Woolworths opens first micro fulfilment centre

Woolworths has opened an eStore in Melbourne equipped with automation technology that drastically increases the speed and volume of online orders the supermarket giant can deliver. 

Woolworths Carrum Downs eStore

The newly built e-com floor occupies 2400 sqm at the back of Woolworths’ existing Carrum Downs supermarket. 

Micro automation technology from US-based vendor Takeoff Technologies sorts and moves products from automated storage units to team members who pick and pack customer orders.

These units can hold up to 10,000 of the most in-demand grocery products, while fresh fruit and vegetables and meat will continue to be picked from the shopfloor.   

Woolworths said improvements to speed, accuracy and efficiency will allow for thousands of online orders to be delivered to customers in south-east Melbourne suburbs each week, including on a same day basis.  

Micro fulfilment tech helps dispatch five times the online order volume of a standard Woolworths store, helping to meet the high level of demand for grocery deliveries created by COVID-19 restrictions. 

Woolworths’ online orders have more than doubled in Victoria in 2020 and according to the NAB Online Retail Sales Index, online grocery and liquor sales have recorded continuous growth for the past 14 months, up almost 70 per cent year-on-year.  

“The continued growth in online grocery gives us an opportunity to reimagine what the future of our stores will look like,” said Woolworths CEO Brad Banducci, who described the micro fulfillment technology as a “game changer”.  

“It will help us deliver unparalleled speed and accuracy in the online picking process while keeping us close to our customers for faster and more flexible deliveries to the home.

“This speed and proximity is key to boosting the availability of the same day deliveries more and more of our customers want given their busy lives.” 

Woolworths has hired around 50 new online team members to help fulfil orders from the Carrum Downs eStore and plans to onboard another 100 in the coming months as the site ramps up to full capacity.  

Woolworths first announced its partnership with Takeoff in August 2019. 

Carrum Downs is the first of three initial Woolworths Group sites to trial the capability, with two more in Auckland and Christchurch, New Zealand to follow. Global technology firm Knapp has also helped with the fitout.   

More broadly across the retail sector analysts predict the demand for highly automated micro fulfillment centres will continue to grow as stores are converted into mini-warehouses to manage online orders.