It’s hard to imagine a more challenging time for retailers. Their customers’ steady migration to online purchasing has dramatically accelerated due to the COVID-19 pandemic. Keeping those customers means keeping them satisfied, and retailers are finding they can’t do that alone. Since the complexities of e-commerce are intense, retailers are increasingly relying on experts in the field. That reliance has put companies like XPO Logistics in the spotlight, providing us an excellent opportunity to share our experience as retailers face consumers’ changing expectations.
Fulfillment specialists live and breathe seasonal peaks, and we’ve been in peak mode since shortly after the pandemic began. Consumers working from home and limiting their outside activities have created huge spikes in demand for such products as office electronics, home improvement supplies and workout equipment. With the approach of the holiday season— coming amid the pandemic to create the mother of all peaks— we certainly have our work cut out for us. That’s where our technology comes in.
It would be impossible to scale that monster peak without the advances in logistics automation we’ve helped pioneer. Giant warehouses with a footprint of 1 million sq. ft. or more are equipped with “cobots,” automated pick carts that work with our associates to improve accuracy and boost productivity by as much as 100%. On a more advanced level, AI-powered robots bring shelves to a stationary associate, a system that’s four-to six-times faster than conventional picking methods.
What makes all of this work so seamlessly is our proprietary warehouse management software, which interfaces directly with customers’ systems to provide visibility into inventory flows. Our teams of data scientists have developed other proprietary systems that jack up productivity, including analytics that enable highly accurate demand for casting and efficient manpower planning.
Using Technology To Get Returns Right
The other side of the e-fulfillment coin is the science of returns processing. Up to 30% of online purchases will be returned, meaning that consumers are our supply chain operation’s single largest vendor. And that gets complicated. In fact, it’s probably the hardest thing we do.
When we receive a shipment from Vietnam, Bangladesh or China, it arrives in uniform boxes on a pallet, with advance notification, documentation and tracking information. When we receive a shipment from a consumer, it may arrive in the form of a sweater stuffed into an old shoe box, with or without the original tags and packaging or a shipping label. We need to process that item as efficiently as possible in order to credit the customer and get the item back into inventory. The clock’s ticking, especially on fashion and seasonal items, and what makes it doable is our tight integration and interfacing with customers’ systems. That cohesiveness enables us to quickly identify the item and create an electronic record for it so we can beat the clock.
Heroic Efforts In Tough Times
But as highly as we value our technology, we never forget that none of this would be possible without the skills and dedication of our frontline workers.They and their peers across the industry persevered throughout the pandemic under the most trying of circumstances. They worked every day to keep our way of life going, even when it meant facing new challenges.
Every frontline worker, whether in a warehouse or in a truck, for our company or any of our competitors, kept our country moving forward. Their work provided us with the essential goods we needed when our way of life got upended. They’re the ones who ultimately deserve the credit for giving us a sense of normalcy. For XPO, they helped cement our reputation as a trusted retail business partner, and for that we're thankful.