Undercover Analyst – Forrester goes on the receiving end of the holiday online shopping season
In the first season of the hugely popular CBS Undercover Boss series, GSI Commerce founder and CEO Michael Rubin went undercover for a week in one of his firm’s eCommerce distribution centers to find out what it was really like to work on the front lines. Last week, Sucharita Mulpuru and I were invited by eBay Enterprise to follow in Michael's footsteps and go work the floor in one of eBay Enterprise’s (formerly GSI Commerce) largest eCommerce distribution centers at the peak of the holiday shopping season. Now luckily we didn’t have to wear any stick on facial hair as we weren’t actually undercover, but we did put in a grueling four hour shift: picking, sorting and packing online orders (yes they made us work).
The experience was fascinating, humbling and a reminder that you can have the best eCommerce website in the world, but it means nothing on Cyber Monday unless you can get those orders out to your customers in time. So what did we observe from our brief career change?
- Everything was surprisingly orderly for early December. We visited on the 10th of December – one of the busiest fulfillment days of the year – yet all 500 staff in the warehouse were calmly going about their jobs, composed and seemingly taking the workload of picking and packing approximately 70,000 orders a day in stride. Given that 30% of the total US online spend in 2014 (some $89 billion dollars) will occur in November and December, the warehouse floor was not the frenzied scene of chaos we had been expecting.
- Retailers have vastly differing fulfillment requirements. eBay Enterprise operate fulfillment operations for approximately 100 brands across its 12 fulfillment campuses. It was fascinating to see how orders for one major teen apparel chain were packed in mere seconds in a highly automated environment, while the packing process for another lifestyle accessories and fashion brand took up to eight minutes per order. The attention to detail that went into the packing of the boxes was interesting, from perfectly measuring the tissue paper lining, to the last seal of the branded label on the box. First impressions count.
- Automation is vital, but we humans still have an important role to play. eBay Enterprise operates a highly automated warehouse environment, with miles of conveyors, thousands of barcode scanners, electromagnetic tilting conveyors and some very clever software keeping it all ticking along. The results are impressive. The facility can pick and pack more than 350,000 units a day, with near 100% accuracy without even breaking a sweat. Yet humans still play a vital role – during our day we had the opportunity to work alongside and chat with many different employees and were surprised to find that many of them are long term employees each with specific skillsets honed to augment and support the facilities automation.
- Americans stuff an awful lot in their shopping carts when the sales hit. Some of the orders we sorted had 19 line items. Other customers orders had 5 pairs of the same jeans. It was clear that when the sales hit, online shoppers go big and are maximizing their online spend to qualify for free shipping thresholds and bulk order discounts, although some of these "same product, different size" apparel orders will inevitably be returned after the holidays.
- Sorting and packing is (very) hard work. After just four hours on the floor, we were beat physically and mentally. It’s a fast paced environment with a huge amount of repetition and high expectations – the staff take very seriously and take great pride in the UPH (units per hour) KPI’s. The best of the best are capable of picking an item from a bin, scanning it and putting it on a high speed conveyor at a rate of 1,200 items an hour (that’s one every 3.6 seconds). Wow – Sucharita and I could not even come close. Furthermore the staff in the facility work 13 hour shifts – they are truly the hidden heroes of the eCommerce industry.
I strongly encourage all eBusiness executives to spend a day working on the floor of your distribution center if you have never done this before. In an intensely competitive environment with Amazon, increasingly the efficiency and flexibility of your fulfillment operations will either become a competitive advantage or burden. There is no better way to understand this than to go out on the front lines.