Q&A: Boxed co-founder talks warehouse efficiency—via robotic automation
Boxed is testing a new initiative to drive warehouse efficiency using automated driverless carts.
The e-retailer — which sells everyday essentials in bulk form at a discount — operates warehouses in Union (New Jersey), Dallas, Las Vegas, and Atlanta. Warehouse associates fulfill and ship orders that arrive on customers’ doorsteps within two days or less. However, the Union facility is the company’s only fully automated distribution center. Boxed’s other three warehouses support predominantly manual, time-consuming operations.
In a move to automate its picking and packing operations at the manual centers, Boxed has developed — and is testing — an autonomous guided vehicle (AGV) that is able to pick up and transport orders through its facilities. And early indications are that effort is paying off with efficiency gains and improved picking rates.
Boxed’s co-founder and CTO William Fong shared his thoughts about the initiative — and expectations — with Chain Store Age.
CSA: What is Boxed’s interest in robotics?
WF: Union is our one fully automated distribution center, outfitted with a state-of-the-art conveyor system. We want to try to replicate this efficiency at our three manual locations.
Our goal is to reduce costs by 10% and replicate efficiency within 80%. Rather than deploy miles of conveyors, this next iteration of efficiency will stem from robotics-based carts. However, the technology will solve the same issue: getting merchandise to our pickers versus making them walk to the merchandise.
CSA: What was the project’s inspiration?
WF: We are always thinking about how to make internal operations more efficient. Focusing on a solution that could streamline operations across our manual fulfillment centers was a natural extension of this goal.
That’s how we created what we call AGVs — automated guided vehicles. Leveraging our entrepreneurial spirit, the devices leverage software we developed using open source technology, and our robotics team created the hardware.
The AGV features an iPad, and comes to life with a Tesla battery that has between 15-20 hours of run time. Embedded sensors and a camera give it awareness of its surroundings and controls its movement around the warehouse.
CSA: How do they work?
WF: The AGV is programmed with artificial intelligence. It can recognize routes, paths and product labels, and understand physical obstacles. They are programmed to autonomously travel throughout the distribution center, navigate through other humans and carts, and pull over to pick up orders.
Once a customer order is accepted by our e-commerce platform, it is dispatched to our fulfillment software. The software is integrated within the robot and mapping software optimizes the best route for the unit to compile all of the ordered merchandise, and directs the AGV to move forward, backwards or perpendicularly.
Embedded sensors direct the devices to the correct pick zones, and QR code readers identify which pallets to stop at. The sensors also prompt the cart to stop roaming when it encounters a physical obstacle.
Each time the AGV makes a stop on the picking route, an associate in the aisle picks all the requested merchandise. They use the iPad to confirm the merchandise was picked, and the filled cart travels to the pack station where another associate boxes the order and places it on a truck for delivery.
CSA: How long does the picking process take?
WF: It depends on the order — and whether they are fulfilling more than one order. However, the AGV prototype is currently performing at a rate that we estimate has increased productivity by 80%.
CSA: How many AGVs are you currently using?
WF: Currently, we are using one prototype for order simulations in Union. This is helping us prepare to launch our first units in our Dallas warehouse by the end of the year, and we will scale up from there. At full deployment, we expect to be using between 30 and 40 devices in Dallas.
Our goal is to deploy an average of 40 AGVs in each manual distribution center, give or take, depending on the need in each location.
CSA: What is the long term goal?
WF: Our long-term vision is to extend the AGVs to other operations that can minimize walking for our associates. This could include replenishment, transportation of supplies, and working alongside humans to fulfill other roles in the warehouse. Overall, we believe that as the AGVs streamline operations, they will continue to decrease the distance that our associates need to walk.
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Study: Gens Y & Z prefer credit cards over other forms of payments
Following suit of older generations, younger shoppers want to pay for purchases with credit cards.
Specifically, Gen Z (ages 18-24) and Gen Y (ages 25-34) are comfortable using credit to make purchases, and overwhelmingly prefer credit cards to monthly payment options, according to new data from Vyze, a provider of cloud-based financial technology solutions.
A majority of Millennials (80%) and 71% of Gen Z preferred a credit card with 0% interest for six months over a fixed monthly payment plan. Over half (53% of Gen Y, and 55% of Gen Z) will forgo using cash for a credit card that offers 5% cash back.
Gen Z and Gen Y adults are also fairly comfortable with managing a credit card balance. Nearly seven in 10 younger shoppers reported being at least somewhat comfortable carrying a balance on a credit card, and nearly one in 4 are “very comfortable” with the practice.
One important difference between the two generations: Gen Z could benefit from more information and a helping hand. This generation is the least likely to know their credit score (only 42% have a rough idea vs. 73% of Gen Y). They are also more likely to say they don’t have the financial information they need to make a decision about whether to apply for credit online or in the store (47% vs 26% of Gen Z respondents).
According to the study, retailers and lenders have the opportunity to better serve younger shoppers by providing more information on interest rates and promotions, as well making sure credit options are transparent and easy to use. While more than four in 10 Gen Z shoppers characterize retail credit cards as “helpful” or “builds credit,” the remainder find credit equally “complicated” or “misleading.”
While limited by strict regulations around how to present information, companies can make the credit experience less overwhelming. Two suggestions: simplify the experience and add transparency into offers and promotions.
“Despite the hype about Millennials and Gen Z, it turns out there’s not a radical difference between these groups when it comes to credit,” said Doug Filak, chief marketing officer of Vyze.
“Instead, a relatively traditional view emerges across the board and these consumers are right where we’d expect them to be based on age and experience,” he said. “Our advice to retailers is to adjust their programs without overcorrecting based on a mistaken sense that these shoppers are drastically different, for example by simplifying and clarifying credit applications versus moving away from traditional credit entirely.”
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