Omni Talk Retail - Episode: Fabric
Release Date: January 11, 2025
Hosts: Chris Walton & Ann Mezzenga
Guest: Jonathan Murav, VP of Sales at Fabric
Introduction to Fabric
The episode kicks off with hosts Chris Walton and Ann Mezzenga introducing the live coverage from the National Retail Federation (NRF) event, situated at Save A Lot's new micro-fulfillment warehouse in Brooklyn, powered by Fabric.
Notable Quote:
Chris Walton [00:04]: “We are kicking off our live NRF coverage on Saturday morning.”
Fabric’s Background and Mission
Jonathan Murav provides an overview of Fabric, emphasizing its role as a fulfillment automation technology company aimed at solving significant challenges in the retail sector, particularly in on-demand e-commerce grocery delivery.
Notable Quote:
Jonathan Murav [01:00]: “Fabric is a fulfillment automation technology company focused on unlocking some of the largest problems in retail... profitable on-demand e-commerce grocery delivery for grocers in North America and globally.”
With nine years in operation and Jonathan himself nearing his sixth year with the company, Fabric combines technological innovation with operational expertise to address customer pain points effectively.
Current Installations and Operational Insights
Fabric distinguishes itself by not only developing technology but also operating the fulfillment sites they build. This dual approach allows Fabric to deeply understand and address the challenges faced by retail operators.
Notable Quote:
Jonathan Murav [02:04]: “We actually started as a company that actually operates the sites that we build.”
Chris highlights Fabric’s hands-on approach, likening it to "eating what you cook," which fosters a strong alignment between product development and operational needs.
The Brooklyn Warehouse: A Case Study
Standing in Save A Lot's Brooklyn facility, Jonathan elaborates on what makes this installation unique. Located in one of New York's densest areas, the 7,000-square-foot warehouse serves the entire Brooklyn population within a 30-minute reach.
Notable Quotes:
Jonathan Murav [03:17]: “We are surrounded by 2 million people. We are within 30 minute reach of 2 million people.”
Chris Walton [03:58]: “How big is this facility, Jonathan? And then also I'm curious too, like, how does, how do the dynamics of cold and fresh and all that.”
Jonathan explains that this is the world's first fully automated tri-temperature zone grocery facility, capable of handling ambient, chilled, and frozen goods seamlessly.
Notable Quote:
Jonathan Murav [05:29]: “It's the world's first floor, fully automated tri temperature zone, automated grocery facility.”
This setup significantly reduces labor costs by automating the picking process across different temperature zones, which traditionally require separate handling and increase operational complexity.
Customer Process and Benefits for Save A Lot
Jonathan outlines the customer journey facilitated by this micro-fulfillment center. Customers place orders via Uber Eats, which are then efficiently processed and delivered within minutes.
Notable Quote:
Jonathan Murav [07:11]: “A customer will go on the Uber Eats application, find the Save A Lot storefront... the robots get to work to start collecting all the elements of that order.”
For Save A Lot, this innovation allows entry into the Brooklyn market without the high costs associated with traditional brick-and-mortar expansion, providing access to a large, dense customer base economically.
Notable Quote:
Jonathan Murav [08:39]: “This is truly like in terms of brand exposure, it's a brand new market for them.”
Market Penetration and Addressable Market
The Brooklyn facility targets a substantial addressable market, with 2 million residents in the area and the capacity to handle approximately 350 orders per day. Even a low market penetration rate remains economically viable, showcasing the scalability of Fabric’s solutions.
Notable Quote:
Jonathan Murav [09:48]: “This site's designed to do about 350 orders a day... you can get to a very low percentage of penetration in the market and still make this a really compelling offering.”
The Future of Micro Fulfillment Centers (MFCs)
Jonathan shares his insights on the evolution of MFCs, positioning Fabric at the forefront of this innovative industry. He anticipates significant growth and maturation as both technology and market readiness align for large-scale adoption.
Notable Quotes:
Jonathan Murav [11:03]: “We’re at this inflection point where both the grocers and the technology are now ready for meaningful scale.”
Chris Walton [10:32]: “We've seen a lot of starts and stops in the micro fulfillment arena... but this is really unique, really new.”
The pandemic's role in accelerating e-commerce penetration is acknowledged, increasing demand and compelling grocers to adopt more efficient fulfillment solutions to maintain profitability.
Notable Quote:
Jonathan Murav [12:06]: “The pandemic... accelerated market penetration for E-commerce grocery... it’s compelling grocers to start to move in a more aggressive way.”
Impact of the Pandemic on MFCs
The COVID-19 pandemic significantly boosted the adoption of e-commerce grocery, raising penetration rates from 4% pre-pandemic to over 10%, with spikes in individual store performances. This surge has underscored the necessity for efficient fulfillment solutions like Fabric’s MFCs to support sustained growth and profitability.
Notable Quotes:
Jonathan Murav [12:06]: “Penetration rate was like 4% before the pandemic. Now it's like north of 10%, 12%. And during the pandemic, still growing high is like 25%.”
Conclusion and Contact Information
As the episode wraps up, Jonathan Murav provides contact information for listeners interested in exploring Fabric’s solutions further. He can be reached via LinkedIn, email, or through Fabric’s website.
Notable Quote:
Jonathan Murav [13:58]: “You can find me on LinkedIn... or you can just find us on our website, getfabric.com and send us a message through there.”
The hosts express their appreciation for Fabric's insights and provide closing remarks, emphasizing the significance of the Brooklyn facility as a model for future micro-fulfillment centers.
Key Takeaways
- Fabric’s Dual Approach: Combines technology development with operational management to create tailored fulfillment solutions.
- Innovative Facility Design: Fully automated tri-temperature zones enable efficient handling of diverse grocery items, reducing labor costs and increasing speed.
- Market Penetration Strategy: Enables grocers like Save A Lot to enter dense markets economically without the need for extensive physical storefronts.
- Growth of MFCs: Positioned at a pivotal point in MFC adoption, accelerated by pandemic-induced shifts in consumer behavior towards e-commerce.
- Future Outlook: Anticipates continued scalability and technological advancements in the micro-fulfillment sector, driven by both grocers’ needs and consumer demand.
This episode provides a comprehensive look into Fabric's innovative solutions in the retail fulfillment space, highlighting how technology and strategic operations can transform grocery delivery, especially in dense urban markets like Brooklyn.