Where robots fit into the online grocery store ops equation
Supermarket retailers are faced with a huge labor challenge. The explosion of ecommerce is amplifying this by creating the need for more order pickers, whether store employees or third-party providers, to manually fulfill e-grocery orders from stores.
Grocers are taking several approaches to address the issue. The initial goal is to improve manual order picking speed and accuracy. What worked when ecommerce order volumes were low no longer handles the larger volume of ecommerce orders being fulfilled today.
To get more orders out of the same headcount, retailers use a combination of technology, process improvements and sometimes shelves in the back of the store with fast-moving inventory that’s dedicated to filling online orders. Each of these steps can help retailers move toward achieving pick rate targets of 65 to 75 items per hour.
But pick rate improvements only solve part of the problem. There remains the issue of overcoming shopper dissatisfaction with substitutions and out of stocks. Compounding this is the challenge of picking orders from a dynamic inventory of live store shelves that makes it difficult to know what’s in stock.
As e-grocery volumes continue to increase, some retailers have started adding automated systems to further reduce labor and improve order accuracy. Current systems on the market can provide a variety of functions, including storing items, picking orders, handling store-picked orders and dispensing orders across ambient, refrigerated and frozen products.
Automation can improve pick rates by eight to 10 times, which becomes critical as order volumes climb. These systems also deliver the added benefits of reduced labor requirements and increased order accuracy due to the total visibility of products available for sale.
When items are out of stock, retailers must resort to a substitution process that can include calling or texting a customer, which further reduces pick rates in any system. Substitutions and incomplete orders also contribute to lowering customer satisfaction levels. Shoppers have been trained to get what they order through digital-first retail and won’t understand why e-grocery breaks the ecommerce promise.
It’s true that automated systems require a significant upfront investment and are best suited to support higher e-grocery order volumes. But the payout in getting more orders out of the same workforce and meeting customer expectations are two powerful advantages over manual picking.
DISCUSSION QUESTIONS: What are the best strategies and tactics for grocery retailers when bringing in automation to replace manual online order fulfillment at the store level? How quickly will fulfillment automation come to the majority of supermarket chain stores?