GUEST COMMENT A flexible warehouse environment is needed to adapt to fluctuating customer demand

Thomas Genestar, managing director of Exotec in Western Europe explores the benefits of flexible automation in the warehouse environment, to ensure online retailers remain agile during challenging periods.

Online retailers benefitted significantly as shoppers turned to their phones, laptops and tablets during the Covid-19 pandemic and away from the high street. However, the tides have since turned with the pressure mounting on many online retailers as customers return to stores. Buyer behaviour has shifted once again, leaving a majority of successful online retailers floundering, indicating that a lack of agility to respond to the market has severely impacted business.

The adoption of flexible automation in warehouse environments can help struggling retailers to respond and adapt to fluctuating demands brought on by the ongoing cost of living and energy crises.

A difficult time to operate online
Recent research has examined the performance of the UK’s biggest online retailers in 2022. Despite pandemic success, sales and profits have dipped. This is particularly noticeable across the top 10 companies in the sector. Over the course of 2022, retailers such as AO.com, Asos, Boohoo and Ocado have suffered losses. A prime example of this would be Made.com which saw a 95% drop in share price and a 32.6% decrease in profits versus 2021. This has led the company into administration, with the brand being strategically bought out by Next.

Ever-changing consumer habits, surging costs, supply issues and global economic downturn are driving forces for challenging times ahead. As retailers needed to adapt to Covid-19, similar questions are being asked again as consumers and businesses alike face ongoing cost-of-living and energy crises.

According to a recent flash PMI survey compiled by S&P Global, business activity in the UK fell for a fourth successive month in November 2022, adding to growing signs that the economy is in recession. Nevertheless, the market is known to fluctuate and may soon pick up again. The global economy is unpredictable, and unfortunately, one outcome is businesses in flux. However, the growing trend of automation will help businesses remain more consistent and flexible regardless of market outlook.

All of this will significantly impact how and where people spend their money during the Golden Quarter and beyond. For this reason, being smarter in the way retailers manage stock, logistics and customer demand is critical for survival. At the heart of this is the warehouse.

Flexibility enables preparation for the coming storm
Retailers will need to take a flexible approach to automation in the warehouse environment to ensure that they are prepared to adapt to rapidly changing situations. While automation isn’t a new concept in the UK, traditional automation is sized on anticipated volume of orders based on a long period of time. As a result, legacy technology and equipment is no longer enough to support the warehouse environment of today. Instead, robotics has huge potential to support the complex and ever-evolving warehouse landscape, with the benefits speaking for themselves.

There is no one-size-fits-all solution that can tackle the challenges that online retailers are up against, but that’s the strength of flexible warehouse robotics. Businesses can instead adopt robotics that are tailored to their needs, which can be easily scaled up or down in the future, supporting human workers while keeping up with shifting demand. This is the flexibility online retailers need during unpredictable times.

Automation breeds agility
The incorporation of flexible automation in warehousing is no longer a want, but a need for businesses in order to achieve sustainable growth in uncertain times. Online retailers must embrace robotics to increase productivity and improve the working environment for human staff, by reducing the need for people to walk long distances picking products over the course of a shift. Storage density is also increased, allowing for a reduction in warehouse costs, as robots can be deployed to retrieve totes from racks that are several metres in height.

Effective robotics systems work as a fleet, with individual robots programmed to prioritise the most urgent orders, working alongside human operators. Crucially, a system like this enables processes to be adapted rapidly as customer demand changes.

Moving beyond legacy
Legacy equipment often struggles to adapt or change with fluctuating demand, which isn’t an ideal place to be given the current volatile retail climate. If encountering busier periods than expected, some retailers’ warehouses simply won’t be able to cope, and customers will be impacted – reducing the likelihood of them returning.

By embracing a flexible warehouse environment that combines human workers with robotic solutions that are scalable and adaptable to uncertain times, online retailers can avoid the same fate as the once untouchable giants of e-commerce.

Thomas Genestar, managing director of Exotec