Why Micro Fulfillment Centers (MFCs) Still Matter With Dematic & Tesco's Transcend Retail Solutions | Spotlight Series
Is microfulfillment still a viable strategy? In this new Omni Talk Spotlight, Chris and Anne sit down with Oliver Vogt, CEO of Tesco’s Transcend Retail Solutions and Danielle Dakin, Dematic's Market Development Director, to unpack everything happening with MFCs.
Danielle explains how pandemic-driven hype distorted expectations (6:00), while Oliver lays out why volume and operational simplicity are the true keys to success (9:54). They discuss the threshold for MFC success (~500 orders/day) (11:00), why omnichannel flexibility matters more than ever (16:00), and how Tesco’s model could fit the US grocery landscape better than you think (24:00).
Plus, the duo shares how you can schedule tours of Tesco's live MFC sites in the UK to see the future of grocery fulfillment for yourself (34:00)!
#Microfulfillment #ecommerce #retailnews #retailstrategy #retailinnovation #TranscendRetail #Dematic #tesco #MFCs #UrbanFulfillment #automation #grocerydelivery
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Transcript
Foreign welcome to the latest edition of the omnitalk Spotlight series, the series that highlights the people, the companies and the technologies that are shaping the future of retail.
Speaker A:I'm one of your co hosts for today's interview, Chris Walton.
Speaker B:And I'm Anne Mazenga.
Speaker A:And today we are bringing you back two guests from two different companies, each of whom we have interviewed on separate occasions previously.
Speaker A:And they're going to help us dig into the topic of micro fulfillment.
Speaker A:Is micro fulfillment a dead concept or is it a concept that still has legs?
Speaker A:Will the jury still be out?
Speaker A:At the end of this conversation, we will let you, our loyal omnitok listeners, be the judge.
Speaker A:So to help us answer that question.
Speaker A:Yeah, I know, right answer.
Speaker B:So ominous, Chris.
Speaker A:I know, right?
Speaker A:Tease it a little bit differently this time.
Speaker A:So to help us answer that question, it is with great pleasure that we introduce Today's guest, the CEO of Transcend Retail Solutions, Dr.
Speaker A:Oliver Fot and Dematics Market Development director Danielle Dakin.
Speaker A:Welcome both of you to Omni Talk.
Speaker A:It's great to have you.
Speaker C:Thank you very much.
Speaker C:Thanks for having me back and likewise.
Speaker D:Thanks for inviting me back too.
Speaker B:We're so excited to have you both.
Speaker B:Thank you so much for making the time.
Speaker B:I love just for people who are catching this interview with each of you for the first time, maybe let's just start with each of your backgrounds and your a little bit about each of your companies.
Speaker B:And Oliver, I'll start with you and specifically go into what Transcend Retail Solutions is, if you don't mind.
Speaker C:Oh absolutely.
Speaker C:So look, I've been with Tesco for the last nine odd years and previously have been similar lengths of time with Amazon by trade.
Speaker C:I'm a statistician, something, you know, which you sometimes try to hide.
Speaker C:But I fall in love with retail a long, long time ago.
Speaker C:Right.
Speaker C:And it's always kind of retailer at heart.
Speaker C:Now in my latest role now I run Transcend Retail Solutions.
Speaker C:We are a company fully owned by by Tesco in the uk.
Speaker C:We have the mission to bring the tried and tested solutions which Tesco has developed over the many, many years to the rest of the world.
Speaker C:And we do so in, in retail e commerce particularly where we've got a bit of, you know, a history.
Speaker C: Tesco.com launched in: Speaker C:And ever since it's done probably as many mistakes as one can and we want to just make sure no one else has to go through the same pain and want to share what we've learned during the time with, with others.
Speaker B:That was pretty new thing kind of creating a company outside of a retailer.
Speaker B:Right.
Speaker B:I mean, tell us a little bit about that origin.
Speaker C: I said, Tesco.com started in: Speaker C:And UK is very much in the space of online shopping is just something which is deeply ingrained in the British culture.
Speaker C:And so the online part of Tesco has been growing for, for many, many years.
Speaker C:And it kind of makes sense to, to bring this out of a, you know, of an over 100 year old retailer as a new idea to provide these kind of services.
Speaker C:So it is something we only done very, very recent because we just want to make sure we've done all the learnings.
Speaker C:We came out of COVID and thought now is probably a good time to do this.
Speaker B:Yeah.
Speaker B:Right.
Speaker B:Okay.
Speaker B:Well Danielle, let's go to you.
Speaker B:Tell us a little bit about Domatic and how you kind of fit in here in this whole mix.
Speaker D:Dematic, which is a global organization that designs, integrates, but also supports automated solutions across the, the supply chain spectrum.
Speaker D:And we work across many different industries and Grocery is just one of those.
Speaker D:You know, we work with the wider retail markets, industries like food and beverage, third party spare parts, and that's just to name a few.
Speaker D:Really?
Speaker D:Yeah, yeah.
Speaker D:I actually came to Dematic from being a customer with a 3 PL, Kuda and Nagel, and I was actually responsible there for integrating technology to drive improvements.
Speaker D:So it was a real natural step in my career to come to Domatic as well.
Speaker D:But the interesting thing is that it's given me such an appreciation for many of the challenges that our customers face, but also, you know, insight into opportunities for ways of doing things better.
Speaker D:So that really gels so well into the role that I do today at Dematic, which is Market Development Director.
Speaker D:It does sound like a big title.
Speaker D:But what it is really in a nutshell is about staying on top of those markets that I talked about earlier.
Speaker D:And I specialize in, well, grocery, which absolutely makes sense, 3 PL and retail.
Speaker D:And it really is about knowing what our customers want in those markets that we can help them as best we can.
Speaker A:So let's get to the topic at hand here then.
Speaker A:MFCs.
Speaker A:You know, so essentially, Oliver, what I take from you is Transcend.
Speaker A:Transcend is basically Tesco's play to take what they know about running an MFC and take it to the marketplace.
Speaker A:Right.
Speaker A:So, you know, the concept Overall, the mfc, the micro fulfillment center, it's had many starts and stops over the past like literal decade.
Speaker A:Now at this point, I think Ann and I've been doing this for eight years and we've been talking about it since that time.
Speaker A:And even our very first sponsor of the show, Takeoff, they shut down shop recently.
Speaker A:Like they basically closed up.
Speaker A:They're like, you know, we're not going to be able to make this work.
Speaker A:So.
Speaker A:So Danielle, how do you separate fact from fiction for us around MFCs in the current state of the market?
Speaker D:Yeah, okay, so I guess firstly for anyone listening that doesn't know what micro fulfillment is.
Speaker A:Yeah, good point.
Speaker D:Is basically a small warehouse that can be in the back of a store, below it, above it, or even somewhere close by.
Speaker D:So just so that people are aware, separating fact from fiction.
Speaker D:Well, you know, there is no getting away from the fact that, you know, there have been some failures in the market, but there have also been some successes.
Speaker D:And Tesco is a real prime example of that success.
Speaker D:Now, part of the reason for the success, and I'm sure that Oliver will go into more detail about this is that, well, firstly, you know, the order volume was there and secondly, you know, there was a focus on making processes more efficient to be more profitable.
Speaker D:Now, from an E Groceries market perspective, market share is actually growing.
Speaker D:If we go back, let's say, to Covid times, you know, when we saw a real spike in volumes and people got really interested in micro fulfillment because of those volume spikes and we saw something incredible like 5 years growth in a real short period of time.
Speaker D:Okay.
Speaker D:Now since then, you know, the volume within that market has really normalized over the past few years.
Speaker D: % in North America to: Speaker D:Now, the lion share of that growth is going to be kind of between E Grocery, but also the discounters in that market.
Speaker D:So it's going to be really important for grocers that are competing in that space, you know, to win market share from discounters, let's say.
Speaker D:And so making that online process efficient and profitable should really be the strategic focus going forward.
Speaker A:So Danielle, let me ask you a question on that.
Speaker A:So if I read into what you said is the reason we're seeing the starts and the stops, the fact that maybe people got a little bit ahead of themselves seeing the growth in online during the pandemic and then as things have pulled back or kind of Normalized to new levels.
Speaker A:They've said, oh man, maybe we went too fast on this or maybe we didn't understand our volume base.
Speaker A:And now we do.
Speaker A:And so now we can take another look at a micro fulfillment idea.
Speaker D:It's actually a bit of a mix.
Speaker D:So yeah, volume has definitely been the driver, but there's also the customer behavior side of things.
Speaker D:So when the volume surged and there was a lot of online shopping going on, grocers needed to deal with that somehow and win that market share as well.
Speaker D:But also equally, over the past few years, customers have been deciding how they want to shop and across which channels.
Speaker D:So for example, I am probably a grocer's nightmare as a customer because I shop across all the channels.
Speaker D:So I shop online, I go in store, but I'll also shop at a convenience and at a discounters.
Speaker D:Okay.
Speaker A:Right.
Speaker D:To be profitable in grocery, you've got to keep hold of that customer across every channel that they're shopping in so that you keep them profitable within your, your brand, if that makes sense.
Speaker C:Yeah.
Speaker D:So over the past few years, if people have been trying online across different grocers, they've been going back to store and that's what settled is.
Speaker D:Their behavior has settled the volumes.
Speaker B:So I mean, Oliver, I want to go to you next.
Speaker B:I mean, Danielle did a really good job there of just kind of giving, setting the table of like, you know, how the, how grocers have had to be more adaptable given kind of the changing consumer demands when it comes to E grocery.
Speaker B:But I'm looking specifically from, from your point of view, from Tesco and Transcend, and given the current state of kind of the E grocery market, what, what then has to be true inside of a retailer for micro fulfillment to work?
Speaker C:As Daniel already said, first and foremost, volume comes to mind.
Speaker B:Right.
Speaker C:You're building a piece of automation, let's say, in the back of a store.
Speaker C:And it has previously always been hailed, you know, as great for productivity, which it is for sure.
Speaker B:Yeah.
Speaker C:But you need to be able to utilize these machines to the greatest extent possible.
Speaker C:And the more you utilize, the more thus this investment makes sense.
Speaker C:And I think one of the mistakes previously always has been that, you know, people see great productivity coming out of these, but you, you don't use it well enough and not for long enough, and then the total cost of these things goes up, are questionable.
Speaker C:So rule number one for me to make micro fulfillment work is always volume.
Speaker C:Make sure you're using the right solution for your problem.
Speaker C:It means if you, if you have that volume or you're expecting that volume, then this is a very, very good conversation to have.
Speaker A:Now Oliver, before you move on, I'm curious.
Speaker A:Is there a hurdle of volume like, is there a benchmark volume like number of orders per day?
Speaker C:Yeah.
Speaker C:We would usually think about is something in the region of 500 or so orders.
Speaker C:And it depends on the market.
Speaker C:Some markets with higher labor costs, lower labor cost, you know, labor availability.
Speaker C:Look, it's not all about cost.
Speaker C:You know, sometimes question of automation is also just simply the availability of people to work in manual processes.
Speaker C:Right.
Speaker C:So whilst we usually go with that number, there is, there is, you know, a blurred line in this for what the reality of your personal case might be.
Speaker C:But that's where they start to make sense.
Speaker C:That's what you know when from, if you start from a reasonable good base in your manual operation, you start to really, really make a business case work in these cases.
Speaker A:500 okay.
Speaker C:Yeah.
Speaker C:And the other thing which I always think needs to hold true and you make references to, you know, to, to the reputation Micro Fulfillment has on and off in the market over many, many years is, you know, then they weren't easy to utilize.
Speaker C:These, you know, these solutions were pretty hard to, to learn to run.
Speaker C:People get the automation that the hardware usually works, that's fine.
Speaker C:And I think about this as the fact that of course you need to have great automation.
Speaker C:Absolutely.
Speaker C:But if you forget about the end to end and embedding of this hardware into your processes and into a stores environment, then things usually struggled.
Speaker C:And I think that is one of the biggest drivers to, even if you've got the volume to get these things off the ground has been the fact that you're putting this into a store in a retail environment.
Speaker C:People have been working there, you know, very mixed, different backgrounds, just, you know, as a nature of it and as we want it to be.
Speaker C:But you know, I always describe it as some, as a puzzle piece.
Speaker C:Right.
Speaker C:Automation is one piece of the puzzle.
Speaker C:You will need that.
Speaker C:And that is absolutely important.
Speaker C:But if you don't have the right processes behind it, for example, retail processes are very specific.
Speaker C:You talk about waste, you talk about inventory holding, you talk about replenishment, date, code, all of those kind of things which are very specific for grocers.
Speaker C:These things are not necessarily straightforward, then you're missing another piece.
Speaker C:So processes are very important.
Speaker C:The right software with this is really, really important software.
Speaker C:The point of grid software is to take decision making to the next level to make it easier for humans to make the right call Whether that is insights, whether that's decisions on how the business needs to be steered, do you need to meet people around?
Speaker C:How do you do this operationally day to day up to how do we broadly do it as a business at a much, much higher level?
Speaker C:Having the right decision making aids, having the right insights is another big puzzle piece.
Speaker C:And the last one for me next to automation, process and software is always the people.
Speaker C:Quite often the people got forgotten in this.
Speaker C:Right.
Speaker C:And, and we talk about automation, but automation is used by people and steered by people and operated by people.
Speaker C:And you know, people are in and around the heart of this engine.
Speaker C:And if you're not clear on what roles you need, if you don't train people, if you don't empower them, if you don't simplify things for them sufficiently, then that's difficult.
Speaker C:And that's where we think like being there and bringing people all the way to the journey that until it becomes business as usual is ultimately critical.
Speaker C:That's why end to end is as important than having, you know, enough volume to actually make sense out of these machines.
Speaker B:Yeah, Chris, I think that really, I love that you said that, Oliver, because Chris, it just reminds me that, you know, I think people put this in as this is a, this is a solution.
Speaker B:We're just going to put in the automation, we're going to hit, hit, go.
Speaker B:And it's very much a constantly evolving process as you train people to do this.
Speaker B:As you're, as Danielle was saying, as your volume increases or decreases and you're kind of adapting to just how quickly customers are changing their, their behaviors and then the operations on the backside at the grocery retailer as a result.
Speaker A:Yeah.
Speaker A:And to that point I was hoping, you know, Danielle could add some color on that too.
Speaker A:And because that, you know, she mentioned in her, on her opening too that the other thing that's happening is people are shopping differently.
Speaker A:So like the autumn, the, the micro fulfillment center might be facilitating E commerce orders, it might be facilitating buy online pickup orders, it might be facilitating third party pickers to come to the store and pick up orders like.
Speaker A:So Danielle, how does, how do all those different consumer preferences play into what Oliver said as well in terms of the success or the puts and takes with micro fulfillment working?
Speaker D:Yeah, I mean all of those are super important.
Speaker D:You know, the customer buying behavior is really driving how grocers really need to be thinking and ultimately I think then the something like micro fulfillment becomes a real strategic decision for an organization.
Speaker D:You know, if they're looking to boost that profitability you know, improve their bottom line by encouraging a more loyal customer.
Speaker D:They've really got to think about the ways that the customer likes to shop.
Speaker D:And as you said, Chris, you know, they might order online and pick up in store and whilst they're in store they might buy some extras, you know, and, or they might just simply sometimes order online.
Speaker D:So the challenge is how to really frame that journey for the customer strategically so that it is seamless for them.
Speaker D:And you've probably heard about, you know, the buzzword omnichannel, you know, and that's, that's a real thing and it's something that certainly grosses.
Speaker D:But also wider retailers need to consider as part of their future strategy in the next five years because consumer behavior is really driving that customer loyalty.
Speaker D:And if retailers don't jump on that and really satisfy those needs, you're going to miss out.
Speaker B:Well, and Danielle, once people made the investment in the, the physical automation hardware, I mean, Oliver mentioned software updates.
Speaker B:Like, is that what retailers are doing in this situation is they're like, they're just tweaking software to kind of help them adapt and change to those behaviors or, I mean, how does that kind of work?
Speaker B:How do, how are they adjusting to that in real time in the back of house?
Speaker D:Yeah, I mean, Oliver will probably tell you a bit more about how the retailers are using the data behind the scenes.
Speaker D:But certainly automation like micro fulfillment can give you a certain level of statistics on the order profiles, etc.
Speaker D:But at the end of the day, what the grocer needs is that end to end data on the shopper's behavior through all of those different channels.
Speaker D:So quite often retailers can just keep warehousing data separate, retail in store data separate.
Speaker D:But what's needed is that real umbrella system to be able to extract all of that good information, not only to learn about customer behavior and what they need going forward, but to actually understand how you can continue to improve your operations.
Speaker D:So you probably heard like continuous improvement roadmaps and actually, you know, to really get benefits on your bottom line and save money over the years, you've got to be continuously improving your operations and find better ways of working.
Speaker D:And that's exactly what Tesco has been doing, you know, with having the automation kit in, they've been, you know, really working with it to get the best out of it.
Speaker A:Yeah, but at the end of the day too, I mean, it's not just software.
Speaker A:I mean, there's a lot of physical infrastructure questions that come into play here and software capital perspective is a lot Less expensive than the actual automation, the redesign of the buildings to make this work.
Speaker A:Depending on all the different dynamics you have to play from the consumer standpoint, is this for delivery, is it for pickup, you know, et cetera?
Speaker A:What, you know, what are the dynamics of the building where you're going to put this?
Speaker A:But so Oliver, to that point I want to press you a little bit more.
Speaker A:You gave us a hurdle.
Speaker A:You said basically 500.
Speaker A:You got to do 500 orders basically in a market or from a store to make this work.
Speaker A:So, um, you know, but for the executives listening, why do I, given all the dynamics at play here, why should I invest in a micro fulfillment versus sortation centers?
Speaker A:Just having third party pickers do the picking, just having my own employees do the picking from the shelves.
Speaker A:You know, basically relative to all the, all the other options out there, why should I invest in MFCs?
Speaker A:Or is that, you know, another way?
Speaker A:I could ask myself that question too.
Speaker A:Is that the wrong question to begin with?
Speaker A:Because it's not really an either or situation, I'm guessing.
Speaker A:But you, what do you think?
Speaker C:I think it's a very good question.
Speaker C:And I mean when you think about these degrees of investment, for me the question always is how wrong can I be and still be right?
Speaker C:And that is these are financial investments and things will change, right?
Speaker C:You know, they will turn out differently.
Speaker C:The markets are so dynamic and speed is one of these which always comes to my mind first.
Speaker C:Speed of delivery, expectation of customers.
Speaker C:You know, everything gets faster and faster.
Speaker C:You know, these dynamics are real and things shift around.
Speaker C:And that way is where I think that one has to just think about this in a way that making these investments needs to be flexible enough so that they work for many different outcomes and still be the right, you know, the right solution.
Speaker C:So if you look at how, how Tesco goes about this automation in the UK, we still pick about 85% of all our volume manually in store.
Speaker C:And that's, you know, for many, many regions is 100 the right decision to do.
Speaker C:You're close to the customer so you can still be very quick, right?
Speaker C:You can reach them same day, next day, all of these things work.
Speaker C:We have a, you know, the Tesco Bush proposition, which as you know, a small basket immediacy offered to customers from as little as 20 minutes.
Speaker C:Now these are very different things and of course there is ways to automate these things.
Speaker C:But if you do that at scale across the country to reach every area, not one size fits all.
Speaker C:And I think that's one very, very important Thing in this, you consider a topology, a network of, of the stores of these fulfillment solutions, then there is a case for manual operations.
Speaker C:There is a case, you know, in Tesco's example for standalone buildings, we have, you know, six of these in and around London, but simply we don't have enough stores to fulfill all these orders manually.
Speaker C:And you know, London is a different thing, right?
Speaker C:London is a very high density city with very different customer behaviors in many ways and also many different competitors in this space.
Speaker C:However, we, we do think that micro fulfillment is a great thing in between.
Speaker C:Right.
Speaker C:It, it is allowing you, because of its moderate micro size still to be close to the customer.
Speaker C:So you have these great benefits of not only speed but also the cost of reaching the customer is still, you know, as, you know, as small as it would be if you, if you pick still from storm.
Speaker C:But you get the efficiencies you get out of these bigger buildings because that's what this automation breaks.
Speaker C:And I do always love the notion of, you know, balancing the best of both worlds.
Speaker C:And in actual fact these big boxes struggle with the final mile.
Speaker C:And I think that is a, you know, a great way to think about this.
Speaker C:It's a nice hybrid.
Speaker C:It sits firmly in the middle.
Speaker C:The Tesco word for MFC when we started this is actually ufc, we call them Urban Fulfillment Center.
Speaker C:The word MFC was, wasn't around when we started this few years back.
Speaker C:Wasn't, wasn't quite set to that standard.
Speaker C:And, and it just describes where we think these things are a great use case.
Speaker C:Not all size cities and you know, countrysides will fit this type of solution, but it is going into the middle, middle to larger cities, into urban areas where these things are great solutions for.
Speaker D:Wow.
Speaker A:So okay, so that surprised me.
Speaker A:So you actually like the moniker Urban fc.
Speaker A:So how does that translate to the US market then?
Speaker A:Because I would think it would still be more just from the statistics point of view being more about where do the conditions meet, what's required to make these successful.
Speaker A:So how do you think about the urban dynamic then when you start thinking about transcend and coming over to U.S.
Speaker C:Yeah, the U.S.
Speaker C:i mean there's quite a lot of big boxes out there in the US But I think traditionally the US lends itself based on the household density to these smaller entities.
Speaker C:Right.
Speaker C:Simply by the fact that they are more contained, they fit into a store, they fit next to a store, they fit into a car park, but you don't have to drive so, so far away, which particularly in the US is a big question.
Speaker C:Right.
Speaker C:You've got too much capacity in one place.
Speaker C:The next town city is quite a long way or away often.
Speaker C:Right.
Speaker C:And that's where this solution, I think is actually quite, quite helpful.
Speaker C:Now again, there might be places which don't have enough volume in a manual solution is the right thing.
Speaker C:There might be one of these mega cities where you could have two or three or four of these micro fulfillment sites and still have it nicely balanced, more resilient.
Speaker C:You know, I think it is a great solution for the U.S.
Speaker C:many cities in, you know, in Europe, for example, a great possibility for this.
Speaker C:And that's where, you know, we see, if you look around and we see what, what works.
Speaker C:That's where we see most of these working best because of the conditions of environments of where they sit in.
Speaker B:That makes sense.
Speaker B:And Danielle, I mean, I'd love to hear your perspective based on kind of the use cases that Oliver just outlined.
Speaker B:And if we buying into this theory that, you know, MFC still have a place in the market, why has Domatic decided to link up with Transcend and what kind of, especially as you're thinking about coming into the US market, what are you uniquely kind of positioned to help support as Domatic in this partnership?
Speaker D:Yeah, definitely.
Speaker D:I mean, you know, Domatic partnered with Tesco to install, I think it was nine micro fulfillment centers in the UK using our shuttle technology.
Speaker D:So, you know, that's a real success story in the grocery industry.
Speaker D:And you know, grocers can achieve pick rates with our equipment of up to something like 700 items per hour for about 900 orders a day.
Speaker D:And whereas in a manual pick operation, let's say in store, you might be achieving at best something around 190 items per hour for around the 500 orders a day that Oliver mentioned earlier.
Speaker D:Now, you know, Domatic does want to continue to partner with Tesco through Transcend because, well, you know, we believe that the solution, combined with Tesco's experience in using the automation can really make an impact to a grocer's bottom line, you know, and that's part of the work that we do is supporting, you know, our customers across various industries to solve for their problems, their pain points.
Speaker B:Right.
Speaker B:And just having Oliver's expertise that he shared already in this podcast, Podcast too, as helpful as, as so many grocers, especially here in the US are really trying to struggling to figure that out.
Speaker B:Oliver, anything that you would add about the partnership that you think kind of makes that, that special and really of value to the retailers that you work with?
Speaker C:Oh, absolutely.
Speaker C:We've obviously got a long history working together with Thematic and always felt like a great partnership for us is the thinking is to go away from a piece of mechanical engineering of the piece of automation to a solution.
Speaker C:Right.
Speaker C:And I think if you bring both of us together, the beauty is that you end up with an end to end solution.
Speaker C:You know, you get the automation but you get totes, you get trolleys, you get training, you get, you know, care for the people, you get someone there holding your hand, you get all those puzzle pieces and I think it complements that set very nicely.
Speaker C:Us being a grocer, being a retailer at heart, Dematic being one of the most experienced players in the automation market just brings two good strengths together and that's what we like about this.
Speaker C:We generally think this goes one step up, this goes from, you know, a piece of equipment to a solution and tried and tested solution.
Speaker B:Yeah, you've got the dream team.
Speaker B:Yes, yeah, yeah.
Speaker A:I mean I can't think of two better partners really on an international stage to try to make something like this work.
Speaker A:But you know, at the end of the day, like, and like I said at the outset, Anna and I are agnostic to this question and we've got no dog in this fight.
Speaker A:So, so Oliver, I want to, I want to press you one final time before we let you both go because honestly we've seen the likes of companies like Ocado, which are very successful in E commerce, try to come to the US via Kroger and let's just say that there's mixed success at best with that so far and albeit it's a different automated solution.
Speaker A:So why do you think Tesco and Transcend will be different and find success in the US market?
Speaker A:And do you have any examples you can share of, of, of success outside of the UK at this point too?
Speaker C:I think the, the US is a very interesting market.
Speaker C:It's not the only market, you know, where people have built really, really big fulfillment centers, huge fulfillment centers based on the, on the, yeah, just on, on, on the success of that, that of those solutions which no doubt is a great solution.
Speaker C:But what happens quite often is, and as Daniel described it earlier, are you able to fill those, you know, these boxes, are they, are they the right size now?
Speaker C:Eventually there might be and there's some time for everything for us.
Speaker C:We think that a micro fulfillment solution is an ideal solution for the, you know, for the broad problem in countries like the US where we know that some of, you know, a lot of the topology in, in the US lends itself to more, many more smaller fulfillment places, fulfillment nodes, than one big one.
Speaker C:And that's a, a question of, you know, mainly of the final mile, is a question of utilizing the assets very well.
Speaker C:It's a question of modularity and scalability and flexibility is a question of capital outlay.
Speaker C:Right.
Speaker C:You know, one, you know, one first small size is a very, very different thing to invest into than, than one big one.
Speaker C:And it allows a certain progression in this.
Speaker C:And this progression over the network, I think is really, really valuable because you can grow over time at the right time in who you are and who you want to be and how big your volumes are, and you've got more flexibility in this.
Speaker C:And I think that makes the US very, very special because by, by, as I said it earlier, by the household density, by the way the US Is built, I think micro fulfillment as a general topic is going to have a revival and people will get to like it, particularly as labor availability in many countries always becomes more and more of a challenge.
Speaker C:And that's to your point, over, you know, what are good examples?
Speaker C:Where do these things work naturally?
Speaker C:They work, you know, more easily almost to say in countries which have lower, higher pay rates.
Speaker C:Right.
Speaker C:Where labor is very expensive, but that often goes in line with where labor is hard to get with this lower availability.
Speaker C:Right.
Speaker C:And, and that is where we usually see across the board for us and for others, see, see examples where these things work very well.
Speaker C:And, and that is where the, the future of this will lie for sure.
Speaker A:Yeah.
Speaker A:Right.
Speaker A:And, and yeah, and that inflection point's being getting easier and easier to cross on the labor side too.
Speaker A:The other.
Speaker A:That's interesting.
Speaker A:The way you describe that actually helps me understand potentially why Okado and Kroger have not had the success that they probably both would want at this point.
Speaker A:So, Danielle, any final words here to close us out?
Speaker D:Just that whilst there are common challenges, let's say across the grocery industry, every business has unique needs at the end of the day.
Speaker D:So I always say, look, the proof of the pudding is always in the eating.
Speaker D:So go and see the sites that Tesco has, you know, that are operating, that are live.
Speaker D:Go see the technology in action.
Speaker D:You know, you can contact Thematic or Transcend, you know, and we'd be happy to, to show you how it actually works.
Speaker A:Yeah, how can, how.
Speaker A:So you have, you have live tours of this that people can see in operation.
Speaker A:How do people take advantage of that?
Speaker A:Oliver?
Speaker C:Oh, absolutely.
Speaker C:We would love to show you around.
Speaker C:Please.
Speaker C:You know, absolutely.
Speaker C:We are, we are Very happy to, to let people look behind the scene.
Speaker C:We've actually got very big glass windows in, in our stores where you can have a peek inside.
Speaker C:But we'll, we'll show you around and we'll show you what they can do and, and show you that they actually work.
Speaker C:So yeah, they're more than welcome.
Speaker C:Get in touch and we'll, we'll arrange something.
Speaker C:Please do visit us in the, in the UK anytime.
Speaker A:And for people listening, what is the best way for them to get in touch with either one of you?
Speaker A:Danielle, why don't you go first?
Speaker D:Yeah, sure.
Speaker D:So if you head over to our website, dematic.com and go to the contact Us page, just fill in the form and somebody will be in touch to help you.
Speaker A:Yeah, and, and Oliver, what's the best way to get in touch with you?
Speaker A:Because Anna and I are coming to London here pretty soon, so I might actually want to take you up on this tour offer if I can make it work in the schedule.
Speaker A:What's the best way for people to reach you?
Speaker C:Oh, please do, please do come around.
Speaker C:TranscendRetailSolutions.com is always a good place to have a look around what we do, what else we do outside of Micro Fulfillment Solutions.
Speaker C:Have a look over there.
Speaker C:You can reach me on there as well and also find me on LinkedIn.
Speaker C:If you look for Oliver Forked and Transcend, you'll find me, no doubt.
Speaker C:Please drop me a note and we'll arrange something.
Speaker B:That sounds amazing.
Speaker B:Thank you both.
Speaker B:Oliver, Danielle, so much for taking time with us today.
Speaker B:Thank you to everyone who joined us and who are who's listening in today.
Speaker B:That wraps us up.
Speaker B:And as always, on behalf of all of us here at OMN Talk, be careful out there.
