With the rise in online shopping, major retailers have had to make adjustments to fit the growing demands for e-commerce. After all, the supply chain for e-commerce is slightly different than that for in-store purchases. Target announced in early March that its tech for the store-based e-commerce Fulfillment is scalable and ready.

Target’s Choice of Store-based Fulfilment

Target has been working hard towards its store-centric e-commerce fulfillment plan for more than a year, letting it take advantage of the dense store network that Amazon does not have. In an investor presentation in early March, Target laid out exactly why and how their store-based fulfillment strategy would work and why the timing was right for it.

Dedicated Fulfillment Options

The most profitable and quickest-growing of Target’s fulfillment options are drive-up and pick up the same day. These provide the added benefit of not requiring any shipping or packaging.

The Target CEO said that of the store’s digital sales, the stores fulfill 80% of it. Those same-day services accounted for 24% of digital sales and helped drop the price per unit by 25%.

The skepticism towards Target’s store-centric approach comes more so from the digital sales that require shipping labels, boxes, and a carrier. In the investor presentation, Target outlined how this would be overcome by having a dedicated team on-site just for these purposes. There would be pickers, preppers, and packers. The handheld digital tools and carts help pickers do their job efficiently.

Using AI and Tech

Another challenge of store-based fulfillment is its potential impact on the shelves in the stores. Target is relying on machine learning to help predict inventory needs. The company is also using a robotics program that took several years to design. It sorts millions of units into various boxes that are assigned to an aisle in the store.

This technology means that the boxes with items do not need to enter the backroom. They can go right from the truck to the aisle, as all things will go to the same area. This virtually eliminates the need for Target teams to sort products multiple times, wasting time on restocking.

Yet another robotic system will take the boxes packed by the first and figure out how to optimally place them into a truck, then do so. The combination of the two robotics systems will streamline the process significantly.

Progress So Far

So far, the robotics system for sorting packed boxes is already in use at the Target in Perth Amboy, New Jersey, a fulfillment center. It will soon go to another facility and spread from there.

Sources:

https://www.retaildive.com/news/Target-tech-store-based-fulfillment-scale/573489/

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