Efficient, streamlined logistics operations play a critical role in meeting consumer demand, increasing customer satisfaction and ultimately, reducing operational costs. In today’s competitive retail sector, optimizing logistics processes enables retailers to gain an advantage. In this article, we’ll discuss four ways to improve retail logistics to reduce operational savings, including:

• Implement resilient strategies
• Outsource to trusted third-party providers
• Leverage the right tools and technology
• Using predictive analytics

We’ll discuss these ideas in more detail later in this article, but first, let’s take a look at the challenges faced by retailers.

Retailers must adapt to changing conditions

Retailers must be flexible in order to handle consumer’s evolving shopping behaviors changing trade policies, inventory shortages, supply and demand disruptions and unpredictable delays in last mile deliveries. All of these challenges negatively impact bottom lines, credibility, long-term viability and market reach of affected brands.

To resolve these challenges, retain their competitive edge, grow their consumer base and operational savings, business owners are rethinking logistics processes and leveraging innovative solutions to bring their e-commerce and retail operations into the digital age. However, this is no walk in the park.

A viable solution pathway involves a reassessment of inefficient supply chains, existing legacy systems, traditional inventory management and fulfillment processes. More importantly, it requires retailers to review their retail logistics processes and take proactive measures to improve and streamline existing operational workflows.

Global marketplaces are dominated by brands that are proactive about driving operational efficiencies within their retail logistics workflows. Let’s discuss four ways to improve retail logistics and reduce operational costs.

1. Implement resilient strategies

The ripple effect of global bottlenecks, labor shortages and geopolitical conflict is driving the current climate of persistent unpredictability. It is the time for retailers to build flexibility and resilience into their retail logistics strategies and supply chains. Retail logistics resilience goes beyond the ability to wait out and survive disruptions. It entails having a logistics strategy that can pivot when necessary to handle unpredictable challenges.

Such a strategy focuses on risk diversification, increased consistency and the surplus availability of high-priority SKUs. It also includes the ability to quickly change fulfillment workflows when one or more bottlenecks surface. However, such resilience can only be achieved by collecting and analyzing real-time logistics data to facilitate end-to-end visibility and streamline retail logistics activities.

2. Outsource to trusted third-party providers

Outsourcing to providers with current retail logistics expertise can reduce costs, increase productivity and deliver a competitive edge to retail outlets and e-commerce stores. Top providers have the technology, domain expertise, infrastructure and time-tested strategies to design, implement and maintain a robust retail logistics framework for a retailer’s unique use case. This is advantageous for brands that have grown to the point where in-house fulfillment has become costly, time-consuming and inefficient.

Outsourcing frees up retailers to focus on strategic initiatives that drive revenue, customer satisfaction, business growth, product development and service differentiation. The best 3PLs enable businesses to easily expand into global markets by providing regional expertise (such as applicable laws and regulations in other countries), infrastructure (such as distribution centers) and established global shipping resources (such as air freight and sea freight). They also negotiate bulk carrier discounts to reduce delivery costs and time, enabling retailers to offer faster, affordable shipping to customers.

3. Leverage the right tools and technology

Aligning frontend customer journey touchpoints with inventory/warehousing backend operations is key to building a robust retail logistics strategy. Optimizing all inbound and outbound retail logistics activities to meet shoppers’ expectations around speedy, affordable delivery and easy returns processes requires investment in supply chain technology, infrastructure and employees who understand retail logistics best practices.

Leveraging robotics, automation solutions, demand planning systems, inventory management, logistics management and ERP software can help automate warehouse/fulfillment operations and gain a 360-degree view of all fulfillment activities. These tools can also help companies adapt their retail logistics strategy and optimize retail supply chains for omnichannel fulfillment and hybrid markets.

For example, Crocs’ ecommerce volume grew substantially in 2020. After implementing a new pop-up warehouse specifically for ecommerce fulfillment to meet demand, Crocs brought 83 Chucks (32 of which were for the holiday peak) into its operation.

The new warehouse ramped up from the first pick to full volume in just two days. Within the fourth quarter of 2020, Crocs’ warehouse associates:

• Picked about 3 million units
• Increased throughput by 182%
• Exceeded designed rates by 25%

Because associates no longer had to operate manual carts, their walking time was reduced by half. Training time was also decreased from one week to just one day, saving the company 32 hours of training time for every new associate.

4. Use predictive analytics

Predictive analytics help operations anticipate shifts in demand and supply, consumer trends, and potential risks. They can also provide insights around bottlenecks in the logistics process and make intelligent sales forecasts by analyzing historical and real-time logistics data. With this insight and forecasts, online retailers can better address supply and demand miscalculations and anticipate how factors (such as weather) may disrupt shipping schedules.

Predictive analytics can inform sales forecasting by using logistics data to understand consumer demands, identify turnover during different seasons and promotional periods, and track sales patterns/trends.

Other ways to improve retail logistics

The strategies above aren’t the only ways to improve retail logistics. Other improvements include:

• Adopting sustainable practices for last mile delivery and reverse logistics
• Investing in inventory and warehouse management solutions
• Strengthening backend admin management for retail logistics
• Reviewing, measuring, and analyzing retail KPIs
• Incorporate newer AI and automation technologies
• Reorganize procurement, fulfillment and shipping activities for omnichannel sales

Looking ahead

Regardless of your niche, consumer demographics or sales channels, these four strategies can help you reduce operating costs, improve efficiency and meet customer expectations. Retailers and logistics companies should leverage AMRs, data analytics, automation solutions, embedded integration technology and current trends impacting retail logistics to improve processes, boost performance and increase their competitive edge.

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With the advent of consumerization and the growing number of online shoppers and e-commerce outlets, it is increasingly difficult for retailers to satisfy their customers time and again. Competitive pricing no longer cuts it; savvy retailers today do all they can to stand out from the competition through service differentiation. The best way to do this is to streamline the retail fulfillment process.

In today’s consumer-focused marketplace, optimizing the retail fulfillment process is a great way to reduce costs and bottlenecks, improve customer satisfaction and boost your bottom line. In recent years, order fulfillment (especially retail fulfillment) has become a complex process with a lot of moving parts. Retailers looking to streamline their fulfillment processes must leverage the right technologies, solutions, strategies and channels.

To help you get started, let’s look at five ways to streamline your retail fulfillment process.

1.   Automate manual processes and data collection

Eliminating manual processes from your retail fulfillment workflows is a great way to improve accuracy and efficiency. From inventory management and order processing to picking/packing processes and last-mile shipment, there are automation tools, solutions and mechanisms that eliminate or reduce manual intervention to the bare minimum.

Leveraging new robotics technology and warehouse/fulfillment execution systems can help you optimize the movement, sorting, storage and picking of inventory. Furthermore, the right software solution (such as 6 River’s cloud-based Fulfillment Command Center, The Bridge) can seamlessly integrate with your ERP, WMS and other systems to seamlessly track the huge amounts of data generated by and circulating through your retail fulfillment center.

Whether it’s from sources such as customers, orders, picking process, trucks, drivers, last-mile shipment, etc., analyzing this data can help you further optimize throughput, manage your assets, plan labor and better orchestrate fulfillment workflow. However, collecting such reams of data manually is tedious and time-consuming. Automating the data collection process enables you to eliminate inaccuracies and gain more accurate insights into your retail fulfillment operations and workflow data.

2.   Leverage autonomous mobile robots to speed up fulfillment activities

There’s a plethora of automation solutions and customized software to help retailers manage the sorting, movement, storage, picking and packing of retail orders for last-mile delivery. A lot of these solutions come with high installation and operating costs and may require major overhauls to existing systems and infrastructure. To avoid this, retailers are looking for a scalable, flexible and affordable solution that requires little or no changes to their infrastructure.

Autonomous mobile robots (AMRs) work alongside human warehouse associates in your retail fulfillment center. They lead associates through their work zones to reduce walking, direct associates to the next pick location and guide associates through each task until the work is complete. AMRs are relatively easy to implement, require low initial set-up costs and significantly boost customer satisfaction rates by improving picking accuracy and accelerating fulfillment times.

3.   Choose the right pick and pack process

Optimizing inventory management speeds up the pick and pack order fulfillment process which translates into faster deliveries and happier customers. As such, it’s a good idea to double-check retail orders before shipping to ensure that the products match customers’ orders. It’s a waste of time, effort and money to deal with and resolve customers’ complaints as a result of wrong product shipments; that’s why choosing a picking method that’s suitable for your retail fulfillment needs is a recipe for success. Savvy retailers opt for automated picking solutions to facilitate and streamline order fulfillment activities within the fulfillment center.

4.   Implement an effective returns management process

Despite your best efforts, your customers may still return orders for a variety of reasons. Studies show that retailers’ average return rate was 16.6% in 2021. To prevent this from hurting your bottom lines and negatively impacting customer satisfaction, implement a returns management  that is every bit as efficient as your order fulfillment process. You can do this by using software with integrated returns management/processing capabilities.

5.   Reassess your order fulfillment models

Regardless of whether you use third-party marketplaces, in-store fulfillment, outsourced 3PLs, drop shipping or in-house shipping, assessing the efficiency of these models is the first step towards optimization. You can do so by integrating the software systems you use (warehouse management, accounting, inventory management, ordering and e-commerce) and collating the right data to assess the viability of your fulfillment models. With this data, you can ascertain:

• How to eliminate manual processes in the fulfillment workflow
• The time it takes to fulfill and ship an order
• If there are out-of-stock problems
• Damaged shipment rates
• Which product SKUs bring in the most sales

Also, take time out to first identify your customers’ most preferred channels. This will help keep your customers satisfied and coming back time after time.

Looking Ahead

With the rise of consumerization making for more informed shoppers, retailers can no longer compete based on product pricing alone. To grow their customer base and maintain/increase profit margins, retailers are looking to stand out through service differentiation. Streamlining the retail fulfillment process is a great way to do so and the above strategies can help retailers raise customer satisfaction levels and deliver desirable business outcomes time and time again.

Learn more about how you can optimize your retail fulfillment processes by downloading our white paper, How to Jump-Start Flexible Retail Fulfillment for Today’s Multi-Channel World.

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We all saw the shift from shopping in-store to online during the pandemic. And although e-commerce sales grew 14.2% in 2021, this growth is more on par with pre-pandemic levels as consumers are returning to in-store shopping. Omnichannel retailers must find a balance to support both in-store and online customers as shopping habits continue to change in 2022.

To be prepared for peak this year, it’s time to evaluate processes, from hiring seasonal labor to managing accurate inventory, in order to prepare for periodic spikes in fulfillment.

Flex labor to meet demand

Retailers need to add seasonal labor more often than the one time holiday sprint. This can be extremely difficult because not only is labor already scarce, but reliable labor is even harder to come by. Finding and hiring labor outside of “traditional peak” can be even more challenging. According to a recent survey by Modern Materials Handling, 60% of respondents said there were “too few candidates to interview”. This begs the question, how do you fulfill more orders with less labor?

To increase productivity and meet peak demand, operations should consider automating the picking (and replenishment) process. Speeding up fulfillment provides a competitive advantage, and enables your business to meet service level agreements (SLAs) such as same or next day delivery.

There are several technologies on the market, so when labor is hard to come by, make your existing labor force more efficient with tools that will enhance their job performance. For example, implementing barcode scanning to confirm picks will increase order accuracy. In addition, autonomous mobile robots can help attract, train and retain employees. By directing an associate directly to a pick location, the risk of human error is reduced and productivity increases, which means more orders going out the door.

Stay ahead with “just in case” inventory

Keeping inventory organized will help ensure more accurate inventory counts. With supply chain disruptions unexpectedly interfering with inventory availability, stocking additional Just In Case (JIC) inventory might be the way to go this season. Another consideration though is end of season turnover. After each season, sporting goods stores must liquidate or deeply discount products to free up storage space. To reduce the financial impact this has on an operation, be sure to look at historical data to find the sweet spot. The right amount of inventory on hand will help you avoid “out of stock” messages and can provide a competitive advantage against those less prepared.

Timing is everything. Another way to stay ahead is to consider fulfilling orders directly from stores to end users. Connectivity throughout all store locations and fulfillment warehouses will provide inventory information across your entire operation. This reduces stock outs and ultimately improves customer satisfaction.

Customer satisfaction is the ultimate goal

To keep customers coming back for more, retailers will need to provide excellent customer service in 2022. Therefore, getting orders out the door quickly and accurately is a necessity to earn repeat business. Additionally, meeting or exceeding delivery expectations and offering alternatives for pick-up such as curb side and buy online pick up in store (BOPIS) can attract new customers.

As order volume increases, so do returns. Operations need a solution to ramp up both order fulfillment and replenishment to keep up. Automation will not only benefit your business in the off season, but it will enable you to scale up quickly to manage the influx of customer orders and potential returns as well. Technology offers flexibility and scalability to meet the changing needs of your business. Using technology and labor together, will enable you to pick and putaway faster than labor alone.

Partnering with a warehouse fulfillment solution provider allows you to design your picking strategy to be flexible and scalable when you need it. Deploying autonomous mobile robots, increase efficiencies in your entire warehouse, starting with your labor force. Moving from picking to packing to putaway, AMRs can lead the way to faster fulfillment. Get ready for peak fulfillment with 6 River Systems!

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A white paper published by DHL found that inefficient handling of supply chains causes high costs, wasted resources, and reduced agility. It is evident that supply chains are a cost driver for a retail business, and the efficiency with which supply chain is handled will determine whether the business will generate a sustainable profit or go under. Here are five supply chain management tips for the retail industry to bring in sustainable profits.

1.  Implement automated ordering

Except for the rare brand like Supreme, which thrives on product scarcity, shoppers are not thrilled to encounter out-of-stock products. It hampers the brand image and leaves money on the table, which isn’t desirable for any business, especially in the retail business where alternatives are readily available for the consumer. Automated ordering alleviates the pressure on supply chain executives and also can take care of triggering replenishment orders automatically. Since every business is connected with technologies like ERP software, it is easier to implement such solutions and have the complete supply chain adapt readily to demand shifts.

2.  Leverage big bata, analytics and optimization

Supply chains were driven by numbers and statistics for a long time. Quantifiable performance indicators were always considered key metrics by supply chain executives. With the technology available today, companies can track goods from raw materials to the final products, even after the purchase cycle is complete and the products are delivered to end consumers.

When dealing with this volume of data, tracking and analyzing data using an Excel spreadsheet is not realistic, as billions of data points can be created every minute. According to a report by the American Productivity and Quality Center (APQC), investing in data analytics is a top priority for supply chains.

With big data analysis techniques, companies have the power to harness unstructured data and extract useful information out of it. Data that once would have been discarded can now be put to use, revealing avenues for optimizing the supply chain at an unprecedented rate. 36% of supply chain executives say that analytics is the top instigator for optimizing their inventory to balance supply and demand. Modern big data analytics tools are user friendly and have strong visualization tools to assist users in gleaning actionable insights from raw data.

3.  Automate warehouses and distribution centers

Warehousing is one of the important drivers of cost in the retail supply chain. There are plenty of opportunities to increase the profitability of a retail business through efficient warehousing. A lot of manpower, machines and systems are involved in the operation of a warehouse. Inefficiencies in any of these areas leads to an increased risk of errors and can create a bottleneck in the supply chain.

Order picking comprises 55% of the operational expenses of a warehouse, so reducing picking errors and improving order picking efficiency are obvious strategies when boosting profitability is the goal.

There are many levels of automation solutions available for warehouses. Amazon was a pioneer in warehouse automation, and today, there are many automation solutions within reach for any business. Collaborative mobile robots like Chuck by 6 River Systems are an intuitive and cost-efficient system that can integrate with your existing warehouse layout and offer faster ROI compared to traditional automation solutions, such as conveyor systems. For example, one leading 3PL implemented 6 River Systems’ solution within three months and achieved a full ROI within 18 months, with a 25% improvement on picking accuracy. In another case, a global retailer saw a 62% increase in pick rates within just three months after implementing 6 River Systems’ collaborative mobile robots solution while also reducing picking errors — at a fraction of the cost of traditional automation.

4.  Develop a cohesive strategy

The supply chain of a retail organization cannot function as a stand-alone organization. It has to work side by side with marketing, sales, finance, operations and other departments. One of the most important facets of supply chain management is demand planning. The sales and marketing departments provide the data necessary to develop an accurate model for predicting future demand, which in turn impacts supply planning. Similarly, other business functions are mutually dependent on the supply chain function.

It’s not just the departments within the company, but vendors, suppliers and distributors are also key elements of a supply chain. The success of each entity is dependent on the strong relationships built with its partner organizations. Supply chain management must be a collaborative effort with all company departments and partners, so breaking down information and communication silos is a top priority for supply chain executives.

5.  Consider 3PL solutions

Building an end-to-end logistics operation is cost-prohibitive and time-consuming, so many retailers turn to 3PLs. From behemoths like DHL and FedEx to regional 3PL players, there are many third-party logistics (3PL) providers that specialize in everything from warehousing and distribution to transport and last-mile delivery.

Leveraging a 3PL is a viable strategy to increase the profitability of your retail business. Many retailers find it more cost-effective to leverage 3PL solutions, particularly as their businesses grow and the retail logistics demands become too significant to manage. Utilizing the services of a 3PL allows retailers to focus their internal resources on the company’s core competencies.

These five supply chain management tips can help your retail organization achieve greater sustained profitability. By making smart investments in systems and solutions that can drive better decision-making and automate key business processes, retailers can boost productivity and efficiency for a healthier bottom line, both in the short- and long-term. To learn more about how collaborative mobile robots can help retailers address top fulfillment challenges, download our white paper, The Business Case for Collaborative Mobile Robotics.

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