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Micro Fulfilment Centres
Join Andrew Grant and Darren A. Smith in the seventeenth episode of Grocery Guru discussing micro fulfilment centres and the 15-minute ordering window. A new breed of start-ups competing with Amazon to take your order and deliver within 15-minutes.
You Can Read the Full Micro Fulfilment Centres Episode Transcript Below:
Darren A. Smith:
Hello, and welcome to week 17 of The Grocery Guru. We’re here with Andrew Grant. Andrew, how are you?
Andrew Grant:
I’m very good. I’m glad to say spring is in the air by the looks of your shirt, Darren.
Darren A. Smith:
We had a chat a few minutes ago and he mentioned Laura Ashley and a few other demeaning things. I just passed it by. This week Andrew, I understand deliveries that get in your goat. And we’re going to talk about deliveries.
Andrew Grant:
Yeah. It’s just something that struck me and I’m slightly worried whether it makes me come across as a dinosaur. Which is the very last thing. But, you know when we talked a lot about data and insight and following the shopper over the last, what, 16 episodes? And I saw something at the weekend, which I just thought, do shoppers really want this? And obviously, as you always know, when you do any form of market research is you got to be very careful at leading the witnesses.
Darren A. Smith:
Very true, very true.
Andrew Grant:
You take a classroom of seven-year-olds, and you say to them, “Would you like jelly and ice cream for your lunch every day?” What answer are you going to get?
Darren A. Smith:
Well, actually that reminds me, Henry Ford was famous for a quote. He wasn’t talking about cost and the grids, I’m sure they didn’t have them back then. But he basically said, “If we’d asked them what they would have wanted, they would’ve said faster horses.”
Andrew Grant:
Yeah. Okay. Okay, well, it’s sort of linked to that. What it is, it was in the Sunday Times. And it was talking about a couple of startups in London with some pretty serious private equity money behind them and very bright young people running it with McKinsey backgrounds and what have you. Offering, get this, 10-minute grocery deliveries in the city of London.
Darren A. Smith:
Ten minutes?
Andrew Grant:
Yeah, 10 minutes. I don’t know if you’ve heard Getir and Weezy.
Darren A. Smith:
So Get Here as in get here. Those two words?
Andrew Grant:
Well its G-E-T-I-R Getir-
Darren A. Smith:
Oh, I see.
Andrew Grant:
And Weezy.
Darren A. Smith:
And how do you spell-
Andrew Grant:
W, double E, Z-Y. So if you’re lucky enough to live in Fulham, Clapham, those sorts of postcodes, you can get groceries delivered in 10 to 15 minutes. I’m not sure if anybody is that desperate for anything, although, think about it. I suppose you get home, you’ve run out of toilet paper, you’ve run out of coffee, you run out of beer. Are you that desperate for something in 10 minutes that you’re willing to pay between 1.99 and 2.99 delivery charge for, and also potentially obviously pay significantly more than supermarket prices. I’m not sure. It reminds me, if you think back to 24-hour shopping, it was heralded as the ultimate convenience. You know, people can go and wander around in their slippers at three in the morning and shop and it lasted for what 18 months?
Darren A. Smith:
Yeah. It wasn’t long. And I’m all for a push towards convenience and Amazon’s really helped us with that. I’m not sure about getting down to a 15-minute slot. I’m sure some people will want it. I guess it depends on how much it’s going to cost.
Andrew Grant:
Yeah. And the thing is you know, these startups, will they have the economies of scale? So the very first of these, we talked about the urban fulfilment centres the Tesco are converting some of their stores to, that’s mass scale picking. These guys are, one of them is actually renting railway arches under Clapham station to be micro fulfilment centres.
Darren A. Smith:
Micro fulfilment centres. I don’t think I’ve ever heard that term before.
Andrew Grant:
Nope. So micro fulfilment and you know, the equivalent, it’s working big scale with the UberEats and the Deliveroos and the Just Eats are opening these dark restaurants where, you know, all the food you take away is not made in a takeaway restaurant it’s made in a purpose-built dark restaurant, a dark catering facility. It’s sort of the equivalent thing that, you know, these startups don’t have shops. They have these micro fulfilment centres, but the costs versus the volumes, I struggle to see how it can work. But if you’ve got people with McKinsey backgrounds and gazillions of private equity money flowing in there, they can’t be stupid.
Darren A. Smith:
Well, they can’t. But I mean, can they compete? They’re going to see the likes of Amazon with their windows, which are so tight now.
Andrew Grant:
Well, maybe Amazon’s of the past. I mean, good gracious. Amazon will take a whole day to get to you. It’s outrageous.
Darren A. Smith:
I remember when I was a kid, I ordered clamps for my bike and it took 30 business days.
Andrew Grant:
Yeah. I mean, I’ve got a bit of a dispute guy on Amazon, I ordered a cordless drill and it didn’t turn up for three days and I am incensed. But you’re absolutely right. 15 years ago, 28 days, you would wait until you thought, oh, the parcel hasn’t arrived yet, shall I write a letter and find out where it’s gone? So yeah, these tech companies are victims of their own shopper offering. You know-
Darren A. Smith:
How do you think the supermarket’s going to react? So they’re going to think these guys are micro. We’ll wait till they get bigger before we get too worried. Are they going to look at them and begin to offer different types of delivery slots in the country?
Andrew Grant:
Well no, it’s very interesting. Because obviously the big guys, the big sheds have benefited from people in lockdown, moving to more weekly delivered. We’ve talked about it a lot. The people who have struggled, they’re actually the convenience stores. And in particular, Co-Op is embracing this micro fulfilment. So, Milton Keynes, you place an order with co-op and it turns up in a little wheeled buggy.
Darren A. Smith:
Yes.
Andrew Grant:
They’ve got these laser-guided wheel buggies, that the local kids just love to use for football practice. So Co-Op is embracing it. You can order via Co-Op via I think Deliveroo.
Darren A. Smith:
Yep. Yep.
Andrew Grant:
But again, it’s just one of these things that, can you make the economics work and will it last, I think it’s like 24-hour trading or get this, have you still got your 3D glasses for watching sky sports?
Darren A. Smith:
No, no, it’s there, but it’s pretty big glasses.
Andrew Grant:
Yeah, but how do these things quietly disappear? 3D television was a massive thing until, you know, and I’m sure in consumer groups, people were asked, would you like the idea of 3D television where things jump out the screen from you. But then people discovered they look like complete idiots wearing these horrific glasses to watch telly in their own lounge. And it’s amazing how they just quietly disappear, you know, there’s not a big announcement, we’re stopping 3D TV, we’re stopping 24-hour opening. They just quietly disappear. And I think this micro fulfilment and 10-minute orders, I think it will quietly disappear, but I’ll be proved wrong.
Darren A. Smith:
I think there’ll be a certain, of course, there’ll be a certain amount of the population that wants it. I think that will be very small. One can imagine people wanting to bring in booze for a party maybe, but why would you want a 10-minute slot? We’ve got friends come around, I can order. I guess it also depends on what the lead time is. Now, if I’ve got 10 minutes here on a Thursday, do I need to order on a Wednesday the day before, can I order four hours ahead? How far is it?
Andrew Grant:
It’s now quarter past four on a Thursday. I will expect the delivery will be with me at 4:30. I will go on the app. Now the delivery will be with me in 15 minutes.
Darren A. Smith:
Oh, I see. I really misunderstood that, I thought you said the windows had come down to 15 minutes.
Andrew Grant:
No, that is why, as I said, I can’t quite get my head around it. Weezy says your delivery could even be delivered by a guy or a girl on roller skates.
Darren A. Smith:
Oh, I see. So we’re talking groceries at the pizza time. Get your pizza and 20 minutes. Probably can get all your groceries in 20 minutes.
Andrew Grant:
That’s exactly. So sorry you missed this. And maybe that’s a very telling point. So if you like left field for you, because I can’t get my head around wanting anything in 15 minutes and be willing to pay for it.
Darren A. Smith:
I think the only reason I do it would be to test it. Can I get it here in 15 minutes and 39 seconds? Yeah, okay. All right, so the term coming out of here is micro fulfilment centres. I’ve never heard of that, but we’ve got two startup companies we need to be aware of. One is Weezy and One is Get here, Getir.
Andrew Grant:
Getir. G-E-T-I-R. Getir.
Darren A. Smith:
Okay, we’ve got that. We’ve spoken that it might be a passing fad, we’ll see. Okay. And we talked about dark restaurants as well, delivering, catering services. Okay, all right.
Andrew Grant:
You know, you would think, Tesco pretty much at the forefront of everything all the time. They haven’t gone into this. So we will wait and see. I’ll be very interesting to be proved wrong. And given where I live in the middle of nowhere, it’d be interesting to see somebody get to me in 15 minutes, but who knows? Maybe that’s the sound of the drone outside now.
Darren A. Smith:
Brilliant Andrew, thank you for bringing that to us. I never knew any of that. And particularly getting down to 15 minutes. I’m glad I actually understood. It’s all good now. 15 minutes time. Wow.
Andrew Grant:
Google Weezy.co.uk or Getir, have a quick look at their websites now.
Darren A. Smith:
Brilliant. All right. Andrew, thank you, until next week.
Andrew Grant:
No problem. Take care.
Darren A. Smith:
Take care. Bye.
Andrew Grant:
Bye.
