Winning The Local E-commerce Game In 1 Year, Powered By Finally’s SFC: The Super Duper case study
Super Duper case study: Winning The Local E-commerce Game In 1 Year, Powered By Finally’s SFC
Executive Summary:
10-to-10 is a local grocery retailer operating 3 stores, who had seen its sales stagnate in the past few years after shutting down its e-commerce operation due to negative unit economics. In 2022, within a few weeks, Finally launched for 10-to-10 an end-to-end, 4 temperature grocery SFC (Store Fulfillment Center) adjacent to one of its physical stores, which allowed 10-to-10 to gain immediate, and impactful growth.
The underlying technology achievement is being able to leverage low-cost AGV robotics while having AI supercharge the robotic operation to 3-4x higher productivity and pick rates compared to robotic OEMs figures, dropping the resulting cost-to-fulfill by about 80%
With Finally’s comprehensive software suite, even a Tier 2 grocery company with a basic ERP system became an instant e-commerce leader in its service area, overtaking the nation’s largest chains in e-commerce volume and value
The e-commerce business was launched under a new brand - Super Duper - and achieved rapid sales growth of 700% over the launch month, all in 1 year
The Challenge:
10-to-10 is a successful local grocery retailer which for 30 years had run stores within a suburban community, being known for convenience, assortment and service.
As more and more families turned to e-commerce for groceries, especially after Covid, sales growth had become a real challenge for the company.
At the same time, the company’s leadership knew the numbers didn't make sense for in-store picking of e-commerce orders, nor did he have the capital to invest in fulfillment technologies. The situation had left 10-to-10 out of the e-commerce game completely, losing market share to national chains.
The challenge was hence four-fold: to launch a (1) super low cost, (2) fully functional, connected to existing ERP, yet (3) very easy to operate and (4) all in a tiny footprint, allowing the local retailer to not only enter the e-commerce space, but to win it.
The Solution:
Leveraging Finally’s comprehensive software and AI system to launch a one-of-a-kind robotic SFC for 10-to-10.
Dense: The world’s smallest footprint, 4 temperature zones, full basket grocery SFC
Complete: A true end-to-end software and hardware solution, from consumer app, OMS, WMS, WCS, TMS, AI, multiple AGV types, work stations, dispatch zone - everything included out-of-the-box
Super low cost: the technology costs represented 1.5% of the GMV capacity, while labor efficiency kept labor costs at 3% of the GMV
Easiest to operate: ran by 3 junior employees without requiring leadership on site, receiving a 10 hour training program
Key SFC characteristics:
Delivery SLA: on-demand, same-day or next day delivery as well as pickup
Assortment: 5,000 SKUs stored across chilled, ambient, fresh and frozen areas
Stations: 3 pick stations
Throughput: up to 18,000 items fulfilled per day, in 2 shifts
The software stack includes the functionality of 8 comparable software systems, all powered by AI and Machine Learning models to step-change productivity.
OMS - order management software
WMS - warehouse management system
Catalog - product and pricing catalog
WCS - warehouse control system
WES - warehouse execution system
IMS - inventory management system
TMS - transport management system
Consumer App
Finally’s software stack was seamlessly integrated into the retailer’s ERP, as well as EDI, GS1, Customer Support software and more
The SFC consists of 7 functional areas:
Receiving and decanting area
Fresh and bulk products area
Chilled chamber with bin-to-person robotics
Frozen area
Ambient area with pod-to-person robotics
Merging and consolidation flow
Dispatch area
The SFC map:
The robotic hardware leveraged is a rare mix of two vendors under one, small roof.
Ambient - Pod-to-person (in bins or without bins), mobilized by 24 Kiva-like AGVs
Chilled products - stored in bins and mobilized by 3 bin-to-person AGV
The results:
Commercial
10-to-10 became the #1 grocery delivery player in a service area of over 100,000 people in less than 1 year!
Sales grew by 700% from launch month in the year since it launched.
10-to-10 is currently looking to expand the model and is leasing real estate to build Finally SFC #2
Average orders of 40 items, 24% fresh, 26% chilled
Financial
Every order fulfilled at the SFC was profitable, as total cost to fulfill including tech and labor was less than 4% of GMV
Capital payback time was approximately 12 months
Operational
The SFC is operated daily by a team of 3 junior associates without prior experience
Perfect order - average “on time, as ordered” rate of over 90%
Stock availability rate of over 99%
Despite its small footpting, the SFC deployed robotics to support every single operational process, including decant, storage, pick and pack, consolidate, merge, stage, dispatch, quality control and more
Technology
The SFC showed an average system uptime of over 99%, and was able to keep maintenance
The testimonial:
Moshe Musalem, Super Duper SFC manger, said:
“After 15 years in grocery e-commerce, I know 2 things can kill you: people and margins. I’ve been running Finally’s SFC for the past year and a half. Being able to run such a powerful site with only 3 junior associates, and see operating margins as high as 10-15%, are almost unbelievable achievements. This SFC is the power behind our massive growth. We couldn't have done this without Finally.”
Summary:
A grocery SFC have a near impossible task, of being small footprint, low cost, easy to operate, scalable and robust all at the same time.
Any grocery retailer who strategically wishes to leverage the store network for an omni-channel operation can benefit from AI-powered SFCs that drop fulfillment costs by up to 80% and can easily fit back-of-store spaces. Finally's SFC products deliver on that formula exactly.
