Automation in Grocery Retail Helps Increase Market Share
30th May 2024
Safe growth in an uncertain environment: a particularly ambitious goal in the intensely competitive industry of grocery retail. Those who do not react quickly to trends by optimising their offers are in danger of losing customers, and thus also market shares. Meanwhile, consumer behaviour is becoming ever more difficult to predict, and global crises and supply chain disruptions have added to that complexity. Modular and flexible automation solutions such as TGW Logistics’ FullPick help meet these challenges.
Decision-makers in grocery retail invest a lot of time and energy into staying up-to-date regarding the newest developments and trends. They are in close contact with their customers, communicate with suppliers and consultants, and visit international symposia. Their objective: to not only secure but also increase their market shares.
Navigating an unpredictable world
Over the past few years, grocery retail has changed significantly. Life, work and eating habits have evolved: it is hardly possible to predict the needs of consumers. The products and services offered, cost structures and supply chain have to be optimised in shorter and shorter cycles. In this context, which combination of distribution channels, store concepts, product ranges and service models is best suited for generating sustainable profits?
Intralogistics as an enabler of successful business
As the central backbone, the supply chain is dependent on digitalisation and automation. But which kind of automation is the most effective? What is certain: turnover and market share growth and resilience can only be achieved with the use of flexible and above all efficient automation solutions; thus, intralogistics is an essential business enabler.
In order to remain successful for the long run, companies either have to create an offer that addresses the broad range of individual needs… or focus on a very specific niche. There are four essential fields of action for those striving for a broad range:
• New store concepts
Alongside adapting established distribution channels, grocery retail is also developing new store concepts that better correspond to the evolving shopping habits. Increasingly, many customers are opting for multiple small shopping experiences rather than taking a single large weekly trip to the supermarket. Some of these small trips are to convenience stores located close to where people live or work. A small footprint and a curated product range facilitate quick, and above all convenient, shopping.
The disadvantage from the perspective of retail: these small stores hardly have any storage space and therefore have to be replenished often with small quantities. This replenishment encompasses not only the usual bulk packages but also individual products, and it all has to be processed efficiently through the same logistics centre.
The changing order structure, a larger assortment of items, and varying load carriers: TGW Logistics addresses these challenges with FullPick. The system design guarantees a consistent order picking performance regardless of the order structure. Different mechatronic modules ensure efficient order picking of individual customer packages as well as automatic palletising of bulk packages on Euro pallets, half pallets or roll cages.
• New or adapted product ranges
For the past several years there has been a strong trend toward healthier lifestyles. This affects fresh and frozen goods in particular.
With the seasonality of many products, evolving product ranges is nothing new for automated systems; however, the strong increase in the number of products within a product group has consequences: the quantities of each item ordered by stores are decreasing, making it necessary to be able to handle new product packaging. Furthermore, the reduction of throughput times is becoming more important so that perishable products will keep for as long as possible in the stores.
FullPick provides the necessary long-term flexibility. The use of trays for transporting goods isolates the system from the declining quality of the product packaging. In the case of direct transport, such packaging could cause malfunctions and reduce system availability. Moreover, FullPick can be used in all temperature zones – from ambient to frozen temperatures – without issue.
• Improvement of the service level
In order to retain consumers, grocery retailers need not only an extensive store network, but also a strong service mentality. E-commerce plays a major role in this regard. The digital presence and seamless shopping experiences across different channels are becoming more and more relevant. Companies must therefore strengthen their online platforms and the services associated with them in order to offer consumers an optimal shopping experience at home or in the store.
When it comes to large numbers of online orders to be picked each day, specialised fulfilment centres provide the best payoff. Yet e-commerce orders can also be prepared efficiently using a suitably flexible automation solution for distribution centres that focus on classic store supply. For this purpose, FullPick relies on an optional module that makes it possible to pick individual sales units (e.g. for online orders) at ergonomic 1:1 workstations.
• Social significance
The role that grocery retail plays in our society became clear during the coronavirus pandemic. Companies in this industry not only reliably supply consumers with necessary products, but are also important employers. When investing in automation, therefore, the spotlight should be on both increasing productivity and improving ergonomics for employees.
FullPick considers both aspects: the system relieves the monotone, physically strenuous tasks of employees – particularly in freezer areas. Moreover, due to its modular composition, FullPick is also designed to minimise energy costs for the long term. These examples illustrate that future success in grocery retail depends in part on selecting the appropriate automation solution. A lot can change during the lifetime of an intralogistics system, as the last 20 years have demonstrated. FullPick allows retailers to operate flexibly and use logistics as an enabler.
read more