Three Approaches to Meeting New E-Commerce Demand
Some of the largest retailers in the world are in a multi-billion-dollar race to stock their customers’ in the most efficient way possible. The strategies these retailers are using to meet today’s new e-commerce demands are diverse, but the prize is always the same: capturing a customer in an industry projected to be worth $843.15 billion in 2021, according the market research company eMarketer. In fact, eMarketer says e-commerce sales will grow as high as $1.204 trillion, or 19.2% of total retail sales, by 2024.
“There will be some lasting impacts from the pandemic that will fundamentally change how people shop,” says Cindy Liu, eMarketer senior forecasting analyst at Insider Intelligence, in an article published in October 2020 titled “U.S. E-commerce Growth Jumps to More than 30%, Accelerating Online Shopping Shift Nearly 2 Years.”
“For one, many stores, particularly department stores, may close permanently. Secondly we believe consumer shopping behaviors will permanently change. Many consumers have either shopped online for the first time or shopped in new categories (i.e., groceries). Both the increase in new users and frequency of purchasing will have a lasting impact on retail.”
Automated In-Store Picking
One e-commerce fulfillment strategy being used by Walmart is automated in-store picking, which comes in the form of a robotic grocery-picking system called Alphabot. This system is estimated to pick and pack orders as much as 10 times faster than a human, according to Business Insider’s Hayley Peterson in her article “Walmart Unveils a Grocery-Picking Robot to Take on Amazon and Kroger.”
The system is currently deployed in a Salem, New Hampshire Walmart store, where Alphabot’s robots transfer thousands of bins around a shelving system as they pack orders for delivery or pickup, Peterson says. When the customer arrives, a human worker can retrieve the items from a station attached to the Alphabot shelving system, where the worker inputs a grocery order number and the system spits out bins with shoppers’ groceries, already bagged.
The U.K.-based Ocado PLC began life as an online-only grocer, but now licenses its technology to supermarkets around the world, including Kroger in the U.S. The technology involves deploying fleets of rolling robots designed to rapidly gather products and deliver them to what can be miles of conveyor belts in enormous, automated warehouses.
The goal, according to Forbes’s Richard Kestenbaum in his article “The Radical Changes Coming to the Grocery Business,” is to maximize scale and automation.
“An Ocado warehouse has over 1,000 robots and can handle 220,000 orders per week,” Kestenbaum says. “Today Ocado has about 15% of the online grocery market in the U.K., has a market value of over $25 billion and is profitable (based on analyst normalized earnings).”
Another strategy, championed by Israeli company Fabric, is flexible warehouses. By building fulfillment systems in densely populated areas or inside existing stores, the company can convert a regional facility into a highly automated distribution center. By doing so, Kestenbaum says the system can “facilitate pickup or delivery to consumers within one hour [with] a relatively focused range of products.” Fabric says the system is flexible enough to fit into almost any existing space, no matter the size, shape or structural design constraints. The company says thousands of orders can be fulfilled every day by hundreds of robots within one of these centers.
Truck Bodies as Unique as a Retailer’s E-Commerce Operation
With such diverse methods for satisfying customers’ demand for faster, more convenient shopping, retailers’ needs for truck bodies uniquely tailored for their operation have become more important than ever. Great Dane is currently working with multiple retailers to develop highly engineered truck body solutions necessary to meet the needs of these individual e-commerce strategies. “We have a vast capability within the Great Dane organization to create either a standardized product or something very unique to the customer’s operation. I think that’s what sets us apart as an organization,” says Mayo Rude, Great Dane’s truck body division director of sales.
Rude says Great Dane takes a two-pronged approach when designing specialized truck bodies for retailers. The first step is having his sales team go through what he calls an “embedment process,” where they spend time with customers during actual workdays, talking, observing and even participating in the process, noting what truck body features are needed along the way. The second step is bringing the truck body design to fruition, but Rude explained this second step isn’t finished once the truck body is manufactured and delivered. Instead, thanks to the initial embedment process, Great Dane can work with the customer and continue to make design changes as both companies work toward a future of full automation.
“We have one customer that is very focused and invested in robotics and automation [in their warehouses]; they’ve taken it to this futuristic level, and it works,” Rude says. “Right now, everything is picked and put into a tote through the robotics and automation, then the tote travels down a conveyor to a human loader, who picks it up and slides it onto the cart. Each cart is then wheeled onto the body of the truck and secured. Then, the driver takes off.
“What we see happening is that the automation is carried all the way into the body itself. That means the human isn’t loading the cart. The cart is loaded onto the truck via automation and placed in the proper position. A human has no problems taking a cart and nestling it into its place on the truck; so, our job is to create a piece of equipment that removes obstructions and allows robotics to do the same action.”
Ultimately, Rude says, the automation won’t stop there. Great Dane is working now to be ready for a future that includes fully automated trucks, too.
“All indications are, as you look across the marketplace, an autonomous delivery vehicle on top of all that,” he says. “The human touch keeps getting minimized, and our portion of that is designing a body that compliments that direction.”