Chewy CFO Seeks Labor Cost Savings via Automated Fulfillment
Chewy will reportedly open at least two automated fulfillment centers as it tries to curb rising labor costs.
Speaking to The Wall Street Journal (WSJ) Tuesday (Jan. 3), Chief Financial Officer Mario Marte said the move will reduce the time workers spend tracking down and packaging products for the online pet supply retailer.
“When we think about the future of our fulfillment network, automation is at the center of that,” Marte said, per the report. “It lowers the cost, it improves safety, it increases capacity.”
Chewy already has three of these centers, one in Pennsylvania, one in Montana, and one in Nevada. Over the next 15 months, Marte said in the report, the company will open at least two more locations, which employ automated storage, retrieval and sorting systems.
In some cases, Chewy has completely eliminated manual box-packing, something workers had handled in the past, Marte told WSJ.
As PYMNTS reported last month, automated fulfillment represents “a compelling next-step evolution for retailers,” or at least for larger retailers.
Last month, Amazon launched Sparrow, which the company refers to as “an intelligent robotic system that streamlines the fulfillment process.”
That announcement followed October’s news that Walmart had purchased Alert Innovation, a robotics automation company that “develops material-handling technology for automating order fulfillment in retail supply chains.”
The ongoing technological battle between the two mammoth retailers is transforming their industry “by innovating — and automating — more touchpoints along the customer journey.”
Meanwhile, PYMNTS’ conversations with CFOs in 2022 showed a strong emphasis on automation in all its forms. This came from a boom in opportunities for automated tools to help companies fuel sustainable growth while reducing human error and manual labor redundancy.
This trend has extended into the quick-service restaurant (QSR) industry as well, where brands like McDonald’s and Starbucks are embracing automation to reduce labor costs.
“There are two enablers to automation,” John Culver, Starbucks group president of North America and chief operating officer, said in an Investor Day presentation. “First is how are we going to reimagine our supply chain for the future. And second, how are we going to make the right investments in technology to make that work easier.”
He said that digital ordering technologies, automated inventory management systems and smarter analytics have made a major impact, adding that the coffee seller is testing an “automated counting and receiving” system on the supply chain side.
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