6 Ways IoT Is Impacting Retail Fulfillment

IoT is changing the retail industry, specifically looking at the order fulfillment and logistics subsectors. This post covers the growth of "demand-aware" warehouses, real-time supply chain management, order fulfillment and smart stores.

The Internet of Things (IoT) has reshaped the ways people live. They can get weather forecasts or morning commute updates by giving voice commands to their smart speakers, and they can see who’s on the doorstep by launching smartphone apps connected to their security cameras.

Something consumers may not think about is how IoT has made more things possible in retail fulfillment. Here are six examples.

1. Spurring the Rise of Demand-Aware Warehouses

The team members who work in retail warehouses have direct effects on the stock levels in a store or on an e-commerce website. Shoppers may never see them, but those employees ensure people can buy the things they want and stay satisfied.

There’s an increase in demand-aware warehouses that use automated and connected technologies to monitor customer-facing stock levels continually and to give warehouse team members notifications when products sell exceptionally quickly. Then, merchants can stay abreast of customer needs and not miss opportunities.

At warehouses that still use paper-based systems, the workers take a reactive approach and respond to notifications that a store’s stock is running low or has sold out. However, smart warehouses can give real-time visibility and provide insights about the hottest-selling items and other essentials.

2. Keeping Track of How Goods Move Through the Supply Chain

Retailers need to know when to expect the merchandise purchased from suppliers, as well as to feel confident it will arrive in a ready-to-sell condition. IBM is among the companies working with IoT solutions that monitor the movement of goods through the supply chain.

Research about that project showed that a shipment of refrigerated goods traveling from East Africa to Europe could encounter almost 30 people or organizations along the way and have hundreds of associated communications between those parties.

IoT sensors can also keep tabs on movement at a more localized level, such as to tell a logistics manager that one of the trucks in a company’s fleet met heavy traffic en-route.

3. Sorting Warehouse Items for Shipment or Restocking Faster Than Before

Since major carriers increase their service rates and surcharges by at least 4.9 percent each year, it’s not surprising that one of the e-commerce fulfillment trends of 2018 involved companies using extensive analytics to figure out the best ways to ship their items.

As that trend continues, companies are also making parcel preparations more efficient through IoT tech. Then, as suppliers figure out the ideal ways to ship things, they can avoid slowdowns at the warehouse level that could cause delays.

A connected, robot called the “t-Sort” comes up alongside a “pick-and-place” robot, receives an item from it, and then drives that item to another part of the facility and deposits it in a bin.

This type of sorting works well when merchandise is getting prepared to go on the sales floor or to be sent to a store. The automation aspect reduces the need for human capital and readies the goods for the next phase quicker than people alone could.

4. Maintaining Accuracy As Operations Scale Up

Ensuring people get the right products is a crucial part of order fulfillment. If retailers or customers receive the wrong stuff, frustrations inevitably result. Hudson Bay, the oldest retailer in North America, relies on numerous aspects of IoT to keep people happy and to fulfill orders quickly while reducing errors.

Customers place orders, which are received by a warehouse management system that interacts with a warehouse control component. People and robots work together to complete an order in only 15 minutes.

Hudson Bay’s warehouse processes up to 70,000 orders per day and has reportedly enhanced efficiency for order fulfillment and achieved more accurate results with this high-tech system.

5. Tracking Issues With Recalled Products

Recalled products can cause injuries and make people lose trust in brands. Fortunately, IoT technology can reduce the impact recalled products have on customers and retailers.

More specifically, IoT sensors make it possible to track individual shipments of items rather than pulling a much larger quantity of items that mostly don’t contain the known defects.

Then, it’s possible to determine things like which supplier provided faulty parts while fulfilling orders or to find out if the damage happened during shipping.

For example, perhaps a batch of perishable consumables sat in excessively warm temperatures for too long and spoiled but still made it to consumers. Knowledge of that information could restrict the reach of a recall and help retailers act promptly.

6. Making Stores Smarter

Retailers succeed when they can meet customers’ needs. IoT technology is helping entities do that in various ways. Some smart shelves transmit information about stock levels and can recognize specific characteristics of customers to deliver personalized advertising.

IoT systems can also detect which areas of a store have higher-than-average traffic levels. And those patterns can then be used to stock inventories predictively.

IoT Tech Helps Retailers Adapt to Modern Needs

Customers are no longer willing to wait weeks or even days to get their orders. They don’t tolerate empty shelves, either.

Technology associated with IoT avoids those situations and enables retailers to better meet inventory and supply chain expectations, too.