Dematic Accelerates Micro-Fulfillment Strategy With OST

Dematic is a leading supplier of integrated automated technology, software and services to optimize supply chains. At OST, we have worked with Dematic on their Dematic Direct ecommerce initiative as well as an enterprise mobile experience application for Dematic’s workforce.

Dematic is also a pioneer in micro-fulfillment solutions, and when they needed a mobile experience design partner to accelerate the development of their innovative technology, they turned to OST.

To learn more about micro-fulfillment, mobile application development and how digital experiences are driving change across industries, read the full story below!

Three people talking in a warehouse with boxes on pallet racks.

The Evolving Challenges of Retail, Product Fulfillment and Last-Mile Delivery

We’ve come a long way from paper catalogue orders, but achieving next-day order fulfillment may still seem like a far off achievement to many businesses. Unfortunately, changes in the industry are occurring at an unprecedented pace. In fact, 77% of consumers are more likely to shop somewhere that offers same-day delivery.

And the trend is continuing toward shorter and shorter product fulfillment times. Today, a combination of shifting consumer expectations and industry disruptors has put one-hour order fulfillment at the forefront of the supply chain conversation, especially for grocery retailers and especially for those in urban areas.

Retailers in urban areas face a dense matrix of challenges related to their supply chain. Chief among them are the following:

Image of an industrial building.

Real Estate

As urban centers develop, real estate costs trend upward and space becomes increasingly limited. Thus, unused space and underperforming locations become a huge liability. And if retailers are trying to break into new geographies, the cost of entry becomes more and more daunting

Image of product on pallets.


“Out of stock” is simply not an option for retailers who want to compete. But inventory management is becoming significantly more complex due to the increasing number of digital platforms in which inventory is featured. Consumers who shop online expect to find accurate, up-to-date information about inventory across all their digital experiences (website, newsletter, mobile app and other channels) in real-time. At the same time, in-store shoppers don’t want to face barren shelves as online orders drain item availability, especially for high-demand essentials.

Image of a parking lot for semi-trucks.


Delivering goods directly to consumers is one of the most fraught issues in modern retail. For many businesses, third-party services have swooped in to close the gap between consumer expectations for same-day delivery and retailers’ struggle to staff up to meet those demands. But working with third-party vendors has brought its own set of issues.

For example, retailers have given up a lot of control over the shopping experience. Now, delayed orders, improperly substituted out-of-stock items, incomplete orders, damaged goods and other negative experiences tend to reflect back on the retailer rather than the third party service. Similarly, huge volumes of consumer data often reside with those third-party vendors. This limits retailers’ ability to personalize the online shopping experience and gain data-driven insights from consumer behaviors.

And of course, delivery is inherently linked to the challenges of inventory and real estate. Third-party services may not accurately display your inventory on yet another digital channel. Timely delivery becomes hampered by traffic density and distance from fulfillment centers. Now, fast and convenient same-day delivery services have become a basic expectation for consumers—but so have low prices.

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Technology Capabilities

The entire ecosystem of next-day, one-day and one-hour fulfillment relies on advanced, interconnected technology and software. Enterprise resource planning tools (ERPs), warehouse management software (WMS), mobile applications, web services, IT infrastructure, physical devices and a wide variety of other systems need to seamlessly operate in concert to deliver a high-quality experience not only to consumers, but to everyone involved in the end-to-end fulfillment process.

Most retailers are in the business of providing great products and experiences to customers—not the business of IT. They’re looking for an all-in-one solution to the challenges they’re facing with real estate, inventory and delivery without getting mired in technical debt as they try to implement it.

Enter Dematic’s micro-fulfillment solution.

Micro-Fulfillment Solutions Drive New Efficiencies and Business Value 

As a leader in automated technology, software, and services, Dematic saw the challenges retailers in every industry have been facing, and they began developing an innovative, highly configurable product fulfillment solution.

To address space, Dematic ensured that their solution could be configured for an area as small as 10,000 square feet. To address inventory challenges, Dematic has built proprietary software solutions that integrate with inventory management, warehouse management, ERP systems, and other business tools. To address delivery, even during an outage, Dematic’s micro-fulfillment solution can be manually accessed via aisles and shelves so retailers can keep delivering.

Zoomed-in image of the outside of a building with a light blue sky above it.

In addition, Dematic’s solution offers a wide variety of additional capabilities. Examples include:

  • Multi-Temperature Environments
  • 12-Week Installation
  • 24-7 Support 365 Days a Year
  • Faster Order Fulfillment
  • Storage of 8,000 to 15,000 SKUs

With Dematic’s micro-fulfillment solution, retailers can accelerate product fulfillment at scale, integrate operations across locations (including distribution centers and dark stores) and drive new efficiencies and business value.

In order to go beyond just offering new capabilities, Dematic worked with OST to develop a mobile application and data infrastructure that fully integrates with their solutions, accelerates order fulfillment and provides actionable insights to retailers.

Creating a Mission-Critical Mobile Experience

OST has worked with Dematic on several projects in the past, so their team reached out when they needed a mobile app that could integrate their micro-fulfillment solution with existing order fulfillment infrastructure at retail stores. For example, many stores have a fast-pick area for employees to quickly and efficiently grab commonly ordered items and place them into orders. For other items, employees still need to walk out into the store to pick them up.

In light of these conditions, the app needed to connect to Dematic’s central system for order fulfillment and help employees efficiently pick items from the automated system, fast-pick and store. To get started, OST worked alongside Dematic’s team to build a proof-of-concept (POC) mobile app that demonstrated basic design and functionality. Following the successful POC, OST was asked to fully develop the app.

The app is purely for internal use at retail locations for order fulfillment, and it works a bit like this. First, the customer uses the retail brand’s app to place an order. That order gets sent to Dematic’s proprietary software, Dematic iQ. For a simple order of commonly requested items, the entire order can be processed by the micro-fulfillment solution, which would output a tote of collected items for that order. Next, the app would create a task for an employee to scan the order and move the tote to an order staging station for consolidation, packaging and pickup or delivery.

For a complex order, separate tasks are created in the app for each of the different types of picking that employees would need to do:

  • One task for checking and scanning the order from Dematic’s micro-fulfillment solution
  • One task for picking and scanning items from the fast-pick station
  • One task for picking and scanning items from the store

Employees using the app can choose any task, all of which ultimately get the customer’s items to the order staging area where they are consolidated, packaged, and sent out for delivery or pickup.

While Dematic iQ integrates with warehouse and inventory software to minimize the risk of out-of-stock issues and substitutions, the app also includes functionality for order substitutions and other situations that retailers often face with online ordering.

Two people working on a tablet.

Mobile Application Design and Development

Knowing that retail workers in a wide range of different settings would be the primary users of this application, the team at OST set out to create an intuitive native mobile app that would seamlessly plug in to existing workflows in a variety of contexts.

To accomplish this goal, OST relied heavily on user testing data throughout a fast-paced design and development process. For example, the team organized multiple hands-on, in-person sessions with retail workers who were not familiar with Dematic, the micro-fulfillment solution or the application. The team would ask them to fulfill orders using the mobile app prototype to gather real-world usage data that impacted features and improvements at each stage of product design and development.

These sessions and other product research are a crucial part of OST’s user-centered design process. User testing creates feedback that informs new features that will improve the app—which can then be tested by users. These feedback loops combined with our Agile approach accelerate development and result in robust, user-focused applications.

On the technical side, OST built this native mobile app utilizing Xamarin. This allows Dematic to provide a cross-platform user experience on Android, iOS and Windows devices. Among a host of other features, OST built application integrations and functionality based on the unique needs of retailers, including:

  • Laser scanning
  • Barcode scanning
  • Camera scanning
  • Manual barcode entry

OST fully developed this app on an accelerated timeline of approximately three months so Dematic could show their micro-fulfillment solution at their Material Handling and Logistics Conference.

Since then, Dematic has successfully partnered with a variety of retailers to get micro-fulfillment solutions in stores and give those retailers an edge in a highly competitive industry that is changing at lightning speed.

Are You Facing Business and Technology Challenges?

Let’s Talk

Clients like Dematic come to OST because we have highly capable teams who can design and build exceptional mobile applications, cloud infrastructure, custom software and more. Clients keep coming to OST because we bring decades of business and consulting experience into every project we undertake. If you want help solving for the complex challenges your business is facing, we’d love to start a conversation.

We look forward to hearing from you!