Retailers Turn to Inventory Tech and Robotics to Ease Pain of Limited Warehouse Space

In retail, speed is a strategic advantage.

So is having the right inventory on hand at the right time.

Much, of course, depends on having the right goods physically present, lining the shelves within the warehouses and ready to line the (virtual and brick and mortar) shelves to entice customers.

Consumers, of course, have a range of choices online, and when clicking the buy button – if a merchant does not have what the customer wants or cannot get it to them in the desired timeframe, it’s a simple matter of moving right on to the next website.

In the midst of the current inventory glut and an uncertain macro environment, there’s decidedly less space to go around. As noted by PYMNTS on Wednesday (Oct. 6), larger companies have been snapping up storage space, which in turn means that there’s less space for the smaller players. The simple economics of scarcity value means that the space that is available winds up being more expensive and squeezes margins.

A Few Levers to Pull

There are a few levers to pull beyond simply ponying up more money to chase less space. Juggernauts like Amazon, for example, are able through the platform approach to broaden their seller-facing initiatives to offer fulfillment services that take inventory on board and ship it out. By having what is arguably the first/early mover advantage (Amazon, of course, has more than 374 million square feet of inventory space on hand), offering a lifeline to smaller sellers that include storing and shipping goods can prove invaluable (and sticky for the platform, too).

The pressures are not limited to SMBs, to be sure, and are giving rise to innovations and a do-it-yourself approach that can improve inventory management and margins. In one case, as noted in this space, Macy’s has used credit card data and other analytics to get out in front of looming inventory pressures, having cut orders as consumers shifted their spending to verticals other than clothing and home goods.

Read Also: Macy’s Outmaneuvers Bigger Rivals on Inventory Control

Elsewhere, companies such as Target have looked to fill the bulk of orders in-store — Target does so for 96% of its sales — and thus have more efficient use of its existing physical footprint. Advanced technologies, including robots, are increasingly being added to the mix.

Walmart said just today (Oct. 6) that it will acquire Alert Innovation, a robotics automation company that develops automated technology for Walmart’s market fulfillment centers using bot technology to help store, retrieve and dispense orders. Earlier this year, Walmart said it would be extending its partnership with automation technology company Symbotic. Walmart will use Symbotic’s robotics and artificial intelligence (AI) software to all 42 of the retailer’s regional distribution centers.

As the old saying goes of real estate — and by extension, warehouse space — the supply isn’t infinite. So it will be up to the retailers, large and small, to make better use of the inventory management tools they have on hand.

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