Technology has turned competition upside down and we like to say it is no longer the big that eat the small, but rather the fast that eat the slow. Start-up company CommonSense Robotics is moving in that direction as they seek to disrupt the already disrupted home delivery of groceries business. Keep in mind that it usually cheaper to order a pizza than to get delivery of fresh ingredients from a local grocery store. If CEO Elram Goren’s vision is fulfilled, we can soon expect to shop online, have the food delivered and it will cost less and be faster than going to the store itself. From what I understand Goren is creating “micro” fulfillment centers to be located near grocery stores which will be packed with products stacked in a 3-D cube of racks. Smaller robotic pickers will fill totes and deliver them to a human packer. I’m told the goal is to get a 20-item order ready in five minutes. Keep in mind, most retailers use larger remote warehouses to make it more efficient to fulfill online orders. The advantage for Goren is that he will benefit from paying a fraction of the rent, using less labor and doing it faster. If all goes well it should change the economics and allow quicker and cheaper home delivery. Interestingly, Goren believes it may also lead to people eating healthier. He feels that prices should come down for traditionally more expensive healthy food due to the savings he will provide. As I understand it, the company plans to work with local grocery stores who struggle to compete with other online delivery services like Amazon Fresh. The goal is for warehouses to be shared by multiple smaller stores who don’t have the capital to afford an automated warehouse of their own, and who also couldn’t make the economics work in a manual facility. Of course, each store is charged a small fee for each purchase. It would be easy to stay away from an industry that has Amazon involved, but I tip my hat to Goren and his team for re-defining the way goods are fulfilled and delivered within cities. In my opinion, it shows that there is always room for innovation, even in recently disrupted services. This creative approach to the “last-mile” of delivery and innovative robotics has allowed Goren’s future clients to offer true on-demand services. I’ll be keeping my eye on this one as they will open the first center in Isreal this year and are expected to follow that with a presence in the U.S. I suspect there is plenty of room to grow as the market for online grocery sales is expected to increase from 4.3% to 20% by 2025. (Source:fastcompany, tech crunch)
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