,000 square feet, using a system that can hold up to 15,000 SKUs and which can process about 500 orders per shift.

Increasingly, the systems are going into dark stores.

(See More Below)

One thing that separates Fabric's approach from others is that in addition to installing its system into a retailer's own space, whether a dark store or an expanded back room in an existing store, the company is also building out its own network of facilities that will serve as third-party fulfillment centers for retailers or consumer goods companies.

One major customer, Business Insider reports, is FreshDirect, for which Fabric deployed its system in micro-fulfillment center in Washington DC.

The company says it plans to announce more partnerships with grocers and general merchandise retailers soon.

"Retailers are scaling back on the square footage that they have," Fabric's Hornyak told Business Insider. "The big-box guys don't need the entire square footage that they have, so why not leverage that in order to do e-commerce and click-and-collect?"

Whar are your thoughts on more focus on the space benefits of DC automation? Let us know your thoughts at the Feedback section below.