
A market shift is transforming the way grocery retailers fulfill online orders. Today, let’s dive deeper into order fulfillment models and learn from real-world examples of what works and what doesn’t.
The 2nd Generation of Commerce: E-commerce from warehouses
Centralized Fulfillment Centers (CFCs) were once the backbone of traditional e-commerce. These large facilities focus solely on online orders, often leveraging automation to manage inventory and picking. While this model enables retailers to handle a vast assortment of products, it has significant drawbacks.
The biggest challenge is the misalignment with modern customer expectations. Studies show that customers increasingly prioritize speed, expecting deliveries within hours, not days. This shift has rendered the warehouse model’s longer delivery times less attractive.

Pros:
High capacity for large assortments
Cost-efficient for bulk orders
Allows for automated operations, reducing human error
Cons:
Longer delivery times are not suited for quick commerce
High operational and maintenance costs
Requires substantial initial investment
UK retailer Morrisons recently announced a strategic shift away from using automated warehouses powered by Ocado. Instead, they prioritize in-store picking to meet the demand for faster deliveries.
The 3rd Generation of Commerce: Q-commerce
The 3rd generation of e-commerce reflects the need to adapt to changing market dynamics. Rapid urbanization and younger, tech-savvy consumers drive demand for faster, more flexible delivery options. This era prioritizes proximity and speed, with innovative models designed to cater to the growing "instant gratification" economy. Unlike traditional centralized fulfillment models, this new era focuses on speed, flexibility, and proximity to the customer. Retailers are leveraging innovative methods to meet the growing demand for fast and convenient deliveries, especially in urban areas. Let’s explore two key components of this transformation: dark stores and in-store fulfillment.

Darkstores: the rise and fall
Dark stores represent a new era of quick commerce (q-commerce), offering solutions tailored for urban density and rapid delivery. These small, warehouse-like facilities are strategically located in dense networks designed to enable fast delivery for small basket sizes. With dedicated pickers and couriers, dark stores can promise delivery within 15-30 minutes.
However, the dark store model has faced significant challenges. Regulatory crackdowns in cities worldwide, including in Europe, have made operating these facilities more difficult. Governments cite zoning and urban planning concerns, arguing that dark stores often disrupt communities.
Pros:
Extremely fast delivery times
Efficient for small basket orders
Optimized for dense urban areas
Cons:
High operational costs and investment
Regulatory hurdles in many cities
The financial instability of pioneers like Getir and Gorillas
In-Store Fulfillment: The Universal Solution
In-store fulfillment leverages the infrastructure of existing retail locations to pick and fulfill online orders. This model offers a seamless way to combine online and offline shopping experiences, making it a practical solution for many retailers.
Why It Works:
Customers benefit from a decent assortment and fast delivery.
Retailers avoid additional investment, utilizing existing resources to maximize revenue per square meter.
The model supports click-and-collect options, giving customers flexibility in how they receive their orders.
In-store picking has become the most effective solution for retailers facing the challenges of modern e-commerce. This approach addresses both customer and operational needs. By utilizing multiple stores, retailers can distribute online demand across their network, enabling them to fulfill orders using existing resources while meeting customer expectations for speed and variety.
Lessons from the Market
Warehouses Misalign with Customer Expectations Customers’ demand for fast delivery and lower costs makes traditional warehouse models less appealing.
In-store picking is a Scalable Solution. This model meets customer needs while minimizing operational challenges and maximizing existing resources.
Dark Stores Are Not Yet a Viable Model With existing store networks still not utilized to full capacity for online order fulfillment, building new infrastructure is costly and financially unsustainable.
How Pickitoo Can Help
As e-commerce evolves, Pickitoo offers solutions that empower retailers to thrive:
Increase operational efficiency: Our AI-powered algorithms, together with our user-friendly picking app, allow retailers to manage their employees and assign tasks in a way that maximizes efficiency.
Optimize Picking Time: Our app reduces picking time by 50%, ensuring orders are fulfilled faster.
Manage Out-of-Stock Items: Advanced analytics and real-time updates minimize missed sales opportunities.
Offer Alternatives: Enable customers to choose replacements for unavailable items in real-time.
Streamline Checkout: Integrate QR codes to eliminate long lines and enhance customer satisfaction.
With Pickitoo, you can turn operational challenges into opportunities, creating a more sustainable and customer-friendly fulfillment strategy. Optimize e-commerce with Pickitoo and deliver results that exceed expectations. Learn more about how Pickitoo can transform your operations today!