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Fabric looks to turn empty retail spaces into fulfillment centers

With $136 million raised, startup company Fabric is looking to shake up the fulfillment center industry, The Real Deal and Business Insider reports. Fabric, founded in Tel Aviv and now headquartered in New York City, focuses on creating last-mile fulfillment centers for retailers. The company has repurposed former big-box stores and gyms to create many of its last-mile distribution centers. The concept comes at an ideal time as shoppers are making more purchases online due to the COVID-19 pandemic.

“By powering every retailer to get closer to their consumers during this rapidly evolving digital age, Fabric is reweaving the urban fabric of cities,” the company said on its website. “We’re deeply attuned to the needs of our retail partners, and we know that your priority is making sure that your customers are always delighted with their purchase.

“We’re reshaping the industry so that retailers can meet their customers’ demands for fast fulfillment, at profitable unit economics, at scale. We’re working to bring businesses closer to their customers, embedding fulfillment centers in cities to weave a new urban landscape.”

The average Fabric center is between 10,000 and 15,000 square feet—much smaller than the standard Amazon fulfillment center, which is closer to 800,000 square feet. Fabric helps retailers with their fulfillment needs by integrating its system into their existing stores, or by handling orders on their own at their sites known as micro-warehouses. The Fabric sites can process approximately 500 orders a day, according to Business Insider.

Fabric’s technological solutions

Fabric operates differently than traditional warehouses and fulfillment center due its smaller spaces. Similar solutions optimize for space efficiency and others optimize for throughput, but Fabric found a way to optimize for both—generating high throughput from small spaces close to where customers live. The company’s simple site design eliminates the need for big conveyor belts, allowing it to build new sites quickly. Fabric instead relies on robots and smart software. Doing so helps the company make improvements quickly and makes its platform cost effective for Fabric’s retail partners.

“Now it’s a whole different approach to automation that allows you to shrink it down,” Fabric Chief Commercial Officer Steve Hornyak told Business Insider. He also noted that retailers were decreasing their physical store location footprint and that the extra space is usually perfect to turn into a micro-fulfillment center. “The big-box guys don’t need the entire square footage that they have, so why not leverage that in order to do e-commerce and click-and-collect?”

Connectivity a key ingredient for fulfillment centers, big or small

Fabric’s mission to turn unused retail locations into micro-fulfillment centers could be a big opportunity for commercial real estate owners—especially if they’ve had trouble collecting rent from their tenants in recent months. A partnership with Fabric could increase revenue a retail tenant’s revenue and put them in a position to pay their rent on a regular basis again.

That opportunity only happens with reliable wireless connectivity, however. Fabric’s model mostly operates through robots and smart software; neither of those solutions works effectively if there isn’t a solid in-building wireless network in place. So before a CRE owner has visions of turning a failing retail location into a fulfillment center, they must make sure their connectivity is fully operational.

Joe Dyton can be reached at

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