Top Global Retailers Facing Critical Warehouse Challenges this Holiday Season

Dec 14, 2018 · 6 min read

Tis the season for higher online sales, returns, and critical warehouse challenges that can cripple ecommerce and fulfillment facilities.

Online retail sales continue to boom, and more so now that the holiday shopping season is in full swing. Ecommerce is certainly one of the fastest growing industries, but growing pains are being felt behind the scenes in warehouses. Especially warehouses that serve as ecommerce and multi-channel sales fulfillment facilities. Add returns management into the mix, and you create an epicenter for volatility.

We have seen this first-hand, since many of the world’s top global retailers and manufacturers have partnered with us to process their returns in order to maximize sell-through and recovery.

33 Percent of Retailers Find Meeting Fulfillment Demand Challenging

Scalability and fulfillment are among the top challenges for retailers, especially during seasonal shifts, like the current holiday season. In fact, almost 33 percent of retailers said that visibility throughout the supply chain is lacking in order to meet their multi-channel fulfillment needs.

When considering the holiday shopping season, managing and meeting fulfillment demand can become even more troublesome for retailers. Holiday season online retail sales account for around 25 percent of all ecommerce annual sales, and the 2018 holiday season may be one of the highest sales years to date.

2018 Holiday Season Retail Sales Expected To Surpass $1 Trillion

According to Deloitte’s annual forecast, ecommerce sales are estimated to grow 22 percent. That’s astonishing, since last year’s holiday season clocked in at 16.6 percent. In fact, estimated holiday season retail sales are expected to surpass $1 trillion.

“Deloitte is predicting e-commerce sales by themselves could reach as much as $134 billion this holiday season, compared with about $110 billion a year ago,” CNBC reporter Lauren Thomas explained.

This increase in holiday sales can impact warehouse fulfillment processes in the ecommerce and multi-channel sales space. And that is only the sales made. The aftermath is far more concerning, because the return rate will subsequently increase from its already volatile 30 percent for ecommerce.

Increases in Retail Sales and Returns are Not Solely a Seasonal Challenge for Retailers

The hard truth is that ecommerce multi-channel sales and returns present a critical challenge for retailers anytime of the year. Seasonal increases simply make matters worse. The rising return rate alone has essentially caused a ripple effect that warehouse managers and retailer executives are scrambling to find a solution for.

Why is this a critical challenge worth solving? Retailers are beginning to see exponential value in maximizing sell-through and recovery on returns, as well as the importance of having curated complex data and intelligent analytics of their reverse logistics processes.

There are a lot of warehouse processes that need to be scalable and streamlined in order to keep inventory moving from facility receiving bays to pick, pack, and ship. Reducing touches throughout the entire reverse logistics workflow also needs to be part of the equation, since recovering the most value on a returned item is the aim.

How can retailers overcome these critical warehouse challenges during before, during, and post holiday shopping season? AI technology and robotics.

AI Technology and Robotics Reshaping Warehouse Management and Workflow

In order to scale warehouse management and workflow, retailers and manufacturers are turning to experts in supply chain, returns management, and multi-channel sales. We know this, because many of the top global retailers and manufacturers are using our AI powered SaaS tool and robotics.

In fact, all of our clients are relying on not only our AI technology and robotics, but also leveraging our ability to handle their inventory of returns in our facilities.

This allows retailers and manufacturers to scale and meet multi-channel ecommerce and fulfillment demand without building out their own warehouses, which can be costly.

By providing an end-to-end supply chain and multi-channel sales solution supported by AI technology and robotics, we are helping retailers and manufacturers make smarter decisions at every touch throughout the supply chain. It supports our vision of a truly intelligent circular economy.

Artificial Intelligence (AI) Powered Solutions

For instance, the goTRG 9040™ AI Disposition Engine decides where a product should go at the point of return, such as RTV, restock, refurbish, liquidate, recycle, or hazmat. This allows retailers and manufacturers to get the highest recovery possible on their entire inventory.

The command node of these AI powered solutions is our SaaS tool — R1 Cloud. R1 Cloud utilizes complex data gathering and deep learning analytics for the best sell-through and recovery for every touch, movement, sort, and pricing decision. Last year, our R1 Cloud SaaS tool collected and curated data for 40+ million UPCs from 1000+ marketplaces.

This is certainly no ordinary SaaS tool, since R1 Cloud integrates supply chain and multi-channel workflows into a sole cloud platform. In conjunction with our cutting-edge warehouse management system (WMS), barcoding, RFIDs, and QR codes are incorporated into our system for total visibility. This lets retailers and manufacturers capture every operational process for every item.

R1 Cloud also streamlines the pick, pack, and ship workflow by utilizing the above mentioned customized product labeling. From customized fail safes to automated customer notifications, the logistical precision of AI warehouse management and workflow is unprecedented.

Automated Robotics Maximizing Warehouse Efficiency and Productivity

Utilizing innovative technology to reshape the future of warehouse management and workflow is in many ways tethered to automated robotics. The large amount of products cycling through facilities poses a challenge, simply because many retailers and manufacturers do not have the warehouse space or efficient workflow to efficiently handle it.

However, automated robotics paired with our AI powered technology, like R1 Cloud and the 9040™ Disposition Engine helps retailers and manufacturers overcome today’s challenges, especially during the holiday season. goTRG has processed, listed, and sold over 50 million units with a retail value of $3+ billion annually.

For us to scale and meet such a high fulfillment demand, we leverage AI powered automated robotics:

  • Modular Sorters: We use modular sorters that configure dynamic sorts with a few simple clicks in R1 Cloud for individual items, categories, and fulfillment sorts. The modular sorters also capture images, weight, and dimensions of items, feeding the data into R1 Cloud.
  • Automated Guided Vehicles: Utilizing automated guided vehicles (AGVs), we fulfill orders autonomously. The AGVs move and work harmoniously together in the warehouse for maximum efficiency.
  • Automated Pickers: Our automated pickers communicate with R1 Cloud’s order management and fulfillment tools, optimizing fulfillment and creating a more efficient and productive warehouse workflow.
  • SKU-BOT: We take automation to the next level with SKU-BOT. This automated robotic technology is an untethered item put away and autonomous picker.

Wrapping Up . . .

It may be time to face critical warehouse challenges head on, and not only during the holiday season. Ecommerce sales and return rates are projected to climb year-over-year. Having a scalable ecommerce and multi-channel fulfillment process in one fully-managed solution is the answer. What warehouse challenges are you facing?

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