Holiday Returns: Warehouse Automation, Flexibility, and Efficiency

Now that the holidays are behind us, it’s just the beginning for one of the most complex challenges in the retail and third-party logistics (3PL) industries — managing the onslaught of holiday returns when people return gifts that didn’t quite hit the mark. As host of our “Warehouse Automation Matters” podcast, I’ve covered the most pressing issues in warehouse automation with leaders in the industry.

Recently, I sat down with Bob Duron, President and COO of nGroup, and Diron Raines, Chief Strategy Officer of nGroup, to discuss how their team is tackling the intricate puzzle of holiday returns with innovation, warehouse automation, and a relentless focus on efficiency.

The Complexity of Holiday Returns

“Volume is the biggest challenge,” Bob Duron shared as we began our conversation. When you consider the flood of goods coming back into warehouses post-holiday, the sheer scale can be staggering. In nGroup’s million-square-foot facility, the team runs a 24/7 operation that handles a variety of return types: return-to-vendor, B2B, salvage, hazardous materials, and more. Add in direct-to-consumer (D2C) orders and the need for sorting, inspection, and testing, and you’ve got a whirlwind of activity that could overwhelm even the best-prepared facilities.

But what makes it even more daunting isn’t just the volume... with nGroup associates, Locus Robots have processed over 30 million returns... it’s the variety and unpredictability. “You’re not just dealing with one type of product or process,” Duron explained. “It’s a dynamic operation that requires constant adaptability.”

This adaptability becomes critical, especially when dealing with peak-season fluctuations. As Diron Raines noted, the product mix is constantly changing, making rigid infrastructure like conveyor systems less ideal. Instead, nGroup relies on warehouse automation tools that prioritize flexibility.

The Role of Warehouse Automation in Returns Management

While a warehouse that uses a conventional fixed automation solution might handle peak and post-peak season by hiring a significant number of temporary associates, nGroup uses warehouse automation to minimize this reliance. By deploying additional Locus Robots during high-volume periods, the company reduces the need for extensive onboarding and training, thus avoiding the errors and inefficiencies that come with seasonal hires.

“Adding robots is like supplementing our headcount,” Raines explained. “We can scale up without dramatically increasing labor, and that’s a game-changer for throughput and capacity.”

The integration of robotics also enhances precision and reduces manual strain. Robots streamline processes by delivering items to specific locations, ensuring fewer misplaced items and a higher level of accuracy. As Raines noted, this eliminates the inefficiencies of traditional baker’s carts and reduces the physical strain on the associates.

Flexibility as a Competitive Edge

One of the recurring themes in our conversation was flexibility. For nGroup, flexibility isn’t just a word; it’s a core operating principle. Duron described how the dynamic nature of their warehouse operations allows them to adapt layouts, workflows, and even vendor-specific areas in real-time. Unlike fixed assets such as conveyors, their use of robots allows them to reconfigure the facility quickly to meet evolving client demands. This flexibility is crucial in a market where the retail landscape is constantly shifting.

“Business changes, product mix changes, seasonality changes,” Duron explained. “We’ve created an environment where we can adjust quickly without losing efficiency.”

This adaptability extends to their partnerships with clients. Transparency and collaboration are foundational to their approach, ensuring clients understand the benefits of a flexible, automated system. As Raines put it, nGroup doesn’t just provide a service. They also offer a partnership that evolves with the client’s needs.

Safety and Employee Satisfaction

While warehouse automation often focuses on efficiency and cost reduction, and it should, nGroup’s strategy demonstrates that it can also improve safety and employee morale. During our conversation, Duron proudly shared their milestone of one year without any OSHA incidents, attributing much of this success to their warehouse automation integration.

The presence of robots has reduced the need for heavy equipment and minimized traffic in the warehouse, which creates a safer environment, and associates are better able to focus on their tasks without the risks associated with high-speed manual operations. “We’ve enhanced our ability to deliver a safe environment,” Duron said. “The robots create a clear structure around where humans and robots operate.”

Beyond safety, the simplification of tasks has led to increased job satisfaction. Raines noted that warehouse automation has made associates’ jobs easier, reducing physical strain and simplifying complex processes. This has had a tangible impact on morale, making the warehouse a more attractive place to work.

Integrated Technology

One of the standout elements of nGroup’s operations is its integration of multiple technologies. By combining Locus Robotics with OptiTurn (a WMS and returns solution) and TACT (a labor management system), nGroup has created an ecosystem that enhances operational visibility. These systems work together to provide real-time insights into productivity, allowing the team to address issues before they escalate.

This integration also drives significant cost savings. With Locus Robotics alone, nGroup has doubled the cost savings they can offer clients. And by absorbing the upfront investment in warehouse automation technology, nGroup removes financial barriers for clients, delivering a turnkey solution that is both effective and accessible.

Looking Ahead: Trends in 3PL and Reverse Logistics

As our conversation wrapped up, I asked Duron and Raines about the future of 3PL and reverse logistics. Their insights were clear: flexibility, automation, and cost efficiency will remain central themes. In an industry where labor shortages and shifting retail trends create constant uncertainty, companies that embrace adaptable, automated solutions will thrive.

Raines summed it up perfectly: “You have to be extremely flexible. The landscape is always changing, and automation allows you to pivot quickly without sacrificing efficiency or quality.”

The Takeaway for Warehouses

Holiday returns may be a logistical nightmare, but as Duron and Raines showed, they’re also an opportunity to innovate and excel. By leveraging automation, embracing flexibility, and prioritizing safety, nGroup has set a powerful example for how 3PLs can navigate even the busiest seasons with confidence.

For retail warehouses and logistics providers, the message is clear: the future belongs to those who can adapt, integrate, and collaborate. And as nGroup has proven, automation isn’t just a tool to be used by warehouses. Instead, it’s a strategy for long-term success.

Listen to the full episode here to learn how to automate your 3PL or retail warehouse for unmatched flexibility and unlimited throughput.