Dive Brief:

• CommonSense Robotics has begun construction on an automated micro-fulfillment center (MFC) located beneath the Shalom Meir Tower in Tel Aviv, according to a news release emailed to Grocery Dive. The company claims this will be the first MFC to be operated underground. 
• The facility, which the company said will go live in Q4, will fulfill one-hour grocery deliveries for an Israeli retailer. The structure sits in an 18,000-square-foot triangular space with average ceiling height of 11 feet. It will feature three temperature zones, including ambient, chilled and frozen.
• CommonSense currently operates a 6,000-square-foot MFC in Tel Aviv that has fulfilled orders for Super-Pharm, a sister chain to Canada’s Shoppers Drug Mart, since last October. The technology company offers one-hour delivery from the facility.

Dive Insight:

As online shopping rapidly accelerates in urban areas, the question of how grocers and other retailers will support speedy delivery in dense, expensive neighborhoods has become a pressing one. In cities like New York and Los Angeles, even a small space can prove prohibitively expensive for fulfillment businesses that run on thin margins and still have a lot to figure out operationally.

In an op-ed published on Fast Company, CommonSense Robotics' CEO Elram Goren argues that underground parking garages are under-utilized, relatively inexpensive spaces that retailers and e-commerce companies should buy up. According to a recent report in City Lab, there are more than 2 billion parking spaces in the U.S. for roughly 250 million cars. As ride-share companies and other transportation options increase in cities, cars have become superfluous for many urban dwellers.

Aboveground parking lots are getting converted into housing and parks, Goren writes, but underground lots remain an untapped resource.

"These dark, windowless spaces aren’t conducive to housing or recreation, but they’re inexpensive, readily available, and situated in prime locations," he notes. "This unique mix of attributes makes underground parking garages perfect for the storage and fulfillment of e-commerce orders, whether it’s food and groceries or clothing and consumer electronics."

The automated fulfillment race in grocery is officially on. Kroger and Ocado recently announced the site of their fourth robot-packed CFC, while in the U.K. Ocado has launched a same-day delivery service powered by micro-fulfillment centers. Albertsons, Stop & Shop and Sedano’s have all linked up with Takeoff Technologies to test automated micro warehouses that promise speed and better economics on filling e-commerce orders.

CommonSense’s entry into the U.S., meanwhile, seems imminent. The company has said it has plans to partner with major U.S. grocers, and further details could be forthcoming this year.