Once confined largely to the DC, voice technology has begun migrating to retail stores and backrooms. And yes, it's all a result of the e-commerce revolution.
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.
Brick-and-mortar stores are feeling the heat from online retailers that combine a seemingly limitless array of inventory with fast, free shipping. Under that pressure, a number of retail chains, among them industry stalwarts like Macy's, J.C. Penney, Sears, and Kmart, have shuttered dozens of locations nationwide.
But traditional retailers are hardly giving up the fight. In response to the threat, they're rethinking how they use their stores. In particular, they're looking for ways to turn what is often a vast network of physical retail outlets to their advantage. For many, the answer has been to expand their store-based fulfillment activities—in other words, to leverage those stores for the swift fulfillment of online orders. (Because retail outlets may be located closer to the customer than DCs are, store fulfillment can mean shorter order-to-delivery times.)
As fulfillment activity migrates to stores, it's probably no surprise that the tools used in the DC to support fulfillment are making their way over as well. Take voice technology, for example. Long popular in the warehouse and DC for directing tasks like order selection, voice systems have a solid record of boosting productivity and accuracy. That's largely because they enable workers to receive instructions via headsets, rather than looking at a screen, which frees up their eyes and hands to select items or perform other warehouse tasks.
So, many retailers have asked, Why not translate that tested method to the brick-and-mortar shop, where store associates could leverage the technology to stock shelves, look up prices, and assist customers? Visit a Staples office supply store, a Best Buy consumer electronics outlet, or a Kroger's grocery store, and you might see employees walking the floor with headsets.
VOICE HITS THE RETAIL FLOOR
Those headsets will likely become even more commonplace as stores get increasingly involved in order fulfillment. Voice can be a useful tool for stores that are starting to adopt some of the functions of warehouses, said Scott Powell, product management leader at Honeywell Voice Solutions, which markets voice-directed picking systems through its Vocollect brand.
"As the retail industry continues to be impacted by e-commerce, we're seeing stores become DCs to some degree," Powell said. For instance, many retailers have begun to merge their storefront and online operations by offering "click-and-mortar" services like buy online/deliver from store (click and deliver), buy online/pick up in store (click and collect), and curbside delivery.
As retail outlets take on those fulfillment tasks, voice can help in three ways, Powell said. To begin with, the technology enables employees to optimize their efficiency. Second, it helps standardize the level of service provided. And finally, it helps assure tasks are executed well regardless of which worker is on that shift.
Voice-directed work tools translate well from the warehouse to the retail floor when employees are performing repetitive yet detail-oriented jobs like order selection, inventory counts, stocking shelves, or updating prices. However, when you bring customer service into the mix, it can have some drawbacks. For instance, some retailers cite concerns that a worker's bulky headset will discourage shoppers from asking questions or seeking help, which could ultimately result in a lost sale.
One workaround is to choose sleek, lightweight headsets instead of ruggedized warehouse versions, Powell said. Another option is to pick a model with a microphone boom that, when lowered, pauses the voice direction so the associate can engage with a customer.
FINDING ORDER IN RETAIL CHAOS
Despite that potential, users should not expect to simply migrate voice-picking hardware from their DC to the store and instantly achieve DC-level results, experts caution. That's largely because retail work tends to be more chaotic than operations in the well-ordered warehouse.
"There are many best practices developed in the DC that can be applied to the store, but not all of them can," said Gary Oldham, vice president of sales at the Vitech Business Group, a voice-directed picking technology vendor. For example, while warehouse shelves are typically labeled with information like zone, section, and bin numbers to help workers locate items quickly, retail shelves lack that type of identifying information. That difference can affect a worker's ability to rapidly locate a product he or she needs to pick, Oldham said.
As users roll out the first retail voice pilots, many companies are discovering that they may have to use the technology differently on the retail floor than they do inside a warehouse, agreed Sean Wallingford, senior director of strategic operations at systems integrator Intelligrated Systems Inc.
The nature of the work in a retail environment means employees are often assigned to a wide variety of tasks—in a single day, they could clean floors, stock shelves, and receive products off a truck—while a warehouse worker usually concentrates on a single specialized job from sunup to sundown, he said.
"In the DC, everything is tracked and measured, then compared to an engineered standard for the number of people needed for the job," Wallingford said. "But stores have no idea how long it will take. They'll pull people off cash registers because a shipment of hot orders came in, and then customers see 20 registers with only one lane open because there are three people out back picking," he said.
FINDING A NICHE FOR VOICE
With all those distractions, voice technology probably won't be a good fit for every corner of the retail store, but retailers are testing a raft of approaches to find the ones that work best.
One such approach is to deploy voice technology only in certain physical segments of the brick-and-mortar store, like the stockroom. This has a couple of advantages. First, it insulates employees from the distractions of having to field queries about prices, discounts, inventory location, sizes, or returns. Second, it assures that shoppers won't be deterred by the technology from seeking the help they need.
Using voice in the stockroom instead of the display floor is an effective way to address concerns that the technology will create a virtual wall between employees and shoppers, said Frank Rossi, manager for North American business development at systems integrator Dematic Corp. Other solutions include picking inventory from shelves at slow times instead of peak periods, or simply having employees wear a button that reads "Have a question? Ask me."
Enhancements to technology are also helping to ease those concerns, since voice-recognition technology has improved greatly since voice-based tools first entered the DC, and the proliferation of voice-operated consumer devices has led to greater familiarity with the gear. "The public is getting more accepting if they walk into a retail store and see an associate wearing a headset, especially in direct-to-consumer or grocery sectors," Rossi said.
As for other applications for voice, some retailers are leveraging voice tools to accelerate the training and onboarding of workers, said Sean Elliott, vice president of corporate technology at HighJump Software Inc., which sells voice-directed picking technology through its Vitech unit.
Many companies are intrigued by the prospect of treating their store inventory as a small, forward-deployed DC, Elliott said. But achieving that goal means they have to retrain retail associates who are more accustomed to folding jeans and dressing mannequins than matching products with shipping slips. Voice systems, which are known for their user-friendliness, can be a good method for teaching store clerks new skills.
MORE ADVANCES TO COME
As competition from e-commerce players intensifies, so will the pressure on traditional retailers to match—or even exceed—their rivals' service levels. For some, that will mean stepping up their game where store-based fulfillment capabilities are concerned. In many cases, they'll look inside their own organizations for inspiration, analyzing their warehouse and DC operations for ideas they can leverage on the brick-and-mortar side, experts say.
"Stores are simply inventory points all around the country, and you have to leverage that value of having a physical footprint close to your customers," Intelligrated's Wallingford said. "So they're saying 'We've got tried-and-true solutions in the DC; let's see if we can apply them to retail.'"
Robotic technology has been sweeping through warehouses nationwide as companies seek to automate repetitive tasks in a bid to speed operations and free up human labor for other activities. Many of those implementations have been focused on picking tasks, a trend driven largely by the need to fill accelerating e-commerce orders. But as the robotic-picking market matures and e-commerce growth levels off, the robotic revolution is shifting behind the picking lines, with many companies investing in pallet-handling robots as a way to keep efficiency gains coming.
“Earlier in this decade and the previous decade, we [saw] a lot of [material handling] transformation around e-commerce and the handling of goods to order,” explains Josh Kivenko, chief marketing officer and senior vice president at Vecna Robotics, which provides autonomous mobile robots (AMRs) for pallet handling and logistics operations. “Now we’re talking about pallets—moving material in bulk behind that line.”
Kivenko explains that whether items are being packaged and shipped directly to a customer’s home address or moved as finished goods to a shipping bay for store delivery, those items are first moved in bulk in some way, often by human hands and with human-operated equipment. He describes warehouses as chaotic environments in which humans move pallets and cartons in multiple ways—up and down, side to side, from receiving to storage, from storage to shipping, or via cross-docking. Automation can help bring order to that chaos.
“What we’re trying to do is relieve some of the pressure [on the] humans [doing] this work,” Kivenko says of companies that develop pallet-handling robotic technologies. “At the end of the day, we’re trying to automate some of those flows, relieve labor pressure, save costs, and keep the goods flowing.”
But automated pallet handling isn’t right for every situation, so it’s important to understand the warehouse conditions required and the protocols and best practices needed to make it a win. Here are some guidelines for applying pallet-handling robots and gaining the most from your investment.
FIRST, UNDERSTAND THE TECHNOLOGY
Pallet-handling robots fall into four general categories, explains Rich O’Connor, vice president of storage and automation for Raymond West Group, a business unit of lift truck manufacturer The Raymond Corp. They include:
Palletizing/depalletizing robots, which are used to load or unload items onto and off of pallets, usually with the use of a robotic arm for picking and placing. Today, these systems are being increasingly integrated with automated storage and retrieval systems (AS/RS) to further streamline pallet handling in the warehouse, O’Connor explains.
Autonomous guided vehicles (AGVs) and autonomous mobile robots (AMRs), which are used to transport pallets within the warehouse. Often outfitted with lift decks or conveyors, or designed to tug or tow items, these robots move pallets from point A to B within a facility. AGVs, which often follow a marked guide-path or wire in the floor, have been around for many years, but the advent of high-performance guidance and vision systems is allowing them more flexibility today, O’Connor says. AMRs are self-guided vehicles that use software and sensors to navigate their way through the warehouse.
Forklift AGVs and AMRs, which can move products both horizontally, from place to place, and vertically, into and out of storage racks. They come in various styles—including stackers, counterbalanced trucks, reach trucks, and even very narrow aisle (VNA) vehicles for use in densely packed warehouses. These vehicles are more complex than those used only for horizontal transport, O’Connor explains. They must be “highly integrated” into the facility’s warehouse management system (WMS) or warehouse execution system (WES) so that they know precisely where to retrieve and deliver pallets within the facility.
Robotic pallet shuttles, which move pallets into, out of, and within dense storage racking. The Raymond Corp. describes such a system as “a standalone, automated deep-lane pallet storage system that utilizes self-powered shuttle carriages to move pallets toward the back or front in a racking channel. Shuttles are motor driven and travel along rails within a storage lane.”
O’Connor and others say that no matter which of these technologies you’re investing in, it’s important to remember that they are all part of a larger system designed to optimize operations throughout the warehouse.
“The expanding role of all these different styles working together is what’s amazing today,” O’Connor says.
SECOND, ENSURE THE TECHNOLOGY IS A FIT
Kivenko, of Vecna, also emphasizes the importance of pallet-handling robots working in concert, particularly AMRs and AGVs.
“The magic isn’t just that the robots are autonomous and driving by themselves. The magic is multiple robots—when you have a [whole integrated] system [in place],” he says. “[It’s] how the fleet operates autonomously and optimizes itself for continuous improvement. That’s where the exponential gains are. [It’s] not just about automating what a worker does; it’s about automating a system.”
But you can’t install these systems in just any warehouse and expect magic. Kivenko and others point to certain conditions that enable the best robotic pallet-handling outcomes, especially when it comes to transportation-based and forklift-type AMRs and AGVs.
“The robots that I sell are large-load machines with very expensive technology,” Kivenko explains. “They move material, generally, in larger facilities. And in order for them to produce a return [on investment]—because that’s the name of the game here—they have to be higher-velocity facilities.”
He says pallet-handling robots work best in large facilities running multiple shifts, usually more than five days a week. Wider aisles allow the equipment to move more freely through the facility and at higher speeds, to optimize efficiency and productivity. Strong Wi-Fi networks and clean, dry environments also help keep equipment running at top performance.
O’Connor agrees that pallet-handling robots are best suited to facilities with multishift operations, where they can ease labor constraints and boost productivity. And he says many customers are willing to extend the typical two- to three-year ROI period to five years in order to achieve those gains. But there is even more to it than that. O’Connor’s colleague John Rosenberger says customers must first step back and analyze their processes to ensure that, even if they have the right facility for pallet-handling AMRs or AGVs, they are moving material in the most efficient way to begin with.
“Many times, we find that the processes in place [are inefficient],” says Rosenberger, who is director of iWarehouse Gateway and global telematics for The Raymond Corp. He emphasizes the importance of analyzing existing data—from an equipment telematics system or similar—to determine the best path toward automation.
“Do you have congestion zones now?” he asks. “They’ll still exist if you automate [those processes exactly].”
THIRD, MAKE SIMPLICITY A PRIORITY
Another basic rule of thumb when implementing pallet-handling robotics: Keep it simple.
Andy Lockhart, director of strategic engagement for global warehouse and logistics process automation company Vanderlande, says that when designing a pallet-handling robotics system, “you want to minimize the processes you [automate]. When you can create [an automated system] that focuses on one task—for example, AMRs delivering pallets from a high-bay [storage rack] directly to the palletizing cell—you can do that efficiently and effectively. When you ask the AMR to do this and this and this … you are adding risk of failure.”
Lockhart’s colleague Jake Heldenberg advises customers to first test their target processes via pilot programs within the warehouse or DC. Heldenberg is Vanderlande’s head of solution design, warehousing, North America.
“If AGVs or AMRs for pallet handling are interesting [to a customer], the best thing to do is pilot one or two in an existing DC,” he says, explaining that the process can help companies troubleshoot, understand integration timelines, and gauge ROI. But pilot programs can add expense to a project, making it unaffordable for some.
“If that’s the case, then the best advice is work with a vendor who has experience integrating [the technology],” Heldenberg says. “Use their experience to benefit your business. You won’t have the same hiccups and challenges you would with a less-experienced vendor.”
Jeremy Van Puffelen grew up in a family-owned contract warehousing business and is now president of that firm, Prism Logistics. As a third-party logistics service provider (3PL), Prism operates a network of more than 2 million square feet of warehouse space in Northern California, serving clients in the consumer packaged goods (CPG), food and beverage, retail, and manufacturing sectors.
During his 21 years working at the family firm, Van Puffelen has taken on many of the jobs that are part of running a warehousing business, including custodial functions, operations, facilities management, business development, customer service, executive leadership, and team building. Since 2021, he has also served on the board of directors of the International Warehouse Logistics Association (IWLA), a trade organization for contract warehousing and logistics service providers.
Q: How would you describe the current state of the contract warehouse industry?
A: I think the current state of the industry is strong. For those that have been focused on building good client relationships over the years, I think it’s a really exciting time. Coming out of all the challenges of the past few years, I think there’s a lot of opportunity for growth and deeper partnerships. It’s fun to see the automation and AI (artificial intelligence) integration starting to evolve [in a way that’s] similar to what we saw with WMS (warehouse management systems) in the early 2000s.
Q: You are now president of your family firm. Is it an advantage having grown up in the business as opposed to working elsewhere?
A: I definitely believe it was an advantage growing up in the business. Whether it’s working with family or someone else in the industry, there’s always an advantage when you have mentors[to guide] you. I’ve been blessed to have several mentors, some in the industry, others just in life, and I’m thankful that they were willing to mentor me and that I was willing to listen to them.
Q: What are the biggest challenges currently facing 3PLs, and how are you addressing them?
A: Labor and legislation are both tough right now. The two seem to have a lot to do with each other, and it can make it tough to find and retain people. So I think we’ll see more and more automation of processes industrywide.
Q: Third-party service providers often must handle a wide variety of products for a lot of different clients. Does this variety make it difficult to invest in automation and other new technologies?
A: It can make things more difficult when looking at certain automation, but it’s in the “difficult” that a lot of opportunities lie. It would be tough to find a single solution that fits every client’s needs, but there are always opportunities to improve in certain areas. It just takes a bit of vision and commitment, and a willingness to invest in your own long-term success.
Q: As a 3PL, what do you look for when selecting the clients you work with?
A: Quality relationships that will last a long time. When both parties are happy and working together in the same direction, everyone wins.
Q: You’ve been a board member of the International Warehouse Logistics Association since 2021. Why is your involvement with this organization important to you?
A: I think it’s important to understand what’s happening in the industry. IWLA is a great resource for staying up to date and getting a solid education when it comes to the latest logistics trends. I also think it’s important to give back and pass along what we’ve learned to those just getting started in the business. As important as it is to have a mentor, it’s just as important to mentor and help others.
“While there have been some signs of tightening in consumer spending, September’s numbers show consumers are willing to spend where they see value,” NRF Chief Economist Jack Kleinhenz said in a release. “September sales come amid the recent trend of payroll gains and other positive economic signs. Clearly, consumers continue to carry the economy, and conditions for the retail sector remain favorable as we move into the holiday season.”
The Census Bureau said overall retail sales in September were up 0.4% seasonally adjusted month over month and up 1.7% unadjusted year over year. That compared with increases of 0.1% month over month and 2.2% year over year in August.
Likewise, September’s core retail sales as defined by NRF — based on the Census data but excluding automobile dealers, gasoline stations and restaurants — were up 0.7% seasonally adjusted month over month and up 2.4% unadjusted year over year. NRF is now forecasting that 2024 holiday sales will increase between 2.5% and 3.5% over the same time last year.
Despite those upward trends, consumer resilience isn’t a free pass for retailers to underinvest in their stores by overlooking labor, customer experience tech, or digital transformation, several analysts warned.
"The 2024 holiday season offers more ‘normalcy’ for retailers with inflation cooling. Still, there is no doubt that consumers continue to seek value. Promotions in general will play a larger role in the 2024 holiday season. Retailers are dealing with shrinking shopper loyalties, a larger number of competitors across more channels – and, of course, a more dynamic landscape where prices are shifting more frequently to win over consumers who are looking for great deals,” Matt Pavich, senior director of strategy & innovation at pricing optimization solutions provider Revionics, said in an email.
Nikki Baird, VP of strategy & product at retail technology company Aptos, likewise said that retailers need to keep their focus on improving their value proposition and customer experience. “Retailers aren’t just competing with other retailers when it comes to consumers’ discretionary spending. If consumers feel like the shopping experience isn’t worth their time and effort, they are going to spend their money elsewhere. A trip to Italy, a dinner out, catching the latest Blake Lively and Ryan Reynolds films — there is no shortage of ways that consumers can spend their discretionary dollars,” she said.
Editor's note:This article was revised on October 18 to correct the attribution for a quote to Matt Pavich instead of Nikki Baird.
A real-time business is one that uses trusted, real-time data to enable people and systems to make real-time decisions, Peter Weill, the chairman of MIT’s Center for Information Systems Research (CISR), said at the “IFS Unleashed” show in Orlando.
By adopting that strategy, they gain three major capabilities, he said in a session titled “Becoming a Real-Time Business: Unlocking the Transformative Power of Digital, Data, and AI.” They are:
business model agility without needing a change management program to implement it
seamless digital customer journeys via self-service, automated, or assisted multi-product, multichannel experiences
thoughtful employee experiences enabled by technology empowered teams
And according to Weill, MIT’s studies show that adopting that real-time data stance is not restricted just to digital or tech-native businesses. Rather, it can produce successful results for companies in any sector that are able to apply the approach better than their immediate competitors.
“ExxonMobil is uniquely placed to understand the biggest opportunities in improving energy supply chains, from more accurate sales and operations planning, increased agility in field operations, effective management of enormous transportation networks and adapting quickly to complex regulatory environments,” John Sicard, Kinaxis CEO, said in a release.
Specifically, Kinaxis and ExxonMobil said they will focus on a supply and demand planning solution for the complicated fuel commodities market which has no industry-wide standard and which relies heavily on spreadsheets and other manual methods. The solution will enable integrated refinery-to-customer planning with timely data for the most accurate supply/demand planning, balancing and signaling.
The benefits of that approach could include automated data visibility, improved inventory management and terminal replenishment, and enhanced supply scenario planning that are expected to enable arbitrage opportunities and decrease supply costs.
And in the chemicals and lubricants space, the companies are developing an advanced planning solution that provides manufacturing and logistics constraints management coupled with scenario modelling and evaluation.
“Last year, we brought together all ExxonMobil supply chain activities and expertise into one centralized organization, creating one of the largest supply chain operations in the world, and through this identified critical solution gaps to enable our businesses to capture additional value,” said Staale Gjervik, supply chain president, ExxonMobil Global Services Company. “Collaborating with Kinaxis, a leading supply chain technology provider, is instrumental in providing solutions for a large and complex business like ours.”