This Month in Modern: Watching the e-tail revolution

Chances are good that you’re paging through this issue of Modern Materials Handling while walking the floor at ProMat 2013 in Chicago—especially if you’re a retailer.

Over the last year we’ve been closely examining the evolution of e-commerce and the new order fulfillment challenges facing the retailing industry overall.

Over the next three months, executive editor Bob Trebilcock will continue this coverage by looking at three retailers that are redefining their categories and their operations by applying highly automated distribution systems to meet the needs of a demanding, ever-fickle online consumer.

This month we get the chance to peek inside the operations of the Gilt Groupe, a member-based e-tailer that has built its business model on the foundation of lightning-fast fulfillment—a capability they’re now perfecting in their new 303,000-square-foot facility in Shepherdsville, Ky.

Gilt’s more than 7 million members monitor its Web site for “flash sales,” or the opportunity to buy designer and luxury goods at insider prices for a limited time. For example, at press time Gilt members were offered sales on beaded bracelets, scarves by Yarnz, and shoes by Ash.

Flash sales last 36 hours and the quantity of the items is limited, so there’s a sense of urgency for the fashion conscious consumer. New sales start every day at noon ET, and the company claims that up to 70% of the merchandise will be ordered and shipped within 24 hours.

“Orders that go through our mobile robotic picking area are on a truck within 30 minutes,” Chris Halkyard, Gilt’s chief supply chain officer tells Trebilock this month. “It is possible to have an item picked from one of the other areas and on an outbound parcel carrier in as little as 4 minutes.”

As Trebilcock shares in this month’s System Report (page 16), Gilt’s Shepherdsville facility is now considered a strategic asset. In fact, it’s a clear example of the trend of order fulfillment becoming a competitive weapon in an increasingly crowed retailer arena.

“Like the Gilt story, we’re going to see more and more retailers apply creative business models to innovative fulfillment operations to break through the noise and capture market share,” says Trebilcock. “We’re really seeing a distribution revolution happening in front of our eyes.”

And as more than 30,000 materials handling professionals descend on Chicago this month for ProMat, you can rest assured that the conversations taking place between leading retailers and systems providers will only stoke those revolutionary fires.