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Gamification and logistics: The new dynamic duo

illustration of two people playing chess

The world of logistics adds a whole new meaning to the phrase ‘time is money’ As two-day and even same-day delivery become the norm, warehouses being forced to invest in new strategies to meet this escalating demand for rapid home delivery.

But contrary to popular culture, this doesn’t mean that the robots are taking over. Even as labor-saving automation and AI technologies are being introduced, we’re seeing increasing efforts to transform human productivity in warehousing. 

Gamification has existed as a strategy for strengthening brand and customer experiences for several decades. But today, more and more businesses have begun turning this approach back on themselves to enhance the employee’s experience at work – especially within the demanding logistics space. 

In this post, we’re going to explore the emerging trend of gamification in warehousing and logistics – and why it’s become one of the most fashionable tools in logistics.

It’s ‘game on’ in logistics

Amazon has long been criticized for its punitive approach to worker productivity, with workers routinely penalized for ‘time off tasks’ – including bathroom breaks or medical emergencies. 

Yet Amazon has recently decided to start using carrots, rather than sticks. Their in-house rewards program FC Games has now rolled out to fulfillment centers in over 20 states, allowing employees to earn digital currency while working that can be spent on Amazon goods. 

How? By participating in competitions that incentivize them to achieve the best speed and accuracy rates for different fulfillment tasks.

But Amazon is not alone in turning to gamification techniques in an attempt to motivate workers. 

Target first experimented with gamified programs back in 2013 by giving cashiers a green or red light depending on how quickly they scanned items. Walmart has ventured into using gamification for worker safety, experimenting with wearable tech to gather ‘safety scores’ from each shift to encourage safer warehouse practices.

What is gamification?

Gamification is a concept where the principles and mechanics of gaming are applied to real-world contexts, usually to bring about a desired business result. This could be to increase productivity, foster customer engagement, or achieve higher staff retention.

So, what is it about game design that helps companies to advance their goals?

For a game to be successful, it has to find ways to keep people playing. The central strategy to achieve this is to continually escalate the incentives on offer; as a game gets more difficult, the rewards for achieving the objectives become bigger. 

The psychology of the challenge versus the reward is at the very heart of gamification. The game’s objective is to prolong user engagement for as long as possible, using tools such as point scoring, leaderboards, and achievement badges to create social recognition and new challenges. For the player, the aim is to ‘level up’ and ultimately win. 

Thus, the power of gamification is that it helps a business to present their goals as being aligned with that of their customers or employees. Gaming principles provide individuals both with motivation and a tangible sense of reward for achieving what’s been set out before them, which creates gratification and enhanced feelings of loyalty.

Once you start looking, you’ll find aspects of gamification at work across a variety of industries. Remember the movie Up in the Air starring George Clooney as a nomad businessman, aiming to be just the 7th person in history to accrue a million frequent flyer miles? That’s gamification in a nutshell.

Airlines realized early on that a gamified system of accruing points or miles in the hope of reaching ‘the next level’ – and the perks and prestige that come with being part of an exclusive club – is a powerful incentive for customers to stay loyal.

Sephora’s Beauty Insider Rewards Program uses the same premise. Customers start out on the free to join ‘insider’ tier and must spend a certain amount per year to progress up the ladder, which comes with a variety of escalating benefits as the number of eligible members drops.

A screenshot explaining the  member benefits of Delta’s SkyMiles program
A screenshot explaining Sephora’s Beauty Insider Benefits

The similarities between Delta and Sephora’s loyalty initiatives are clear. They stress that every tier, including the first, offers an enhanced experience, but that the very best is saved for the highest levels – just like a video game.

The benefits of gamification

Positive reinforcement 

Gamification is a classic case study in positive versus negative reinforcement. The former rewards people for the desired action, while the latter encourages a certain action in order to avoid or take away an adverse consequence.

Multiple studies have shown that while negative reinforcement may be more effective in the short term, this ultimately tapers off as people grow accustomed to the outcome – or grow resentful and decide to check out altogether. From a business standpoint, the result is often high employee turnover or customer churn – something Amazon can definitely attest to.

Gamification is a positive form of reinforcement by incentivizing certain behaviors over the long term. For example, if an initiative can tell an employee that continuing at their current trajectory will put them at the top of the leaderboard for the quarter, they’re far more likely to continue. Likewise, a customer is more likely to make repeat purchases from the same brand if it allows them to accrue loyalty points that put them in reach of an exclusive discount.

Ability to give direct feedback

As work environments become more digitized, it’s now possible to measure metrics like worker productivity and error management in real-time. This means that team managers can give much more timely feedback, rather than relying on monthly or quarterly data reports that don’t reflect a worker’s current performance. 

This is also highly beneficial for employees, as they can get actionable insights that help them take ownership over their performance. If managers can be proactive in identifying certain trends i.e. that a worker begins lagging in speed at a certain point in the day, they can problem-solve on ways to rectify this. 

Encouraging a sense of community

By introducing a sense of fun and competitiveness to the workplace, businesses can promote a much more team-centric culture that is orientated around staff achievements, rather than productivity targets that feel very divorced from work on the ground.

Gamification also presents opportunities for more engaging team-building exercises by encouraging teams to work together to meet targets in exchange for rewards and recognition. And when employees can take pride in their accomplishments (and that of their co-workers) it adds another layer of meaning to their work.

Why is gamification such a great fit for logistics?

While the principles of gamification can be applied to a range of different settings, there are several reasons why they work so well in logistics. 

If we picture the average fulfillment process, it’s full of manual tasks which quickly become mind-numbing for workers. Monotonous activities such as picking, packing, and processing returns often face much lower productivity rates – especially if employees don’t feel recognized for their efforts. 

With this in mind, it’s not surprising that high staff turnover is frequently cited as one of the biggest challenges in logistics. But with labor shortages continuing to bite amid soaring online sales caused by the COVID-19 pandemic, high warehouse productivity has never mattered more. 

If businesses are faced with the need to do more with less, gamification presents one way that they can foster higher levels of self-motivation amongst their employees, especially as peak season order volumes are set to become the norm.

Top tips for implementing gamification in a logistics setting

With such a broad range of repetitive tasks that can be gamified for increased engagement, there’s no shortage of ways that managers can bring gamification into a warehouse environment. However, it’s important to follow best practice to avoid implementing a program that falls short of your objectives:

Identify pain points. When you’re looking at introducing gamification to your operation, it’s best to select one or two key areas to trial before rolling it out warehouse-wide. Whether it’s improving the efficiency of dynamic pick locations or setting a time target for packing, there’s likely a specific area of the fulfillment process that offers a natural starting point. 

Use an opt-in system. If gamification is going to act as positive reinforcement, it needs to be voluntary. If it’s a genuinely good initiative, you shouldn’t have any issues getting staff to sign up!

Set realistic goals. You need to strike a careful balance between targets that incentivize workers to push themselves versus those that create employee burnout and resentment. If objectives are too difficult this could end up spawning additional problems, such as speed in fulfillment coming at the expense of accuracy, or higher incidences of workplace injury. 

Decide on the reward. Rewards should provide incentives for workers to meet further targets, rather than just plateauing once they hit a certain milestone. For example, you could have a system where maintaining a high pick rate puts employees into a tiered contest against other high-achieving workers. 

Provide recognition and status. Being rewarded for good work is a great feeling, but the opportunity to enhance your workplace reputation can be an even bigger incentive. There are numerous ways you can do this, from having a leaderboard in staff rest areas to sending out an email blast every month with the latest staff achievements. 

Real-time feedback. Responsiveness is critical to employees being motivated to meet targets. If they can’t track their performance as they go, it’s impossible to get an accurate sense of their progress. 

Be aware of the pitfalls of gamification. For all its positives, gamified initiatives aren’t going to appeal to everyone. Gamification mustn’t result in employees being ‘shamed’ for not meeting targets or a work culture where a toxic level of competitiveness results in team relationships being damaged.

The future of gamification

As gamification is fine-tuned by businesses, this opens the door to the greater personalization of productivity by using accumulated performance metrics for individual goal-setting. This is far more engaging for employees, compared with indiscriminate objectives that don’t consider factors such as skill level, age, or health. This also helps to prevent situations that lower workplace productivity, such as injury or illness.

But there’s no doubt that the future of gamification – and its viability in the eyes of workers – will be decided by emerging technologies that improve the security and immersiveness of programs. 

Gamification is set to undergo a major transformation as companies realize the benefits of applying gamified principles to different sectors of the workplace. With 69% of employees more likely to stay for more than three years if they have a positive onboarding experience, this is one such area where gamification could revolutionize how businesses engage with new hires, especially when combined with the growing affordability of extended reality (XR) technology.

Blockchain is also set to be a major asset in the face of ongoing concerns about data privacy. Employee data that’s decentralized and encrypted will assist businesses in promoting trust and participation in their gamified initiatives, especially if workers have a stake in how rewards are earned and divided amongst teams. Blockchain also offers the ability to create a unique rewards system by using tokens to exchange for various benefits, which aids in building your internal brand and company culture.

The meaning of gamification

We might not think of logistics as being about fun and games, but bringing gamification into the warehouse environment could well hold the key to increasing worker productivity and satisfaction.

But gamification shouldn’t just be thought about as encouraging workers to get to the top of a leaderboard. At its heart, gamification is about providing employees with a clear set of expectations, ensuring that they understand what their efforts are contributing to. Otherwise, you’re implementing yet another performance metric without considering whether or not it empowers your staff to do better.

Transparency is the secret to successful gamification. When gamification is supported by wraparound practices including feedback sessions and targeted development programs, managers and employees can use the insights gathered from these initiatives to aid long-term professional development.  

Because when workers can see in real-time how they’re adding value, they’re incentivized to keep achieving the very best they can. Then everyone gets to be a winner.

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