Aussie tech business Cohesio is fitting robotic voice solutions in Kmart fulfilment centres across the nation, in a bid to help meet increasing customer demand for e-commerce.
The technology will allow employees in Kmart distribution centres to listen to order details and instructions, rather than waste time reading picking slips.
According to Cohesio founder and chief executive Nishan Wijemanne, the tech can improve productivity by 30% to 50%.
Founded in 2014, Cohesio is focused on bringing tech solutions into supply chains, and has been working with Kmart for some time, Wijemanne tells SmartCompany. In fact, the Aussie retail giant was its second customer.
Over the past couple of years, Cohesio has started working on tech incorporating voice automation and mobile robots for e-commerce order fulfilment.
Having bootstrapped for five years, the startup was acquired in 2019 by German corporation Körber, although Wijemanne has not disclosed how much the acquisition was worth.
He does say, however, that the group sees annual turnover of some €2.5 billion ($4 billion).
“The aim of starting the business was never really to look for an exit, in all honesty,” Wijemanne says.
“We had a few different suitors approach us over the years,” he admits.
“But Körber made sense, not just from a transaction perspective but also from a cultural and vision perspective,” he adds.
In the latest deal with Kmart, Cohesio technology will “voice enable workflows”, Wijemanne says.
It means any task using a paper and pen or a scanning device can be enabled using speech, without the worker having to look at a screen or enter any data manually, he explains.
The aim is to help workers fulfil orders more quickly, whether they’re shipping orders or organising click-and-collect orders, as the COVID-19 pandemic continues to drive e-commerce sales up.
Even seemingly small changes can have a significant effect on productivity, and an improvement of 30% to 50% is “really quite a large lift”, Wijemanne says.
But, other robotic solutions can increase warehouse logistic efficiency by up to 400%.
“We’re seeing a big influx of interest, particularly around robotics in this space at the moment,” Wijemanne says.
“Bringing that whole AI element to drive benefits throughout this period has been huge.”
“Everyone needs to move”
We all know by now the effect the COVID-19 pandemic has had on e-commerce. All over the world, stay-at-home orders have seen consumers shopping from their sofas, rather than in physical stores, even when those stores remained open.
It means people who may not have used e-commerce before are getting used to the whole idea. And, even once the pandemic passes, that’s behaviour that may well stick.
“Everyone is really expecting it. Everyone needs to move,” Wijemanne says.
Cohesio works with several ‘traditional’ retailers who are re-focusing their efforts on e-commerce, and using tech elements to help them make that transition.
Some are able to fulfil online orders, but don’t have the scale to manage the demand. Others have been fielding requests, but don’t have the networks to deliver.
“Given the market dynamics, heavy investment to put in automation is not feasible, so they look for flexible fulfilment,” he explains.
“That’s where we’re seeing the opportunity.”
And that’s not only true of small businesses, Wijemanne notes.
“If you go online and look at some of the main retailers, their e-commerce engines are probably not where they should be in 2020,” he says.
“A lot of these businesses are looking at really bolstering that to be able to meet market demand … COVID has definitely been a huge instigator.
“Retail will still be around, but people’s appetite for online ordering is always going to keep growing.”
Like in many other sectors, COVID-19 has sped up a trend that was already happening, and there’s a long way to go for the Aussie market to reach maturity.
In Australia, e-commerce accounts for about 10% of retail sales, Wijemanne says. In some overseas markets, it can account for more than 20%.
“There’s a long way to go in terms of maturity, for people understanding the supply chain and logistics, and appreciating what we need to achieve in Australia,” Wijemanne says.
“But I think the technology is really getting there.”
Re-imagining the CBD
If we peep a little further into the future, Wijemanne sees the potential for a considerable shift in the way we think of e-commerce.
Already, some of his clients are moving towards ‘micro fulfilment’, he says, and reducing their reliance on big-box distribution centres in rural areas.
COVID-19 has also driven a mass move to remote work, leaving many CBD offices empty, and some may remain that way permanently.
“Less people are now driving into the CBD. Offices are closed,” Wijemanne notes.
“How about looking at converting some of these car parks that are not being used into fulfilment centres?”
There are also, sadly, a lot of empty stores around.
Wijemanne says traditional retailers should be thinking about what else they could be doing in their bricks-and-mortar stores, beyond simply selling products to consumers who walk in the door.
“There’s so much potential. The market is ripe for disruption,” he says.
A little creativity means they won’t have to be so reliant on distribution facilities, and can successfully take control of their own e-commerce activities, he suggests.
“That changes the dynamic, of not just the real estate element, but what else people can be doing,” Wijemanne says.
“It’s a ripe opportunity for us to take that to the next level.”