Hudson's Bay set to extend robotic fulfillment system to US
Hudson’s Bay Company is planning to expand its use of robotic fulfillment technology to its Pottsville, PA distribution center in 2017, a move aimed at accelerating and improving fulfillment processes for its Lord & Taylor and Saks Off 5th retail units.
The rollout was discussed this by Hudson’s Bay CEO Gerald Storch on the company’s third quarter earnings call, and comes after an earlier, limited pilot of the technology at the company’s Canadian distribution center near Toronto.
In addition to speeding up fulfillment, Storch said the new system would help Hudson’s Bay
“optimize utilization of space in our distribution centers and reduce expenses associated with our rapidly growing digital sales," according to Seeking Alpha's transcript.
The big winners here are customers of Lord & Taylor and Saks Off 5th, who eventually should see improved fulfillment experiences as HBC gets the robotic fulfillment system (otherwise known as the Perfect Pick case shuttle system) up and running. HBC also recently revised its pricing strategy for Saks Off 5th to drive sales, so making fulfillment faster and more efficient next year could prove to be excellent timing for those stores in particular.
Storch mentioned fast-growing digital sales, and that may be putting it mildly, with e-commerce sales across all of HBC’s business up 73% for the third quarter. That provides ample reason to invest in e-commerce fulfillment efficiencies.
Yet robotic fulfillment also will lead to lower costs associated with those sales, and with distribution center space. That could be particularly important to HBC, too, as it’s ultimately another brick-and-mortar retail company with many brands to feed and flagging in-store sales, but explosive e-commerce activity.
When it comes to using robotic systems in fulfillment phases, Amazon is still the leader, having moved way earlier and way more aggressively than anyone else. By comparison, HBC and some others are moving very cautiously and deliberately. We don't know if there is really a robotics arms race on, as some have suggested, because each retailer deploying robotics really needs to move at their own pace. But as more retailers begin to take steps in this direction, the have-nots are going to have to look in the mirror and ask "Why not?"