Scanning the horizon: How retail warehouse management is shaken into change
The world is shifting and it’s impacting every aspect of our lives. Of course, this has wide-ranging ramifications for brick-and-mortar retailers, e-commerce, warehouses and their related supply chains alike. In this first article of our new ‘Scanning the Horizon’ trend series, we will discuss five ways consumers and businesses are responding, and what you can do to stay on top of the trends.
1. Moving with the digital evolution
With many retailers turning from bricks to clicks over the past decade, this trend is hardly a new one. However, it has recently skyrocketed in ways few could have anticipated. New data from IMRG states that UK online retail sales rose by 22% in the first week of April compared to the same period last year. However, while these figures paint a promising picture for online retailers, they’re largely due to sales in a select few categories. For example, the beauty sector increased sales by 140%, while electricals saw a 90% rise. In contrast, online clothing sales dropped by 20% compared to the same period last year.
It’s clear that online retail continues to play an important role in the basics of everyday life. Since e-commerce has been relatively unaffected by restrictions and regulations, it is expected to hold up well throughout a turbulent 2020. Prologis anticipates e-commerce, which grew by 16.7% globally in 2019, to continue to increase. Meanwhile, across the EU-5 (UK, France, Spain, Germany and Italy), Forrester anticipates a drop in non-grocery offline sales of 10.4%, while predicting e-commerce growth will remain mostly neutral.
2. Raising the bar for e-commerce operations
For warehouses, this shift to online avenues has major implications. In fact, e-commerce businesses require three times more warehousing space than their offline counterparts (Urban Land Institute). And it doesn’t stop there. With new uncertainties in the market, businesses are doing what they can to mitigate the risk of disruption. Regional solutions may be pushed due to their greater flexibility, proximity to urban centres and general isolating of the supply chain from external factors. Additionally, businesses might consider bringing forward orders before global prices rise, spreading suppliers and carrying higher inventory levels as an industry standard.
This means that not only do they need more floor space, they also, quite literally, have to raise the bar. By expanding the height of warehouse structures, so-called fulfilment centres are able to more efficiently store a larger amount of inventory. This, in turn, lends itself for easy upscaling as a business grows, being a more flexible warehouse design.
Of course, such a change doesn’t come without challenges. Structures have to be built stronger, with more reliable materials. Meanwhile, warehouse equipment should be able to reach new heights as well. With stock becoming less visible from a distance, technology can serve as a helpful set of eyes. Physically, long-range scanning can offer a solution for scanning hard to reach bar codes from further away. Digitally, warehouse management and order picking systems allow for real-time monitoring of stock, minimise human error and connect business divisions.
3. Food warehousing keeping its cool
Perhaps the most obvious move to online can be seen in the increasing demand for fresh and online groceries. Again an existing trend, recent developments have severely boosted it, with grocery delivery services being booked out for weeks at a time. While at the start of the year only 3%-4% of grocery shopping in the US was online, it recently surged to 10%-15%, according to Bain & Company. Mike Coupe, Chief Executive of Britain’s second largest retailer, Sainsbury’s, revealed that the chain had doubled its online grocery volumes and increased sales slots by half. Changes he thinks are here to stay: “I suspect once people get into the habit of ordering their groceries online, it’s likely to be sticky.”
Now that digital grocery shopping is hotter than ever, the warehouse industry needs to keep its cool when it comes to design for the fresh food sector. In 2019, CBRE already projected the trend would translate into industry demand of almost 10 million square metres of additional cold storage warehousing space over the next five years. This also boosts the requirement for equipment that holds up in cold, sometimes freezing, temperatures.
4. Safety precautions by and for staff
With hygiene requirements being first priority all throughout the world, work environments are becoming more complex. Globally, some retailers went as far as shutting down online operations in a bid to protect warehouse staff. Meanwhile, Amazon has been making headlines following protests over protections for employees, leading to 150 new safety measures being put in place. Among those are masks, sanitising gels, social distancing guidelines and temperature checks. And they’re not alone. All throughout the warehousing sector, technological innovations are being implemented to keep operations on track while ensuring employee safety.
Additionally, more equipment and more personalised equipment prevents sharing. Especially holsters and wearables ensure low-touch operations and avoid an unhygienic work environment. With over 15 accessories and an ability to connect to the BS10R Sepia ring scanner, the MT90 Orca slots right into this trend.
5. Unchanged high standard for customer satisfaction
The fifth and perhaps most challenging response is really not a change at all. While businesses are forced to submit and adapt to seemingly endless amounts of changes, customer expectations are as high as ever. Customers have grown accustomed to fast order times, flexible return systems and top-notch service, often to extremes like same-day-delivery. Staying on top of logistics is essential for customer retention. Having set an unprecedented example of quick delivery, Amazon shows just how important this can be. This past April, its received 800 000 negative reviews – double the amount as April 2019. Despite rapid hiring, the e-commerce giant struggled to keep up with demand.
So, how do you stay on top of the change while keeping your customers happy? Bullet-proof warehouse management and flexibility may offer valuable solutions. Technology eliminates human error and allows for fast and flawless communication throughout a business and its supply chain.