Large retailers with multiple brands and websites often struggle with achieving economies of scale when it comes to logistics operations and order fulfillment, especially as they navigate the complexities of using omni-channel shopping experiences for fast ordering and delivery.
Established in 2014, SSG.com is an online shopping brand owned by the Shinsegae Group, one of the largest retail brands in South Korea, achieving revenues of over 1.29 trillion (approx. US $1 billion) in 2020. Historically, each of the Shinsegae retail brands had their own web presence. To deliver greater synergy for its customers, Shinsegae integrated its various brands into a single online e-commerce site called SSG.com. Through this online platform, customers order products from Shinsegae affiliates (including the Shinsegae Department Store, E-Mart, Traders, Casamia, CHICOR, and the Shinsegae online mall).
In 2019, Shinsegae integrated its discount store chain, E-Mart, into its SSG.com site. Through its presence on SSG.com, E-Mart provides customers access to fresh and processed food as well as 111,000 different non-food items. E-Mart provides both delivery as well as in-store pickup options from its physical store locations.
To provide a seamless shopping experience for customers, SSG.com provides an omni-channel experience where customers can order from the online mall and choose their method of fulfillment: delivery or in-store pickup. SSG.com fulfills their customer orders from either one of three regional distribution centers, or through its network of E-Mart and Traders stores.
Global Pandemic Contributes to Explosive Growth in Online Shopping Over the last 2 years, the global pandemic has exponentially shifted customers’ buying preferences towards an online model, which has strained the SSG.com logistics operations teams. In addition to the need to scale operations, today’s digital consumers are more demanding and want fast delivery.
Consolidating Order Fulfillment Meant Modernizing Barcode Scanning Technology SSG.com required improvements in their logistics service to meet customer needs. To do this, SSG.com needed to invest in technology that would read barcodes more quickly and accurately under high-speed conditions and position them for growth. Achieving higher read rates would help reduce the cost and time associated with manual rework needed to fix the labels that couldn’t be read as well as streamline delivery tasks.
Cognex Helps SSG’s Micro-Fulfillment Centers Achieve Higher Read Rates and Reduce Labor Costs SSG.com’s logistics team understood the benefits of Cognex DataMan image-based barcode technology and identified an opportunity to use Cognex technology to increase logistics efficiency and improve local order fulfillment processes in facilities that served several major metropolitan areas. Cognex logistics tunnels with fixed-mount DataMan barcode readers were implemented in micro-fulfillment centers located in Incheon, Pyeongtaek, and Manchon. Across the board, SSG.com saw a dramatic improvement in their local delivery and logistics processes by using Cognex logistics solutions and automating barcode scanning processes. Specifically, they:
- Achieved real-time read rates of 99% under normal recognition conditions
- Enabled fast reading of multiple codes on high-speed lines
- Decreased labor costs compared to how the same volume of orders was previously processed
- Reduced costs of operations due to less manual rework required▪ Decreased worker fatigue and improved quality of work