How Automation Can Unlock Greater Agility for Retail Peak Season 2024

From October to December, peak retail traffic creates transitory headaches for warehousing and logistics managers — and those headaches are getting peskier by the year. In 2023, shoppers spent 3.8 percent more than during the previous peak season. Meanwhile, peak-era spending has increased by 63 percent in the past decade, aided by the rising trend toward e-commerce.

When order volumes skyrocket and labor crunches intensify, assessing your operations’ inefficiencies can be challenging. Yet it’s critical to proactively identify areas for improvement in warehouse operations. Doing so is the key to meeting (and exceeding) consumers’ rising expectations during the next calendar year.

Now is the opportune moment for leaders to examine how modern technologies like automation and robotics can help bridge fulfillment gaps and bolster productivity. By answering difficult questions now, organizations pave a path toward success during 2024’s busiest months.

The Challenges (and Opportunities) of Rising E-Commerce

Holiday spending is surging. But these changes aren’t occurring in a vacuum; total year-over-year retail spending is also up, thanks to the relentless rise of e-commerce activities. Global retail sales are forecasted to exceed $31 trillion next year, and experts predict that yearly e-commerce sales will eclipse $8 billion by 2027.

In response to increasing e-commerce sales, warehouse operations must practice heightened agility in order fulfillment and returns processing. Modern consumers have developed high expectations, desiring fast and free delivery and fast and free returns. These expectations can be difficult to meet year-round, especially during peak season, when warehouses are often understaffed.

Most warehouses maintain a seasonal or rotating labor force to cope with fluctuating demand. However, the logistics industry continues to grapple with a prolonged labor shortage, which is testing this strategy. Industry research indicates that manufacturers will need to fill 4 million new jobs by 2030 to keep pace with consumer demand — but that doesn’t eliminate the challenge of employee reliability.

Rising e-commerce sales present an excellent opportunity for retailers to improve customer loyalty and drive digital revenue. However, without the right toolkit or resources, retailers risk missing critical goals such as orders picked per hour and shipping windows. Innovative solutions are critical to hitting these benchmarks.

The Promise of Robotics Automation in Warehousing

Artificial intelligence-powered robotics automation is revolutionizing how warehouses meet e-commerce needs. Warehouse robots are capable of handling inventory, processing orders and fulfilling shipments at rates parallel to human productivity — higher, even, considering their ability to operate seamlessly day and night. Increased throughput is a significant benefit during peak season when speed and efficiency are paramount.

Advances in 3D sensor technology and AI have led to a new generation of increasingly intelligent and autonomous robots that can perform complex tasks with minimal human intervention. However, automation isn't without its pitfalls. Acknowledging and preparing for exceptions is crucial to maintaining peak rates and ensuring customer satisfaction.

Robotics models are most beneficial with a human-in-the-loop approach. In this model, remote and third-party practitioners can support remediating intervention to maintain throughput. When an unknown circumstance occurs — e.g., a box ripping in transit or a pallet appearing in an unexpected area — this remote crew chief can provide environmental context to the robot, enabling it to quickly address novel situations in the most productive manner possible. Robots can usually address unexpected situations using AI, however, when situations perplex the robot, human-in-the-loop models allow warehouses to continue operating without interruptions.

The promise of warehouse robotics is immense, with many logistics experts already adopting AI solutions to address their modern challenges. For example, UPS is investing heavily in warehouse automation, with plans to triple its network of automated facilities this year. In doing so, the company will increase productivity and reduce its volume-per-resource ratio — a metric calculated by dividing daily throughput by a facility’s number of employees.

It’s time for retailers to look beyond surviving peak season. By adopting AI-powered technologies and robots on the warehouse floor, retailers can ensure they meet fluctuating demand and unlock a competitive advantage 24/7, 365 days a year.

Crystal Parrott is COO of Plus One Robotics, a company that offers reliable robotic and automated material handling solutions powered by software that offers unparalleled human-robot collaboration.