A Manhattan-based technology company has opened a "micro distribution hub" at Tanger Outlets Deer Park that offers same-day merchandise delivery to customers and product returns for online purchases.
Operated and staffed by Fillogic, the new 5,600-square-foot facility will receive and store retailers’ merchandise, to be delivered to their store shelves or to be packed and shipped to their online customers, said Bill Thayer, co-founder and co-chief executive officer of Fillogic.
"We’re a full-capacity logistics company," he said.
"Fillogic has contracted with specific retailers at launch but will offer on-demand logistics services for both Tanger-based retailers, online-only retailers, plus the future addition of other logistics services for the greater community," said Thayer, who declined to name the participating retailers.
Founded in 2018, Fillogic now has eight distribution hubs at malls and shopping centers, and plans to open more, he said. The Deer Park hub is the first on Long Island.
The company will be opening hubs in Maryland, Georgia and Florida by the end of the summer and in Arizona and California by early fall, Thayer said.
He said the company's facilities do not just provide "micro fulfillment," which refers to filling customer orders from store shelves or a warehouse at a retail location. "We are not that. We are micro distribution because all the service that would be done at a larger distribution center, we do it on a micro level," he said.
Headquartered in Greensboro, North Carolina, Tanger Factory Outlet Centers Inc. is a real estate investment trust that owns or has an ownership interest in 36 shopping centers in 20 U.S. states and Canada.
Tanger’s shopping center in Deer Park is its only property with a Fillogic distribution hub, but the Long Island hub is expected to lead to more engagement with Fillogic, including at the other local Tanger shopping center, in Riverhead, said Bibbit Mason, vice president of leasing at Tanger Outlets.
"We expect the Deer Park hub to be one of the largest and most productive in the Tanger-based hubs, given its location in the densest portion of Suffolk county. .... It’s our intent, based on demand, to have Fillogic-powered services at our Riverhead location in the future," she said.
The Fillogic partnership enables Tanger retailers to offer faster and more convenient delivery and return services, while expanding the shopping center's tenant portfolio, Mason said.
Micro fulfillment centers today are primarily associated with grocers, said Thomas O’Connor, senior director in supply chain research and advisory at Gartner, a Stamford, Connecticut-based research advisory firm.
Micro fulfillment centers are warehouse facilities usually leveraging automation, artificial intelligence, real-time data and robotics, according to Gartner. The centers are typically located within physical stores.
A benefit for retailers using micro distribution centers in shopping centers is that they can possibly reduce their last-mile transportation costs because they are getting a dense delivery offering, O’Connor said.
It also helps the mall operator create a "sticky point" for the retailers – adding an amenity to help retain tenants, he said.
Simon Property Group Inc., The Macerich Co. and Unibail-Rodamco-Westfield, all of which own malls on Long Island, are among the six companies that have partnered with Fillogic to open micro distribution centers at their retail properties.