Coachella attendees this year didn’t have to worry too much if they forgot sunscreen, sunglasses or a phone charger. They could go online, place an Amazon order and pick it up within hours at one of the ecommerce giant’s lockers around the music festival. Amazon’s move to offer rapid delivery to shoppers’ locations—coupled with its recent announcement to start providing one-day delivery for Prime customers—underscores the increasing delivery demands among online shoppers.
“The trend toward shorter fulfillment cycles is a result of the societal expectations to order something and get it within hours,” says Michael Vargo, president of Vargo, an ecommerce and omnichannel fulfillment technology and services provider. “Retailers realize they need to respond to their customers efficiently and accurately, no matter what they purchase, no matter when or where the purchases take place, and without regard for where the customer wants the order delivered or whether they want to order online and pick up in a store.”
But to meet this demand, retailers need full visibility of their inventory—and that’s an area in which they often struggle, he says. “In an omnichannel setting where fulfill-from-store is an option, issues arise because inventory is continually being touched, moved or damaged by in-store customers,” he says. “To be effective, fulfill-from-store options must be integrated into the rest of the fulfillment chain.”
The right fulfillment technology can help retailers overcome these types of inventory visibility challenges, but they’re often handcuffed by outdated systems that weren’t designed to handle ecommerce or omnichannel systems, Vargo says. “Flexibility will be important in any fulfillment operation as online retailers work to overcome the challenges they face in the supply chain landscape,” he says.
Because technology is in a constant state of flux, retailers must understand how new technologies best fit into their operations. “To meet customer demands, retailers need to be prepared to quickly adjust as their business offerings, requirements, profiles, service levels and overall needs shift rapidly,” Vargo says.
Forward-thinking retailers are partnering with integrators like Vargo to focus on their processes and to more effectively introduce automation and other new technologies, such as robotics, into their fulfillment systems to future-proof them. “We must make sure that the new technologies we are implementing are scalable, so that as retailers’ needs change or grow, the technology can grow with those needs for the long-term viability of the fulfillment center,” Vargo says.
American Eagle Outfitters Inc., for example, uses Vargo’s warehouse execution system COFE (continuous order fulfillment engine) to drive its fulfillment inside its omnichannel fulfillment center in Pennsylvania. The clothing retailer has implemented an automated storage retrieval system (AS/RS) within COFE to increase efficiencies in the fulfillment center. The AS/RS entirely automates the replenishment retrieval processes. COFE directs the AS/RS to pull inventory when it is needed, and because the AS/RS handles tasks that a human worker would normally do, American Eagle’s fulfillment system has fewer human touch points in its fulfillment center, leading to a faster, more efficient order flow—and ultimately faster delivery times.
As retailers scramble to compete with the Amazons of the ecommerce world, many are looking to overhaul their fulfillment and delivery systems in an effort to give the consumers what they are demanding, Vargo says. “That’s where Vargo comes in,” he says. “As a systems integrator, we simplify warehouse and fulfillment operations to reduce retailers’ operating costs and increase profitability, flexibility and processing speed.”Favorite