Boxed Wholesale has invested heavily in fulfillment technology since its launch in 2013. And last week it unveiled another tool designed to get orders out the door quickly—self-driving vehicles that navigate through a warehouse and pick products.
The company’s new technology aids in fulfilling consumer orders as well as orders from businesses, through its Concierge program.
Boxed, No. 326 in the Internet Retailer 2017 Top 1000, is a web-only merchant of groceries and household products. Similar to Costco Wholesale Corp.(No. 8), Boxed mainly sells bulk products. The retailer says it generated more than $100 million in online sales last year. There is no membership fee required for consumers to buy from Boxed, delivery is free for purchases of $49 or more, and packages usually arrive within two days. Boxed also sells its own brand of affordably-priced goods. The retailer sells about 1,600 SKUs.
Initially, the self-driving vehicles will travel the picking route. Human warehouse workers pick the items and punch into a computer screen that the item has been selected and then the cart delivers the finished cart to a packer. This will increase picks per hour by an estimated 80%, Boxed says. Boxed also plans to use the vehicles for replenishment and transportation of supplies.
“Long term, we’re aiming to expand the functionality of the vehicles to complete other warehouse tasks that can be made more efficient,” says Will Fong, the retailer’s chief technology officer. “For example, rather than sending a human to restock a picking zone with paper towels, the vehicle could soon be able to recognize the need to replenish the product and complete the task, all without humans needing to get involved.”
A Boxed in-house team of two engineers developed the autonomous cart in 90 days. Now, Boxed is manufacturing hundreds of the carts (they are starting by naming each cart after a member of the Wu-Tang clan, such as Ghostface Killah and Method Man) to unleash in its warehouses. It plans to roll out between 30 and 40 in its Dallas warehouse in the next several months, Fong says.
Boxed first added the carts to its warehouse in Union, N.J. The retailer says it spent tens of millions of dollars on automation of that warehouse, which launched earlier this year, to triple the output of the 140,000-square-foot center without needing more space or workers. It’s now adding the self-driving carts to its fulfillment centers in New Jersey, Dallas, Las Vegas and Atlanta.
This isn’t the first time Boxed has used automation to benefit its business. This summer it unveiled Smart StockUp, a feature that predicts when shoppers will most likely run low on particular household products and makes it simple for them to reorder by sending them a reminder about the items they are likely running low on. Boxed is also taking Smart StockUp one step further with Concierge, which not only predicts when a shopper is running low on goods, but preemptively fulfills the order and sends a customer products without them needing to engage at all. Concierge is geared toward businesses. For example, a company might use Concierge to reorder office supplies or snacks, Boxed says. B2B orders make up 20% of Boxed revenue or about $20 million, Fong says.
Boxed uses machine learning to scan customer data and predict what shoppers are going to run out of. Machine learning describes the ability to program an algorithm that teaches a machine what it should be looking for so computers can learn over time when they are exposed to new data. Boxed’s in-house team of data scientists created the machine-learning algorithm in three months.
Boxed also recently announced it is rolling out a real-time auction platform for search ads. The platform works in much the same way that search-based ad-bidding platforms work on Google, Amazon.com Inc. (No. 1) or other platforms. As an impression loads in a shopper’s browser or app, information about the page and user is passed on to the auction platform, where it is auctioned off to the advertiser that is willing to pay the highest price. That winning bidder’s ad is then loaded almost instantly.