Vertical storage as a solution for online grocery fulfillment

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Spurred by the continued surge in e-commerce business sparked by the pandemic, grocers are increasing their interest in vertical storage systems, which allow workers to pick orders more efficiently and which can be less expensive than other types of automated equipment.

The mechanized units, which stack bins loaded with goods on racks in multi-story towers that can be more than 40 feet tall, have long been used in industrial settings, where they are valued for their ability to store and quickly retrieve parts while a Minimum floor space required.

Those qualities are now catching on with grocery retailers, which until recently have shown relatively little interest in vertical storage systems, despite investing in other forms of automation, Modula CEO Max Gigli told Grocery Dive. Modula is an Italy-based manufacturer of vertical storage equipment, working with grocers in Europe and in contact with US supermarket chains.

“The customer portfolio that we reached has changed a lot,” said Gigli. “Manufacturing is still our bread and butter, but we’re seeing more and more customers…in the retail and food sectors.”

Vertical storage systems, also known as vertical lift modules, can perform a variety of tasks for retailers, including storing products for distribution to stores or incorporating them into online orders. The units can also store finished orders until customers pick them up or delivery staff arrive to transport them to people’s homes.

“The customer portfolio that we have reached has changed significantly. Manufacturing is still our bread and butter, but we are seeing more and more customers…in the retail and food sectors.”

In a sign of the food industry’s growing interest in vertical elevator modules, representatives from Modula spoke at the Groceryshop in September with representatives from companies including HEB, Kroger, Whole Foods Market, Giant Eagle, Associated Wholesale Grocers and Lowes Foods, David Lind, the company’s director of business development said Grocery Dive. According to Lind, Modula is also linked to British grocery chain Tesco at the show.

Last year, Wakefern Food, the East Coast food co-op that includes banners like ShopRite, Dearborn Market and The Fresh Grocer, said it would test started a vertical lift module from Modula competitor Kardex Remstar in the home department of a ShopRite store in Kingston, New York.

A more cost-effective alternative to micro-fulfillment centers

Vertical storage systems hold promise for grocers because of their relatively low cost compared to automated micro-fulfillment centers, Marc Wulfraat, founder and president of MWPVL International, a Montreal-based supply chain consultancy that advises grocery chains, told Grocery Dive.

“I started looking [vertical lift modules] and watch out because I really believe this technology has a future here in North America,” said Wulfraat.

Vertical lift modules are also attractive because they are less complex than micro-fulfillment centers, which can reduce maintenance costs, Wulfraat added. “You can have someone doing other forms of maintenance in the building … taking care of the equipment,” rather than needing dedicated technicians to take care of mechanical issues, he said, referring to vertical elevator modules.

Modula vertical storage units in a warehouse.

Courtesy of Modula

Still, according to Wulfraat, it could take time for grocery retailers to see a surge in interest in vertical storage technology, much like it has seen in micro-fulfillment center technology take off a little slowly. “It always takes a bit of time for people to understand and understand new solutions that are coming out, especially in the automation space,” he said.

According to Wulfraat, vertical lift modules can be particularly useful in helping retailers stock and fulfill orders for items like dry goods that can be stored at ambient temperature but need to be on hand at all times, adding that he believes they can be used by grocers Distribution centers will become more important in the US before they reach the back rooms of supermarkets or dark stores.

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