Holiday 2020: An interview with RILA’s Jessica Dankert
The retail sector was among the hardest hit by the Covid-19 pandemic. Now, retailers are scrambling to salvage the holiday shopping season amid strange and uncertain times.
David Maloney has been a journalist for more than 35 years and is currently the group editorial director for DC Velocity and Supply Chain Quarterly magazines. In this role, he is responsible for the editorial content of both brands of Agile Business Media. Dave joined DC Velocity in April of 2004. Prior to that, he was a senior editor for Modern Materials Handling magazine. Dave also has extensive experience as a broadcast journalist. Before writing for supply chain publications, he was a journalist, television producer and director in Pittsburgh. Dave combines a background of reporting on logistics with his video production experience to bring new opportunities to DC Velocity readers, including web videos highlighting top distribution and logistics facilities, webcasts and other cross-media projects. He continues to live and work in the Pittsburgh area.
This year, we’ll likely see a holiday shopping season like no other before it. And hopefully, we’ll never see one like it again. As we all know by now, the Covid-19 pandemic has upended the retail landscape. A number of major retailers have closed their doors forever, unable to withstand the one-two punch of mandated store closures and the e-tail tsunami. But others, particularly those that had already mastered the e-tail game, have thrived. Meanwhile, many have done an admirable job of changing up their business models in the blink of an eye.
Jessica Dankert has had a front-row seat to the action. She is vice president of supply chain for the Retail Industry Leaders Association (RILA), a trade association of U.S. merchants. It probably goes without saying that these days, Dankert and her colleagues are focused on helping RILA’s member companies navigate the uncharted waters of 2020 and beyond.
Dankert recently spoke to DC Velocity Editorial Director David Maloney about the current state of retail, what retailers expect for this unusual holiday season, and how the in-store experience is likely to change.
Q: Between the mandated store closures and subsequent operating restrictions, the Covid-19 pandemic has seriously disrupted retail operations. How would you describe the current state of the industry?
A: It has been a very interesting past handful of months, but I think retail generally is really quite strong. Most companies have reopened, and we’ve seen sharp spikes in e-commerce sales as homebound consumers shifted to online buying. I think it has been impressive to see how retailers have been able to pivot so quickly and respond to the needs of the consumer in this new era of doing business.
Q: We’ve seen several major retailers file for bankruptcy or shut down altogether. Were those companies that were already struggling or were their problems brought on by the pandemic?
A: I think having mandated closures has not been helpful—and not just for retailers, but also for the restaurant, hospitality, and entertainment sectors. It has been challenging. You see a lot of retailers examining and adjusting their models in order to respond to the new realities and, in many cases, coming back stronger.
Q: Are there common denominators among those companies that will succeed in this environment versus those that are at risk?
A: I think the supply chain is key to the retail organization. Certainly, the companies that designed their supply chains from the outset to be flexible and responsive have done well and survived the first part of the pandemic. But it has been a learning experience.
We’ve seen a lot of examples of supply chains that have really risen to the occasion in order to keep goods moving. We’ve witnessed their ability to pivot and meet entirely new needs, such as offering curbside pickup or ship-from-store service for retailers who weren’t already doing that. The speed at which retailers and their supply chains were able to adapt their operations to the new realities has been very exciting to see.
Q: How critical is information to these efforts? Will this push more retailers to digitize their supply chains?
A: The experience of retailers in the past couple of months has underlined the importance of visibility, which has been underpinned by digitization and a lot of the technologies that help provide that visibility. We need to accelerate that process and really get to a point where it’s enabling the kind of flexible supply chains you need in times of disruption.
Q: Are retailers moving to automated systems, especially if they’re filling fewer store-replenishment orders and more small orders for individual customers?
A: I think automation has definitely been on the table, and we continually talk about it with members. I don’t know that [the surge in e-commerce] has necessarily accelerated the shift. It just changes the conversation a bit and adds more data to that discussion. So much of what retailers do is data-driven—they’re constantly looking at the data to see what trends are taking shape that they’ll need to respond to and plan for. At the end of the day, it’s all about flexibility—the flexibility to respond to a pandemic or another type of disruption or consumer trend. So to the extent that automation can enhance flexibility and an operation’s ability to respond to whatever challenge crops up next, it could be another valuable tool in the retail toolbox.
Q: Are larger retailers faring better than smaller retailers?
A: I don’t think it’s necessarily a question of size. It really depends on the retailer itself and how well it was prepared for disruption—specifically with respect to its ability to make quick changes and quick decisions all in the name of meeting customer needs. It is really more around the organizational culture and whether or not company leaders have set up an organization, and by extension, a supply chain, that’s able to react and respond in times of upheaval.
Q: How key is that supply chain to their success?
A: It is certainly a big driver, but not the only driver. Supply chain is what’s behind the scenes making it happen and is obviously critical to serving the customer. What we’re seeing across many organizations are supply chains that over the past decade or so have grown increasingly important and have adopted a more strategic and customer-facing role. While [retail success] is really much more about the total experience a customer has, a good supply chain is certainly a key ingredient of successful retail, especially in the age of e-commerce.
Q: During the shutdowns, many people tried online grocery shopping for the first time and started ordering items they formerly bought in stores from e-commerce sites. Has this become the new norm, and are brick-and-mortar stores going to have to change their role?
A: That is a huge question that everybody is looking at: How “sticky” are these e-commerce sales trends? How long does this pattern play out? Is this a long-term shift? How much of that business will revert to stores as economies open up?
In many ways, the surge in e-commerce is just an acceleration of a trend that retailers had long been aware of and were planning for. They were already looking at the brick-and-mortar in-person experience and how that and the e-commerce experience can complement each other. What can you do differently with the brick-and-mortar setting to make it more relevant and enrich the customer’s experience? The e-commerce explosion is going to move things along a little bit, but I think retailers have been giving a lot of thought to that topic for some time now.
Q: How are retailers envisioning this holiday season? Do they think it will be a typical shopping season with respect to the time frame?
A: I don’t think anything about 2020 will be typical, including the holiday shopping season. In a traditional year, peak season starts around Thanksgiving, which helps guide all the forecasting, sales, and planning activity that goes into retailers’ preparations. All of those things will be different this year. As for timing, it will depend a lot on the economy and what is done at the federal and state government levels, the impacts there.
While it will definitely be an atypical holiday season, I do think that people are still going to be shopping. People are always going to need to buy things and shop for holiday gifts.
Q: Container shipments and overall import volumes are down. Does that mean retailers are “leaning” their inventories, and will we see shortages in some product categories as a result?
A: Retailers are continually evaluating what they’re doing with their inventory and what makes sense going forward, given the constant shifts in consumers’ purchasing patterns. The answer will be different for different retailers and for different products. I don’t think we’ll necessarily see across-the-board reductions in inventory, but I do think retailers are giving a good deal of thought to where they’re positioning their stock and what that means from a customer standpoint.
Q: Do you see more shipments coming directly from stores this year?
A: Definitely. We are seeing more retailers either launching ship-from-store programs or expanding their existing ship-from-store footprint. Ship-from-store makes a lot of sense in terms of being closer to the customer and being able to be more responsive. It’s essentially another tool in the retailer’s toolbox.
Q: While customers have been somewhat more understanding during the pandemic, they haven’t necessarily lowered their expectations for speedy delivery. Is that going to present a challenge during peak season, and are retailers looking at other delivery modes, such as crowdsourcing, to meet those expectations?
A: Parcel shipping at peak has frequently been a challenge during holiday seasons, so it is something they plan for. And they’re always looking at different delivery methods, whether it’s crowdsourcing, working with third parties, or other nontraditional ways to handle that last mile. You see a lot of new players in the space trying to help retailers solve their delivery challenges and a lot of retailers trying new tactics. I think the result will be a lot of options for the customer, as opposed to a one-size-fits-all solution.
Q: Bottom line, how are retailers looking at the upcoming peak holiday season? It’s going to be very different from anything we’ve ever experienced.
A: Yes, it is going to be a nontraditional, atypical rest of 2020. But based on what I’ve heard from members I’ve spoken with, retailers are very optimistic. Retailers have been buoyed by the experiences they’ve had with customers over the last several months and the success of their efforts to meet customers’ changing needs. The customers have responded to that. I think it has really just underscored the importance of retail in this country.
Q: Is there anything you wish to add?
A: Yes. Everyone, please wear your masks when you shop. It is important to keep retail workers safe. It is important to keep our communities safe. Please wear your masks.
Robots are revolutionizing factories, warehouses, and distribution centers (DCs) around the world, thanks largely to heavy investments in the technology between 2019 and 2021. And although investment has slowed since then, the long-term outlook calls for steady growth over the next four years. According to data from research and consulting firm Interact Analysis, revenues from shipments of industrial robots are forecast to grow nearly 4% per year, on average, between 2024 and 2028 (see Exhibit 1).
EXHIBIT 1: Market forecast for industrial robots - revenuesInteract Analysis
Material handling is among the top applications for all those robots, accounting for one-third of overall robot market revenues in 2023, according to the research. That puts warehouses and DCs on the cutting edge of robotic innovation, with projects that are helping companies reduce costs, optimize labor, and improve productivity throughout their facilities. Here’s a look at two recent projects that demonstrate the kinds of gains companies have achieved by investing in robotic equipment.
FASTER, MORE ACCURATE CYCLE COUNTS
When leaders at MSI Surfaces wanted to get a better handle on their vast inventory of flooring, countertops, tile, and hardscape materials, they turned to warehouse inventory drone provider Corvus Robotics. The seven-year-old company offers a warehouse drone system, called Corvus One, that can be installed and deployed quickly—in what MSI leaders describe as a “plug and play” process. Corvus Robotics’ drones are fully autonomous—they require no external infrastructure, such as beacons or stickers for positioning and navigation, and no human operators. Essentially, all you need is the drone and a landing pad, and you’re in business.
The drones use computer vision and generative AI (artificial intelligence) to “understand” their environment, flying autonomously in both very narrow aisles—passageways as narrow as 50 inches—and in very wide aisles. The Corvus One system relies on obstacle detection to operate safely in warehouses and uses barcode scanning technology to count inventory; the advanced system can read any barcode symbol in any orientation placed anywhere on the front of a carton or pallet.
The system was the perfect answer to the inventory challenges MSI was facing. Its annual physical inventory counts required two to four dedicated warehouse associates, who would manually scan inventory to determine the amount of stock on hand. The process was both time-consuming and error-prone, and often led to inaccuracies. And it created a chain reaction of issues and problems. Fulfillment speed is one example: Lost or misplaced inventory would delay customer deliveries, resulting in dissatisfaction, returns, and unmet expectations. Productivity was also an issue: Workers were often pulled from fulfillment tasks to locate material, slowing overall operations.
MSI Surfaces began using the Corvus One system in 2021, deploying a small number of drones for daily inventory counts at its 300,000-square-foot distribution center (DC) in Orange, California. It quickly scaled up, adding more drones in Orange and expanding the system to three other DCs: in Houston; Savannah, Georgia; and Edison, New Jersey. The company plans to add more drones to the existing sites and expand the system to some of its smaller DCs as well, according to Corvus Robotics spokesperson Andrew Burer.
Those expansion plans are based on solid results: MSI’s inventory accuracy was about 80% prior to the drone implementation, but it quickly jumped to the high 90s—ultimately reaching 99%—after the company initiated the daily drone counts, according to Burer.
“We actually had an incident early on where one of the forklift drivers ran into the landing pad, rendering it inoperable for about a week while the Corvus team fixed it,” Burer recalls. “When we restarted the system, we noticed MSI’s inventory accuracy had dropped down to the 80s. But after flights resumed, accuracy quickly improved back to near perfect.” He adds that such collisions are rare as Corvus mounts landing pads high off the floor to avoid impacts but that accidents can still happen.
Overall, the system has helped speed warehouse operations in two key ways: First, the accuracy improvement means that associates no longer waste time searching for missing material in the warehouse. And second, the associates who used to conduct the physical inventory counts have been reallocated to picking and replenishment—creating a more efficient, and optimized, workforce.
A SAFER, MORE EFFICIENT WAREHOUSE
Robot maker Boston Dynamics is well-known for its Stretch and Spot industrial robots, both of which are at work in warehouses and DCs around the world. Earlier this year, Stretch made its debut in Europe, teaming up with Spot at a fulfillment center run by German retail company Otto Group. The deployment marks the first time Stretch and Spot are being used together—in a partnership designed to improve Otto Group’s warehousing operations by increasing efficiency and making warehouse work safer and more attractive to workers.
The partnership is part of a two-year project in which Boston Dynamics will deploy dozens of its warehouse robots in Otto Group’s European DCs. The first location is a fulfillment site operated by Hermes, the company’s parcel delivery subsidiary, in Haldensleben, Germany—a facility that handles as many as 40,000 cartons of goods on peak days.
At the site, Stretch—which is a mobile case-handling robot—autonomously unloads ocean containers and trailers, using its advanced perception system to pick and place boxes onto a telescoping conveyor inside the container or trailer. Spot—a quadruped robot—helps with predictive maintenance by collecting thermal data and performing acoustic and visual detection tasks throughout the facility to reduce unplanned downtime and energy costs. One of Spot’s jobs is to detect air leaks in the facility’s warehouse automation systems; future duties may include conveyor vibration detection, according to leaders at Otto Group.
Both Stretch and Spot will help the Haldensleben facility run more efficiently, especially during fall peak season when volume increases and work intensifies. The addition of Stretch addresses safety and comfort issues as well: Trailer unloading—a process that entails repeatedly lifting and moving heavy boxes inside a trailer, which can be dark, dirty, cold, and/or hot, depending on the weather—tends to be unappealing to workers. Along with reducing the amount of labor required, automating these tasks will have the added benefit for European facilities of helping them comply with EU (European Union) regulations limiting the amount of time workers can spend in those conditions.
Essentially, the robots are making life easier on the warehouse floor and for the company at large.
“Stretch is going to have a ton of benefits for customers here in the EU,” Andrew Brueckner, of Boston Dynamics, said in a recent case study on the project.
The trucking industry faces a range of challenges these days, particularly when it comes to load planning—a resource-intensive task that often results in suboptimal decisions, unnecessary empty miles, late deliveries, and inefficient asset utilization. What’s more, delays in decision-making due to a lack of real-time insights can hinder operational efficiency, making cost management a constant struggle.
Truckload carrier Paper Transport Inc. (PTI) experienced this firsthand when the company sought to expand its over the-road (OTR), intermodal, and brokerage offerings to include dedicated fleet services for high-volume shippers—adding a layer of complexity to the business. The additional personnel required for such a move would be extremely costly, leading PTI to investigate technology solutions that could help close the gap.
Enter Freight Science and its intelligent decision-recommendation and automation platform.
PTI implemented Freight Science’s artificial intelligence (AI)-driven load planning optimization solution earlier this year, giving the carrier a high-tech advantage as it launched the new service.
“As PTI tried to diversify … we found that we needed a technological solution that would allow us to process [information] faster,” explains Jared Stedl, chief commercial officer for PTI, emphasizing the high volume of outbound shipments and unique freight characteristics of its targeted dedicated-fleet customers.
The Freight Science platform allowed PTI to apply its signature high-quality service to those needs, all while handling the daily challenges of managing drivers and navigating route disruptions.
STREAMLINING PROCESSES
Dedicated fleets face challenges that evolve from day to day and minute to minute, including truck breakdowns, drivers calling in sick, and rescheduled appointment times. PTI needed a tool that allowed for a real-time view of the fleet, ultimately enabling its team to adjust truck and driver allocation to meet those challenges.
The Freight Science solution filled the bill. The platform uses advanced analytics and algorithms to give carriers better visibility into operations while automating the decision-making process. By combining streaming data, a carrier’s transportation management system (TMS), machine learning, and decision science, the solution allows carriers to deploy their fleets more efficiently while accurately forecasting future needs, according to Freight Science.
In PTI’s case, Freight Science’s software integrates with the carrier’s TMS, real-time electronic logging device (ELD) data, and other external data, feeding an AI model that generates an optimized load plan for the planner.
“We’re an integrated data analytics company for trucking companies,” explains Matt Foster, Freight Science’s president and CEO. “We’re talking about AI.”
The benefits of the real-time data are difficult to overstate.
“We’ve been able to execute in the toughest of situations because we’ve got real, live data on how long each event is actually going to take and a system to aid and even automate the decision-making process,” says Chad Borley, PTI’s operations manager. “From what traffic patterns we are battling in the morning and evening with rush hour and things like that, to the impact of additional miles to a route, or even location-specific dwell times, it’s been a huge differentiator for us.”
REALIZING RESULTS
A case in point: the collapse of Baltimore’s Francis Scott Key Bridge in March. PTI was scheduled to go live with a new dedicated account in the area just days after the collapse, which would mean rerouting and the potential for longer transit times. Instead of recalculating based on assumptions or latent data, PTI was able to reroute freight based on real-time information and analytics to give the customer timely updates.
“With the bridge going out, that changed our ability to make as many turns a day as the customer would expect,” Stedl explains. “But one of the things Freight Science could do [was to] quickly [assess] how much of an impact that traffic would have [and] what the turns [would] be based on what’s happening on the ground.
“So we were able to go back to the customer and readjust expectations in a real way that made sense, using data. Now expectations can be reset¾we’re not asking for forgiveness when there’s no reason for it.”
The system’s advanced algorithms make load planning more cost-effective and scalable as well. The platform allows PTI to monitor trucks, trailers, and driver hours in real time, recommending additional loads with remaining driver hours that would otherwise be wasted.
And they’re doing it all with much less. Stedl says tasks that used to require five people and hours of work can now be accomplished by one person in mere minutes, improving productivity and profitability while reducing labor and operational costs.
Terms of the deal were not disclosed, but Aptean said the move will add new capabilities to its warehouse management and supply chain management offerings for manufacturers, wholesalers, distributors, retailers, and 3PLs. Aptean currently provides enterprise resource planning (ERP), transportation management systems (TMS), and product lifecycle management (PLM) platforms.
Founded in 1980 and headquartered in Durham, U.K., Indigo Software provides software designed for mid-market organizations, giving users real-time visibility and management from the initial receipt of stock all the way through to final dispatch of the finished product. That enables organizations to optimize an array of warehouse operations including receiving, storage, picking, packing, and shipping, the firm says.
Specific sectors served by Indigo Software include the food and beverage, fashion and apparel, fast moving consumer goods, automotive, manufacturing, 3PL, chemicals, and wholesale / distribution verticals.
Schneider says its FreightPower platform now offers owner-operators significantly more access to Schneider’s range of freight options. That can help drivers to generate revenue and strengthen their business through: increased access to freight, high drop and hook rates of over 95% of loads, and a trip planning feature that calculates road miles.
“Collaborating with owner-operators is an important component in the success of our business and the reliable service we can provide customers, which is why the network has grown tremendously in the last 25 years,” Schneider Senior Vice President and General Manager of Truckload and Mexico John Bozec said in a release. "We want to invest in tools that support owner-operators in running and growing their businesses. With Schneider FreightPower, they gain access to better load management, increasing their productivity and revenue potential.”
Terms of the acquisition were not disclosed, but Mode Global said it will now assume Jillamy's comprehensive logistics and freight management solutions, while Jillamy's warehousing, packaging and fulfillment services remain unchanged. Under the agreement, Mode Global will gain more than 200 employees and add facilities in Pennsylvania, Arizona, Florida, Texas, Illinois, South Carolina, Maryland, and Ontario to its existing national footprint.
Chalfont, Pennsylvania-based Jillamy calls itself a 3PL provider with expertise in international freight, intermodal, less than truckload (LTL), consolidation, over the road truckload, partials, expedited, and air freight.
"We are excited to welcome the Jillamy freight team into the Mode Global family," Lance Malesh, Mode’s president and CEO, said in a release. "This acquisition represents a significant step forward in our growth strategy and aligns perfectly with Mode's strategic vision to expand our footprint, ensuring we remain at the forefront of the logistics industry. Joining forces with Jillamy enhances our service portfolio and provides our clients with more comprehensive and efficient logistics solutions."