95% of the orders at Hallmark Business Connections are processed online, CEO Tressa Angell says.
The fulfillment system also enabled the department store chain to reduce its warehouse staff.
Facing a shortage of warehouse space, Von Maur Inc. last fall installed a robotic fulfillment system from Kiva Systems Inc. Now the multichannel retailer, which operates an e-commerce site and 25 department stores in the Midwest, is starting to see early returns on that investment, says Melody Westendorf, Von Maur’s chief operating officer.
One of the most significant gains is the retailer needing fewer workers in its Davenport, IA distribution center. During the busy holiday shopping season, the retailer normally would have up to 35 employees navigating the warehouse’s aisles and going up and down ladders, she says. Now during busy seasons the retailer only needs one or two employees in the warehouse.
When customers on VonMaur.com, their orders are forwarded from the site’s shopping cart to the retailer’s warehouse management system, which integrates with software that operates the robots. The Kiva Systems robots, which look like brightly colored boxes on wheels, lift and move inventory pods containing ordered items to workers at packing stations.
The system enables the human warehouse employees to remain stationary, with the robots and pods coming to them for picking and scanning. The retailer’s inventory storage process has also become simpler and more efficient, says Westendorf, because the system can keep track of where items are at any given time. That means warehouse personnel don’t need to put all the same products in the same location, a requirement that eats up worker time and may not represent the best use of limited space.
“A type of product can be in 15 different units around the warehouse, but the system knows where it’s sitting, so you don’t have to worry about moving products around on shelves,” she says. “That is such a colossal waste of manpower and time.”
Time has taken on growing importance as the retailer’s e-commerce operations mature, she adds. “Customers have become increasingly more demanding,” she says. “They want their orders within a couple of days.” She says the Kiva system enables Von Maur to fulfill orders the same day they are received; often, e-commerce orders can be fulfilled within an hour. Previously, she says, orders could take three or four days to fulfill during the holiday shopping season.
Westendorf would not reveal how much Von Maur spent on the Kiva system except to say “it’s not cheap.” She expects the retailer will realize its full return on investment within two or three years.