How to Jump-Start Flexible Retail Fulfillment for Today’s Multi-Channel World

During the pandemic, unprecedented ecommerce growth forced our industry to pivot quickly to accommodate sharp upticks in both picking and shipping. Retail analysts predict continued multichannel popularity—including home delivery; Buy Online, Pickup in Store (BOPIS); and Buy Online, Pickup at Curb (BOPAC).

How to Jump-Start Flexible Retail Fulfillment for Today’s Multi-Channel World

With ever tighter delivery windows on the horizon, it’s clear retail fulfillment operations must evolve to meet new consumer trends. Many are leveraging AI-driven automation and robotics solutions, which deploy quickly, speed operations, and deliver essential flexibility and efficiency. With this helpful article, you can:

  • Learn more about Direct Picking Software and Collaborative Mobile Robots
  • See how you can boost your pick rate and reduce labor spend
  • Explore current retailer use cases for automated fulfillment technology

Content Summary

Why flexibility is a must
Current fulfillment operations have met their match
What next-gen fulfillment looks like
How directed picking and collaboration mobile robots impact fultillment
How bodybuilding.com boosted its pick rate by 80% and reduced labor spend by 30%
Current use cases for directed picking and collaborative robotics
Emerging use cases for directed picking and collaborative mobile robots
The future of retail fulfillment is collaborative and robotic

Many lessons came out of the pandemic, but perhaps the biggest for retailers is how fast things can change for retail fulfillment centers. E-commerce activity grew an unprecedented 33.6% in 2020, forcing those fulfilling retail orders to pivot quickly to accommodate sharp upticks in both picking and shipping. With analysts predicting the popularity of channels including home delivery; Buy Online, Pickup in Store (BOPIS); and Buy Online, Pickup at Curb (BOPAC) to not only continue but require ever tighter delivery windows, it’s clear retail fulfillment operations must become more flexible to accommodate evolving consumer trends.

However, many existing fulfillment processes make rapid change costly and difficult. Manual processes are pervasive, causing issues with scalability, accuracy and change management — all challenges further exacerbated by labor shortages. Operations with fixed systems such as conveyor belts struggle to adapt to changing fulfillment demands, such as individual orders versus full cases. As a result, many retail fulfillment operations, whether run by third-party logistics (3PLs), distributors or retailers themselves, will fall short of meeting new expectations, ultimately losing market share to those with greater agility and adaptability.

A nimble response to changing demands requires flexible, highlyefficient options that enable retail fulfillment operations to adapt quickly as needs evolve. A growing number are leveraging a combination of intelligent work allocation software and robotics solutions, which deploy quickly, speed operations, and deliver essential flexibility and efficiency to retail fulfillment in order to meet today’s elevated demands — and to be ready for tomorrow’s. According to the annual 3PL Study, 32% of shippers and 25% of 3PLs call automation and robotics “critical” to their operations.

Why flexibility is a must

Those who cut their retailing teeth recalling brick-and-mortar stores, catalogues and mail order as the only viable retail channels would be astonished by today’s complex world of retail fulfillment. Experts predict some of the accelerated demand for e-commerce delivery, BOPIS, BOPAC, and ship from store to shift back to in-store purchases, but just how much remains unclear, as it will vary by customer and category. Retail businesses have a limited history of driving high-confidence forecasts, so demand will remain unpredictable until trends settle.

According to RSR Research, 61% of retailer “winners” – those with comparable annual store/channel sales growth over 4.5% – versus 40% of others, see optimized omnichannel order fulfillment as a big opportunity to improve profitability.

Evolving demand patterns have a substantial impact on fulfillment, but they’re not the only factor influencing retail fulfillment operations. Others include:

  • Labor Shortages: According to the latest Census data, warehouse employment has reached a new peak due to the surge in e-commerce sales even as warehouse capacity has been decreasing5. Retail fulfillment operations are seeing increased demand for laborintensive e-commerce fulfillment just as their resources are maxed out.
  • Higher Return Rates: When purchases shift away from in-store, return rates rise.
  • Space Constraints: Increased non-store fulfillment volume has pushed distribution capacity to its limits. Retailers need solutions to maximize existing space before pursuing facility expansion, which is typically more costly.
  • New Business Models: Retailers are exploring channels such as subscriptions and rentals, which place new demands on fulfillment.

These converging forces mean retail fulfillment operations must make significant changes to accommodate today’s trends — and whatever comes next.

Current fulfillment operations have met their match

Many retail fulfillment operations were already struggling to meet emerging interest in new channels before the pandemic delivered the one-two punch of sharply accelerated demand in addition to labor and safety challenges. Often, they cobbled together work-arounds or turned to third parties to cope with the surge.

Now, it’s time to normalize operations to accommodate new demand in a more efficient, effective way. Many must overcome manual processes and static automation such as conveyors or goods-to-person systems designed around store fulfillment, not each-picking. Today, these types of systems are obstacles to the fast, flexible fulfillment required to meet expectations of today’s consumer.

More than half (56%) of retailers say fulfilling growing online demand is one of their top three challenges, according to RSR Research, and 46% say legacy technologies hinder their agility in a changing world. To meet consumers’ new expectations, retail fulfillment operations require solutions that deploy quickly; are fast, easy and simple to change; and enable more rapid and efficient processes such as picking and returns putaway

MANUAL SYSTEMS:

  • Slow
  • Error-prone
  • Difficult to train quickly

STATIC AUTOMATION:

  • Expensive to maintain
  • Costly to change
  • Inflexible

What next-gen fulfillment looks like

Retail fulfillment operations leading the way in creating this fast, flexible environment are leveraging AI, robotics, and software development advancements. Approximately 80% of logistics operations surveyed by Deloitte leverage, or plan to leverage, process robotics to automate repetitive digital tasks.

Two key developments in this area are Intelligent work allocation software and collaborative mobile robots (CMR).

Intelligent work allocation software uses AI to optimize fulfillment workflow efficiency, make picking/putaway simpler, faster, and more accurate, and significantly reduces training time.

Collaborative Mobile Robots help workers execute those AI-driven fulfillment plans. Software-driven, mobile robots take over the most physical parts of fulfillment like traversing long distances between tasks, while letting humans do what they do best, such as making the actual picks. System-directed picking, driven by intelligent work allocation, also means the CMR guides the associate through the optimal pick path as well as individual picks, keeping them focused and on task.

Here’s how the two work together:

  1. Intelligent work allocation software looks across the order pool and groups tasks by aisle or zone to optimize and allocate work to individual CMRs, reducing associate travel. Zones can change dynamically according to pick demands and/or labor availability.
  2. The associate picks the item, runs the barcode under a scanner to confirm accuracy and places the item in the indicated tote.
  3. When the picks for that robot are complete, the now-full robot travels independently, covering the long distance to the manifesting and packing area.
  4. A new robot is already waiting nearby to assist with the next set of picks, eliminating the need for extra steps and keeping the associate on pace.

By introducing AI and robotics to the replicable parts of the picking process, like transporting goods from point A to point B, warehouse associates are able to focus on the higher-order tasks. Now they can work more accurately and efficiently and eliminate the long walks that used to take up lots of their time and energy

How directed picking and collaboration mobile robots impact fultillment

Together, collaborative mobile robots, intelligent work allocation software, and system-directed picking capabilities deliver a long list of benefits for retail fulfillment operations, including:

  1. Reduced training times
  2. More efficient pick and putaway routing
  3. More picks per user
  4. Labor efficiency and reduced warehouse congestion
  5. Increased accuracy
  6. Flexibility
  7. Fast implementation requiring no new infrastructure
  8. Ability to meet tight fulfillment windows

According to Robert Shields, director of operations for online fitness brand Bodybuilding.com, data collected through collaborative mobile robots also enhances operational decision making.

“We look at slotting velocity heat maps on a daily basis. It gives us really good insight as to where to place fast-moving, high velocity products to further optimize the pick path and reduce travel distance.” – ROBERT SHIELDS, DIRECTOR OF OPERATIONS, BODYBUILDING.COM

When retail fulfillment operations are set up to perform and change as customer demands dictate, the result is a better customer experience, deeper loyalty and increased customer lifetime value.

Fulfillment also becomes more flexible, as everything is dynamic and controlled by software. So when requirements change, new product lines are introduced or changing consumer trends force a pivot, the fulfillment operation can switch gears without additional, and potentially costly, investments.

How bodybuilding.com boosted its pick rate by 80% and reduced labor spend by 30%

With a reputation for super-fast shipping, Bodybuilding.com knew that maintaining those high service levels as it grew would require picking a solution that would scale. Already, peak sales events had pickers walking up to 12 miles per day.

But Robert Shields, director of operations for online fitness brand Bodybuilding.com, and his colleagues faced challenges in finding a solution that would replace labor- and process-intensive manual picking and integrate with its homegrown warehouse management system without a lot of heavy lifting. Bodybuilding.com also needed to reduce its two- to four-week training time and cope with stiff competition for labor near its two distribution facilities.

Those problems were solved by adopting 6 River Systems’ Chuck collaborative mobile robots and intelligent work allocation software. Bodybuilding. com virtually eliminated significant parts of its process, such as pick order printing, pack-out, and returning miss-picks. The distance pickers were required to walk fell 40%, while their pick rate increased 80%. Training time dropped to one to two days.

Now, “we have really, really happy employees that essentially walk half as much as they used to,” Shields said. “Some of our top pickers gave us feedback a year after implementation saying how much they like the process, how much of a difference it made.”

Bodybuilding.com also removed conveyors and the costly compressors that ran them, freeing up space for a new product category — all while delivering with best-in-class, 99.89% order accuracy and shipping most orders within half a day.

One key to success in introducing robotics into fulfillment is ensuring workers see the solution as a tool, not a threat, Shields advised. “Have a really good change management plan in place, and really emphasize that this is a collaborative solution intended to make your job easier.”

Current use cases for directed picking and collaborative robotics

Directed picking and collaborative mobile robots enhance any type of retail fulfillment operation, from traditional warehouse and fulfillment centers to the most innovative, experimental approaches. This means adopters can easily implement or expand a fleet of CMRs within existing facilities and quickly stand up new operations to meet demand.

Currently, these solutions are being used to facilitate:

  • Traditional warehouses and fulfillment centers
  • BOPIS, BOPAC, delivery, etc.
  • Reconfigured fulfillment centers
  • Pop-up and micro fulfillment operations
  • Re-apportioned store space
  • Dark stores
  • Returns

For example, retailers including Walmart, Albertsons and H Mart have opened micro-fulfillment centers (MFC), often with the help of automated fulfillment technology, including robotics. To meet surging ecommerce demand during the pandemic, Crocs deployed a new fulfillment operation in less than three months. It took just two days for associates to learn to use 6 River Systems’ collaborative mobile robot, Chuck, which helped to increase their throughput by 182%.

Interact Analysis predicts 110 MFC projects will go live globally in 2021

Emerging use cases for directed picking and collaborative mobile robots

Because they are software-based and AI-enabled, intelligent work allocation software and collaborative mobile robots represent the future of how retail fulfillment operations will function. Moving forward, those solutions can be used together in many ways, including for additional warehouse functions such as putaway and active store floors.

For example, retailers are expected to begin testing robots for store floor associate fulfillment with shoppers. Safety measures built into autonomous robots mean many can navigate store floors without interfering with shoppers, aiding functions such as picking the same way they do in dedicated fulfillment operations.

But where robots are not workable, the same software can run on mobile devices, directing associates to the most efficient pick and product return paths without the aid of a robot. This is also expected to enable customer self-fulfillment with mapping, so consumers can also move through their shopping lists in the most efficient way possible.

The future of retail fulfillment is collaborative and robotic

While the shape of future customer demand is uncertain, the need for flexible, highly efficient fulfillment solutions is not.

“As consumers shift towards online shopping, retailers have been tasked with the audacious task of fulfilling orders in a profitable manner whilst simultaneously reducing the delivery time.” – A REPORT FROM RESEARCH FIRM, INTERACT ANALYSIS

Intelligent work allocation software and collaborative mobile robots make this balance possible by removing barriers and enabling accurate, efficient, easy-to-deploy fulfillment solutions close to the point of demand, ultimately meeting customers’ ever-elevating expectations.