Online grocer FreshDirect announced today that it has partnered with Fabric to build out an automated, robotic grocery e-commerce facility in the D.C. Metro Area. This is the first public U.S. partnership announcement for Fabric.

Using a system of totes and racks, Fabric creates automated systems for shuttling grocery items around a warehouse to fulfill e-commerce orders. Fabric will be building out an existing 10,000 sq. ft. When it opens later this year, the new FreshDirect facility in which it will be able to process 500 1,000 orders per day. Each order will take just minutes to fulfill, enabling FreshDirect to have a two-hour delivery window for customers in the D.C. area.

While this is the first U.S. facility for Fabric (ne Common Sense Robotics), the company has two operational fulfillment centers running in Israel. Steve Hornyak, Chief Commercial Officer at Fabric, told me during a phone interview this week that his company has many more partnerships that will be announced soon, and that Fabric has seen a surge in demand.

We got thrust five years into the future, said Hornyak, adding that customers that had planned on implementing automation for e-commerce fulfillment in 2021 or 2022 are accelerating those timelines and starting the projects now.

There are 7.2 billion reasons grocery retailers are rushing into automation right now. The pandemic and subsequent stay-at-home orders pushed grocery e-commerce into multiple record-setting months in a row, hitting $7.2 billion in June. FreshDirect itself was hit hard in NYC during the height of the pandemic, at the beginning of the e-commerce surge, with delivery windows near impossible to get for most people. The inability to accept as many orders presumably translated into lost business for FreshDirect.

Hornyak said that the biggest issue for retailers Fabric is talking with is capacity. How do they increase the number of e-commerce orders they can fulfill? Doing it manual sort-and-pick is arguably unprofitable, said Hornyak. And while Fabric definitely has an incentive to bemoan the cost and speed at which humans move when picking items for an online grocery order, he has a point. Robots can just fulfill orders faster and for longer.

Thats why there are so many retailers investing in automated fulfillment. ShopRite and Albertsons both have programs with Takeoff Technologies, which builds micro-fulfillment centers in the backs of existing grocery stores. Walmart has a trial going with Alert Innovation. And Kroger is building out standalone automated warehouses powered by Ocados automation technology.

While we dont know what permanent impacts the pandemic will have on buying behavior, large swaths of consumers have now had five months of new habituation, including buying their groceries online. As more automation gets built out, theoretically, delivery and curbside pickup options will get faster, which will attract more consumers, and an automated virtuous cycle will be born.

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FreshDirect to Use Fabric's Robots for Grocery Fulfillment in DC Area - The Spoon