Fulfillment Technologies & Innovations Changing the Game
With US eCommerce sales expected to reach $713 billion by 2022 (over $500 billion this year)1, retailers and fulfillment providers are amping up their distribution centers to meet ever-increasing demand. Beyond a strong foundation – those ever-important, dependable order management and warehouse management technologies – what can we do to be proactive in today’s world of instant-fulfillment shopper expectations? Let’s take a look at what the pros are doing.
Automation and Robotics
We’ve all seen the latest and greatest ideas and prototypes online, but did you know warehouse and fulfillment centers are already using robotics? Routine, repetitive tasks are now being outsourced to a labor force that doesn’t require income, steeply driving down the cost of labor to assemble orders. This is a huge plus for retailers as reduced operations costs can allow for reductions to other charges like freight; this could increase conversion rates, since over 40% of US adults abandon an online purchase if shipping and handling costs are too high.2
These robotic processes go beyond picking and packing within a warehouse – they can handle and simplify returns processing and even automate cycle counting for inventory accuracy.
Pop-Up Distribution Centers
What if you could set up an accurate, cost-effective fulfillment center anywhere in the world for peak sales or to quickly serve a specific geography as needed? It’s no secret that creating multiple piles of inventory in multiple locations may not have a strong return for 12 months out of the year, but can greatly boost profit for shorter periods.
Temporary distribution centers are the next big thing – they can be rapidly deployed, de-leverage your fixed costs of a year-round distribution center, and boost customers’ experiences with fast delivery times by combating the urban fulfillment phenomena. It’s a radical way of flexing your supply chain to be able to ship from stores, malls, and temporary warehouses near high-volume regions.
What’s the catch? You need to integrate your front- and back-end systems with strong, advanced order management and technology enablement, and you’ll need the warehousing tools to operate picking, packing, and shipping – which is typically where the pros come in.
Strange name, innovative concept. It’s like Uber or Favor for shopping deliveries – you order items online, and a “shopper” swings by your local retailer or grocery store, picks out your items, and delivers them to your doorstep within hours. Partnering with these delivery services can pay back retailers – and the payoff can be even bigger for retailers with their own “shopper” teams.
This strategy is primarily being deployed at larger retailers – think, the Whole Foods + Amazon pairing, allowing the companies to boast a 2-hour grocery delivery service, and now Target + Shipt. Target now has a team of 20,000 “shoppers” across 57 stores, and has already seen strong responses to their new, pilot fulfillment feature – which goes far beyond grocery delivery. Nearly any item in the store, from apparel and beauty to food and home goods, are now being delivered locally. It’ll be interesting to see how delivery services expand in the next few years among retailers and malls.
Fulfillment isn’t to be forgotten – it’s the age of the consumer, and not just from a front-end perspective. Retailers, big and small, are innovating the fastest ways to reach shoppers that create positive experiences and build loyalty. Many are looking to team with partners who understand fulfillment and can put their lens of experience on unique businesses, bringing more deliveries to doorsteps – at the fastest rate we’ve ever seen. What should you consider if you’re looking to re-engineer your fulfillment operation?
- What’s it going to cost you? All of the above are nice to have, but there is a significant investment involved. Make sure the ROI makes sense for your business.
- Does the technology match the needs of your product mix? Weight, height, width, packaging, durability – take these into consideration when determining which technologies best fit your business needs.
- Experience in innovation – technologically and on the ground. eCommerce fulfillment continues to evolve, is your partner accustomed to adjusting to new norms?
- Rapid, flexible deployment locations. Can the technology be quickly implemented in your facility?
- Is there potential for international expansion?
- What services are going to differentiate your brand? Are you providing gift wrapping, branded packaging, or personalization services that make your shipments stand out?
If you have any questions or want to connect with an expert who can assist you in selecting the best fulfillment technology for your business, send us a note.
1 Surprise – Retail Is Growing! Here’s What It Means For Digital Businesses, August 2017, Forrester
2 The Three Rs Of Retail Robotics, February 2018, Forrester