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The Technology Transformation of the Back of the Store (And Why It Matters)

The arrival (and enthusiastic acceptance) of same-day delivery has enhanced customer satisfaction levels like never before. But imagine the pressure it puts on retailers! To keep up, retailers can no longer consider storage, sorting, packing, and delivery as individual operational functions. It is time they combine all back-store processes into one single, agile, fluid movement. 

This is where technology comes into play as a crucial enabler of speed, agility, and performance management. 

Modern technology innovations can truly transform the back of the store, empowering retailers to operate (and succeed) in a highly competitive, agile, and volatile era. Read on as we shed light on how the retail landscape has changed over the years and how (and why) the technology transformation of the back store is crucial. 

The Retail Landscape Has Changed Tremendously Over the Years 

The retail landscape is no longer what it used to be. With increasing competition and evolving customer expectations, retailers are having a tough time differentiating themselves. While many retailers are increasing sales and doubling down on conversion tactics, there is a pressing need for rapid order fulfillment. Same-day/next-day deliveries have become the norm and are now a key factor in building customer loyalty. 

According to a study, the global same-day delivery services market grew from $6.44 billion in 2022 to $7.93 billion in 2023 and is expected to grow to $15.8 billion in 2027. Several factors, such as the ongoing Russia-Ukraine war, a surge in commodity prices, and supply chain disruptions, led to this growth. Increasing urbanization, the use of smartphones and tablets, the digitalization of payment, and convenient purchasing options are also contributing to the growth of the same-day delivery market. 

As the new year dawns, the retail landscape continues to undergo significant transformation. 

  • Fulfillment is shifting further into the last mile, leading to the growing importance of store-backs, dark stores, and micro-fulfillment centers (MFCs).
  • Customer journeys are becoming more complex and spread across channels. Many customers prefer doing their research online, completing the purchase transaction on the retailer’s mobile app, and then picking up the items in-store within an ever-shrinking timeframe. 
  • On-demand consumption behavior is compelling retailers to focus on shrinking the time cycles between placing an order and getting it fulfilled. 
  • Looming economic uncertainty requires retailers to uncover innovative ways to optimize inventory levels in real-time and ensure products are always available when needed.
  • Supply chain disruptions cause several delays in delivery while also increasing logistics costs, production cycles, and operational risks. 
  • As the continued shortage of labor disrupts day-to-day operations, retailers will be forced to enable higher levels of automation across every aspect of the back store. 
  • With consumer demand for shorter order turnaround times rising, decentralization of fulfillment centers is indispensable to meet the demands of shorter order turnaround times and reduced order processing costs.

Transforming the Back Store with Modern Technology 

As customers exhibit increasingly fast-paced buying patterns, click-to-door speeds continue to shrink! To enable efficient back-store operations, retailers must plan for the technological transformation of the back of the store. Using technologies like automation, they can enable a paradigm shift in how back-store operations are carried out. These technologies can help retailers: 

  • Meet evolving customer expectations: Robotic, low-touch automation is a great way for retailers to keep up with customer demands. Robotic systems and solutions that are built for modern-day fulfillment centers and MFCs can truly transform the back store – enabling retailers to meet evolving customer expectations. 
  • Decentralize fulfillment: A deep tech-enabled robotic fulfillment stack that is exclusively designed for stores and MFCs can enable retailers to decentralize fulfillment and cope with increasingly on-demand consumption patterns. Such decentralization can increase the flexibility of deliveries, lower transport costs, and dispatch goods with shorter delivery times. 
  • Enable smart storage and sorting: Using automation systems in combination with advanced technologies like AI and IoT, retailers can optimize back-store operations and increase productivity. These technologies can help optimize and streamline inventory management, order fulfillment, and logistics, allowing retailers to accurately track and manage stock levels and facilitate order processing. Smart storage can also help optimize space utilization, provide easy access to products, and minimize manual labor in the back store.
  • Keep up with demand: Automation technology can also help streamline store-backs, dark stores, and MFCs to enable next-day, same-day, and on-demand deliveries. They can help retailers overcome common inefficiencies and meet turnaround expectations in the last mile – while delivering a great fulfillment experience. 

In today’s digital era, same-day delivery is not just nice to have, but a core necessity for business growth and success! As competition increases, quicker delivery and a seamless fulfillment experience are sure-shot ways of driving customer satisfaction. With the massive shift happening in the way fulfillment centers are structured and operated, retailers must embrace the world of intelligent automation to streamline back-store operations, decentralize fulfillment, and keep up with fluctuating demand. Are you looking to keep up with on-demand consumer behavior and ‘wow’ consumers by moving goods with the same agility as moving data? Do you want to shrink the last mile to the last minute for instant fulfillment? At Cartesian Kinetics, we believe that great fulfillment generates greater demand. Contact us to decentralize fulfillment and embrace the world of automation for a successful and sustainable future.

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