Ready for the Avalanche of Pet Subscription Boxes?

Retailers and 3PL providers are looking for ways to optimize kitting, packaging, and shipping as demand grows for customized monthly pet subscription boxes. ©irissca – stock.adobe.com.

Robots are essential for optimized kitting.

By Gemma Ross, VP of operations at OSARO

You know B2B and B2C; now it’s time to meet B2H. That’s business-to-human, a concept that’s been around for several years but took off during the pandemic when retailers began dealing almost exclusively with consumers online. Because of the lack of helpful storefront intermediaries, retailers had to rethink their digital customer experience, which consisted mainly of chatbots and search filters.

Relationship-building is key to consumer loyalty, which means developing trust, personalizing the customer’s experience, and creating fun or meaningful B2H interactions that create long-term engagement. Enter the merchandising concept of subscription products.

The pet box subscription economy

Subscription products are an emerging concept in merchandising — a new take on what wine clubs and Harry & David pioneered decades ago. Lately, this subscription model has been gaining momentum in the pet sector because pet subscription boxes provide a unique method for people to spoil and delight their cherished pets. The boxes are meticulously curated to accommodate a pet’s tastes and needs, offering pet owners a selection of high-quality products, including toys, snacks, collars, and more.

In 2022, the global pet subscription box market was valued at approximately $690 million, and it is expected to grow at a compound annual growth rate (CAGR) of 13.5% between 2023 and 2032 according to a report by market.us. For fulfillment operators such as third-party logistics providers (3PLs), this means an incoming avalanche of repeated and constantly changing orders. And, with subscription box contents usually changing monthly, retailers are looking for ways to optimize kitting, packaging, and shipping.

While today’s fulfillment warehouses hum with mobile robots, automated storage retrieval systems, and depalletizing robots, kitting is typically handled by humans who carefully select and package different items from multiple sources into a single box. Indeed, kitting requires precise picking and placing at speed — and adept management of changing stock keeping units (SKUs).

But people are scarce. And they can’t always work graveyard shifts on short notice during unpredictable surges in business.

Robots are essential for optimized kitting

Pet subscription boxes are complicated. For example, BarkBox offers kits for small, medium, and large dogs. Also, you can specify food preferences: beef, chicken, and turkey. And there are configurations available by age, from puppies to senior dogs. This means there are many potential monthly changeovers.

Kitting for these boxes requires decision-making, agility, and adaptability that, until recently, only warehouse workers could accomplish — at a time when there is a persistent shortage of workers interested in picking and kitting tasks. But the latest generation of advanced robots are more intelligent, can deftly handle the changing SKUs packed into subscription boxes, and can learn new tasks.

Smart robots learn and adapt on the fly

Equipped with camera systems, lights, and sensors, and powered by AI-driven software, kitting robots can see, scan, pick, manipulate and place different products into a curated box — and continuously ‘learn on the job’ through machine-learning algorithms.

A core attribute of subscription boxes is that they continually change. Today’s smart robots can quickly learn how to identify, pick, and place new kit configurations and SKUs with minimal human intervention, thereby maximizing throughput while minimizing changeover time.

Currently mobile robots deliver product bins to human warehouse workers, who then pick, sort, assemble or package items before they are sent for more processing downstream. All these jobs are repetitive and even dangerous. Not surprisingly, warehouses experience high staff turnover, time-consuming new-employee training, and a persistent shortage of workers. Robots, meanwhile, can ramp up on short notice for long hours.

Deploying smart kitting robots may seem like a major financial investment. However, robot-as-a-service (RaaS) contracts shift costs by replacing costly capital expenditures with a manageable annual operating budget. Depending on the situation, smart piece-picking robot systems cost the same or less, annually, than a human worker when purchased through a RaaS contract.

Robotic kitting in six steps

1. Kit creation. The retailer determines the items to be included in the box and how many are to be produced.
2. Planning and setup. The robot line is configured and optimized for the items to be picked and how they will be arranged in the box. In most kitting scenarios, robots work side-by-side, with each robot picking from a separate bin and placing a new item into the same box as the box moves along a conveyor.
3. Picking. As products are presented, the picking robot assesses the item’s shape and determines how to pick it through a system of sensors, cameras, and AI-driven software.
4. Tool change. In some cases, depending on the setup, the robot may utilize different gripper tools, such as different size suction-cup end effectors or finger-like grabbers, to pick up different-shaped and textured items. These may be installed manually, or in some cases the robot may dynamically select the best tool.
5. Scanning. If required, the robot may scan the item for record keeping before placing it in the box.
6. Movement downstream. As items from each bin are picked and placed into boxes, they are moved along a conveyor for the next item to be placed, and then proceed downstream for labeling and shipping.

Plan today: kitting demand is growing

With the pet subscription box segment set to expand, 3PLs, integrators, and retailers with fulfillment operations will need to evaluate various smart robots to handle the expected increasing demand for curated kits, especially in the face of a sustained labor squeeze and retail price competition. That means liaising with your floor operations managers about current layouts and then making a powerful RaaS-based business case to your C-suite for robots in a kitting line.

About the Author

Gemma Ross is VP of operations at OSARO, a startup in San Francisco that designs and delivers AI-driven robotics solutions for e-commerce automation. Ross oversees solution delivery and the ongoing success of OSARO’s e-commerce and 3PL customers in the warehouse, logistics, and fulfillment sectors. Her experience includes roles at Kindred and DreamWorks Animation. Ross is a graduate of Dartmouth College with a degree in Computer Science. Contact Gemma Ross on LinkedIn.