An urge to adapt to the changıng retail environment

The Coronavirus lockdown and the resultant collapse of the high street has left many of the companies that had always relied on retail outlets as their main channel to the end consumers of their products with little option but to develop their direct B2C online sales operations. But, this change of emphasis requires a completely different approach to order fulfilment. In other words, it is the race against the shortcomings of companies’ logistics operations. 

Adapt to surive

How to get ahead of this supply & demand race, depends entirely on how you managed to adapt to stand on wet ground. By wet ground, of course we mean the severe shift of change that is the result of both pandemic and the customer behaviours. It is no secret that the high street has been losing battles on this wet ground to online sales for a long time. Though many people consider Covid-19 as the black sheep, it was a lost cause long before it. However, most of the CEOs managed to oversee this situation and kept relying on old tricks with a limited R&D in the field of automation. Yet, thanks to the limited faith in automation, these companies managed to live just another day. “The figures and number of sales by automation blinded companies for a while. Automation was a blinder and altered the perception and thus postponed the inevitable,” says CEO of Makhina Mehmet Ali Çalışkan and adds, “The adoption of automation, and the use of autonomous mobile robots (AMRs), should have been considered a saviour long before the Covid-19, but only now, after such a loss, the importance of automation is begun to be realized.”

The right partner

Has automation enabled e-commerce growth, or has e-commerce growth enabled further automation in the warehouse? Çalışkan believes this is an unanswerable question, as one factor surely impacts the performance of the other. Nonetheless, Çalışkan believes that the companies seeking to find a way out of storm will need to appoint a logistics partner with the right skills sets to support them especially in case of emergency. Çalışkan says “Goods-to-person order picking solutions using AMRs, enable much more higher pick rates than traditional, manual operations. It’s not a surprise that automation is by far the most efficient way to cope with the issues related to social distancing. Using the right technology with the right retail partner can increase the picking performance up to 6 times, and this means a lot these days.”

Some are more equal

According to Çalışkan, not all sectors of retailers are equally affected. For example, grocery has seen a shift towards home delivery whilst overall demand remains stable. Department stores and clothing retailers are experiencing an overall downturn. Many businesses have been finally realizing that their existing logistics partner might be great at moving pallets around, but in a lot of cases, they cannot offer the kind of services that a high volume internet retail operation needs. Simply put, the fact is that supplying pallet loads of product from a warehouse or distribution centre to a retail outlet is a relatively straightforward process, but many third party logistics services companies are often not interested in – or don’t have the relevant skill sets to undertake the sophisticated order fulfilment tasks that internet retailers need. “This kind of high volume operation cannot be sustained without the aid of automation done right,” underlines Çalışkan.

A change is coming

The pandemic has highlighted just how drastically the needs of a retail business can change in a very short period of time. How could anyone have predicted the sudden change in direction that retailers would face this year – and what might next year bring? What has really changed is the retail landscape that automation is feeding. Thanks to the automation, e-commerce has accelerated by five years in the past five months, which is pushing $1.5 billion of investment into its operations in order to generate 70% of its revenues online. Retailers and their suppliers will have to adapt to the challenges of a retail environment in which the need to ‘socially distance’ is set to be with us for some time and will inevitably drive more of those shoppers who remain loyal to the high street experience. In conclusion, many third party logistics services suppliers will have to reinvent themselves too. The companies will start shifting their focus from their retail sales to online channels. Unless you are ready to long wait for a change of heart or a miracle once the pandemic is over, you will need to invest in value-added retail environment in order not to face an uncertain future.

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