To keep up with vertically integrated competitors in the DTC space, established brands from Walmart to Kroger are re-evaluating supply chain technology and implementing automation to cut costs and better use employee time

Shoppers live in an on-demand economy with outsized expectations for convenience, attention and immediacy. Delivering on these desires alone is challenging for companies, but to do so in a cost-effective manner is even more so. The vertically integrated infrastructure of many direct-to-consume brands has inspired other retailers across categories to innovate in supply chain and automation technology.

The addition of automation brings two-fold efficiencies to businesses by outsourcing repetitive and time-consuming tasks, while freeing up staff to provide the much needed human touch to interactions with shoppers.

Discount retailer Walmart expanded its use of autonomous robots to manage its inventory, introducing them in 50 Walmart locations. It has introduced Bossa Nova-made robots that can detect out-of-stocks items and help store associates and shoppers locate products. Automating these tasks has freed up store associates to focus on the higher level customer service aspects of their jobs. Walmart also introduced robots that can scrub the floors and plans to add automatic conveyor belts to its back rooms to automatically sort products and reduce the amount of labor needed to unload shipments of new inventory.

Gap Inc.
Apparel retailer Gap Inc. installed automated storage and retrieval systems in several of its distribution facilities in order to keep up with consumer demand for fast, low-cost shipping, while keeping costs down. The system has the capacity to store over 490,000 cases of merchandise, which supports precision, accuracy and quick retrieval, allowing teams to process customer orders with greater efficiency and accuracy.

Kroger x Ocado
American grocery chain Kroger is partnering with British online supermarket Ocado to implement their automated warehouses and order fulfillment system in the US. The Ocado Smart Platform is a hardware, software, logistics, robotics and AI system that automates the picking and packing of individual grocery orders in massive warehouses. The partnership will bring the platform to the US for the first time.

Hema grocery stores double as distribution centers, where assigned employees find items from online orders and pass them on to the delivery center. The initiative by Chinese retailer Alibaba’s chain of brick-and-mortar supermarkets allows customers living within a three-kilometer radius to receive their groceries within 30 minutes.

These are just a few examples of brands using automation to own the supply chain segment of the retail lifecycle. For more information and inspiration, read PSFK's flagship report Future of Retail 2019.