Hudson’s Bay’s Robotic DC is Fulfilling Orders at Breakneck Speed

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Hudson’s Bay’s Robotic DC is Fulfilling Orders at Breakneck Speed

By Nicole Gillo - 12/12/2016
In order to drive long-term profitable growth, Hudson’s Bay Company is navigating the challenging market and executing on its all-channel strategy, including improvements to stores and online to better service customers and create excitement. In Q3 2016 the strategy began to bear fruit, with total sales increased by a whopping 28%, driven by the addition of HBC Europe.
 
“To support our strategy, we are not only investing in consumer-facing channels, but also supply chain initiatives,” said Hudson’s Bay governor and executive chairman, Richard Baker on a recent earnings call with analysts. “We completed the installation of our world-class robotic fulfillment center in Toronto and are already leveraging it to fill Hudson's Bay’s online orders. We believe that there is significant opportunity to grow digital sales in Canada and this technology will help us establish the platform we need to support that growth in a profitable manner.”
 
For the holiday season, the retailer has also introduced a new gift concierge service in its Saks locations, which will offer dedicated concierges to assist customers with all of their gift-giving needs. Additionally, Saks OFF 5TH introduced a revised pricing strategy, which was fully implemented by the end of Q3 last year. This revised strategy substantially reduced promotional activity and focused on offering great value on an everyday basis. The revised pricing strategy is expected to drive increased margin by offering customers a clearer value proposition.
 
With the arrival of the holiday season, the company was pleased with its Black Friday performance across all banners, “Notably, digital sales growth has been especially strong,” commented CEO Gerald Storch. “All of our associates are working tirelessly to execute the initiatives and we are both focused on, and excited about the rest of the holiday season.”
 
To further support the growth of its digital business, HBC is continually improving its fulfillment capabilities and took a giant leap forward with a launch of new robotic technology at its distribution center in Toronto. This technology can fulfill orders 12 to 15 times faster than the previous manual process, and allows for better use of the vertical space in distribution centers.
 
“We expect to rollout similar technology in our U.S. distribution center in Pottsville, Pennsylvania during 2017 which would serve both the Lord & Taylor and Saks OFF 5TH online businesses,” continued Storch. “This improved technology will help us increase the speed of our order fulfillment, optimize utilization of space in our distribution centers and reduce expenses associated with our rapidly growing digital sales which as we mentioned grew by 12.9% in our legacy businesses during the third quarter.”
 
As always the retailer is aggressive in exploring other ways to reduce costs and increase efficiencies. “While we’ve made considerable progress in this area over the last year, we continue to look for areas in which we can improve efficiencies and reduce our cost structure,” added Storch.
 
“Despite the challenges we are seeing in the retail apparel environment we remain focused on executing our long-term strategy for profitable growth and are taking steps to ensure that HBC is in a position to capitalize on the many opportunities that we have,” concluded Baker.