H-E-B Will Deploy Micro Fulfillment in Response to E-Commerce Rise

As more grocery shoppers use e-commerce, H-E-B is responding to that rising demand by installing automated micro-fulfillment centers (MFC), joining one of the hottest trends in food retail.

H-E-B will deploy equipment and software from Swisslog to support the retailer’s curbside pickup and delivery business.

Micro-fulfillment centers are designed to streamline online fulfillment and moving it closer to the customer. In this case, MFCs will allow H-E-B to efficiently meet the growing demand for curbside pickup without negatively impacting customer experience in the store.

Generally, MFCs are ideally meant to serve the e-commerce needs of a neighborhood, or another small segment of a particular area. They typically take up no more than 100,000 square feet, according to Mitch Hayes, vice president of e-commerce and retail for Swisslog Americas. An MFC is “designed to hold maybe 24-48 hours worth of inventory,” Hayes said “and is designed to eliminate the last mile (of delivery). It’s taking that massive distribution center and localizing the inventory.”

H-E-B's new micro-fulfillment centers feature AutoStore empowered by Swisslog's SynQ software and pick stations. This goods-to-person system offers flexible automation solutions available for order fulfillment in e-grocery where density, operator productivity and lead time are important factors. With more than 170 installations worldwide, Swisslog says it is the largest and most experienced integrator of the AutoStore system.

“COVID-19 and anticipated behavioral changes have created increased urgency around the need for automation within many grocery operations,” Hayes said. “E-grocery automation is no longer an option … it's a requirement for survival and continued growth.”

That may be a sales pitch, but there is evidence to support his words. According to Interact Analysis, food retailers plan to increase their spending on warehouse automation infrastructure by 20% each year over the next five years. You can bet much of that money will go toward MFCs, which come in various models, as food retailers deal with the operation demands of triple-digit e-commerce growth during the pandemic — and try to keep those trends alive well into 2021. New companies are entering the space to get an edge on a trend that promises to last well beyond the pandemic.

“Most people using curbside pickup will continue using it in some fashion” after the pandemic subsides, said Coleman Roche, vice president, sales and consulting retail, e-commerce Americas, for Swisslog. Home delivery interest might fade a bit, given the cost of the service, but e-commerce will remain strong in the food retail world. “The upswing is largely here to stay.”

With 400 stores in Texas and Mexico, San Antonio-based H-E-B is No. 17 on The PG 100, Progressive Grocer's list of the top food and consumables retailers in North America.