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UK shoppers unmoved by Black Friday

Posted on by Keith McKinley

A poll* by intralogistics innovator Dematic has found that while many people are planning early Christmas purchases in response to warnings of supply chain delays, 3 out of 4 (76%) online shoppers are not planning to take advantage of this year’s ‘Black Friday’ event.

Despite being billed as one of the biggest shopping dates in the diary, the majority of UK and Irish consumers say they will not be tempted by the promise of ‘unbeatable deals’ on November 26. This is likely the result of a difficult year as many people have been forced to count the cost of living through the COVID-19 pandemic.

Concerns raised by shoppers who responded to the poll included money troubles, the validity of the bargains when compared to historical pricing, and the excessive consumerism represented by the event.

However, the poll revealed that there are still bargain hunters to be found in the run-up to the festive season which will be a relief to retailers. More than one in six respondents (16%) admitted that they were planning to shop online during Black Friday and spend even more than last year.  A further 7% said they would be taking part but would be taking a more cautious approach by spending less than 2020.

Steffen Thierfelder, Managing Director of Northern Europe, Dematic, commented: “It is clear from the survey that people are more wary about spending during the Black Friday event this year. This may be in response to the tough year that many have experienced in the wake of the pandemic.

“However, Black Friday will still place enormous demands on retailers to service those consumers who are planning to shop for a bargain. This is yet another time of the year when demand can surge, so retailers should be thinking about integrating innovative automated logistics solutions. This will ensure that orders get to where they are needed as fast as possible.”

Dematic designs, builds and implements automated system solutions for warehouses, distribution centres, and production facilities.  As part of its intralogistics solution, Dematic uses an industrial engineering approach to deliver process improvements, material flow automation and performance optimising software.

  • * The poll was conducted on Twitter between November 5 and 11, 2021, in the United Kingdom and Ireland and attracted 10,279 respondents.

Retailers: how to survive and thrive through a ‘pingdemic’

Posted on by Keith McKinley

Retailers have had it rough, to say the least. With Brexit and the pandemic causing a wave of uncertainty, brands saw themselves facing never before seen challenges. As a result, customer service teams and operational agility were pushed to their limits, picking up the pieces with frustrated customers due to supply chain and workforce shortages.

With thousands of front-line workers ‘pinged’ to self-isolate, the same problems of empty supermarket shelves, delayed deliveries, and stretched customer service teams we saw in the peak of March 2020, appeared once again. What first seemed like a viable solution to make people safer, soon had a damaging effect on the supply chain.

Now, with changes to the app made, the number of people ‘pinged’ has thankfully fallen, and policy updates mean that those double jabbed, no longer need to self-isolate. Despite this, the battle is far from won and retailers still need to emerge from these challenges in a more robust and agile position.

With brands setting the bar higher than ever before, COVID, Brexit and the ‘pingdemic’ are no longer excuses for a bad delivery experience. But what steps can retailers make to mitigate risk and protect the experience for their customers?

Step 1: automated tracking

Royal Mail recently reported disruption to deliveries in 12 different postcodes across the UK after a wave of staff were forced to self-isolate. With many other companies following suit, there was also another kind of wave – that being a surge of angry customers, without any knowledge of where their deliveries could be.

Ultimately, leading them to pick up the phone and ask ‘where is my order?’ to customer teams. If a customer’s delivery is going to be late, they want to know about it ahead of time rather than being the one to chase for updates – and this is where automated tracking can save the day.

Similar to fast Wi-Fi or running tap water, branded tracking should be basic hygiene. Yet in a recent study conducted by sorted.com, it was found that only 36% of retailers have branded tracking on their app or website, while 18% of retailers do not offer any tracking at all. With disruption always on the horizon, automated tracking is now crucial, especially when it comes to staying one step ahead of the customer.

With automated tracking, retailers can keep customers informed at every point of the delivery journey, meaning they know where their delivery or return is before they even need to ask. This is already doing wonders for some brands. MusicMagpie, for example, successfully slashed their “where is my order” contact enquiries by 63% after they incorporated automated tracking. In turn, this reduced the pressure on contact centres, all while protecting customer loyalty and confidence.

Step 2: ready for the unexpected

If retailers have less staff on the ground, those who can work need all the help they can get with automation. To drive the most efficient operations, brands need to be more informed with access to data. After all, a more informed business means a more successful one. Better informed CX teams leads to better support for customers, so accurate insights are vital for quick crisis management.

While the pandemic has been a case of unprecedented disruption, other unexpected factors (such as weather and traffic disruptions) are inevitable. No two days are ever the same in logistics. From a snowstorm to blocked motorways, anything can crop up so having the insight to act fast and make changes is critical.

This is why retailers must stay ahead of the game and be prepared to deal with any sudden issues to protect brand reputation and customer loyalty. To do so, delivery performance reporting can be incorporated to keep teams up to date with any problems or issues that can appear across multiple carriers. To be as proactive as possible, teams can set-up escalation management, such as alerts and warnings, to be notified of any missing or late parcels. With 1 out of 5 of customers less likely to shop with a retailer online again following a bad delivery experience, proactivity is therefore crucial to brand loyalty and customer satisfaction.

Step 3: better insight

No matter how prepared you may be, disruption is often inevitable, so customer service representatives must be ready to deal with any unpredictable issues. As such, it’s crucial for teams to be fully informed with access to any necessary data insights all in one place to offer quick solutions. For instance, with an interactive dashboard, teams can highlight any issues by severity, so prioritisation is clear. It’s bad enough for customers to be left in the dark, but for teams to be clueless about the status of a delivery or return too, will be self-destructive for a brand.

Even better, today’s digital age means customers can look up information on their own with ‘self-serve’. Rather than getting in touch with contact centres, customers can access the specific information they need, wherever they are in their post-purchase journey. This eases the pressure of customer service teams, allowing them to focus on more complex issues. With 73% of customers saying that valuing their time is the most important thing a company can do to provide them with good online customer service – self-serve provides an answer to your teams’ prayers.

The bottom line: be proactive

The past year has been a challenging time for retailers, but the ‘pingdemic’ won’t be the last of their problems. To be more prepared, brands must now adopt the right tech and be equipped with actionable insights to reduce the pressure on teams and deliver the best service possible.

Supply Chain risks to retail profitability

Posted on by David Priestman

In a thoughtful webinar today digital freight forwarder Zencargo co-Founder, Richard Fattal, and Bis Henderson‘s Louisa Hosegood debated the unprecedented pressures in the global supply chain this year and how they jeopardise retailer’s profitability.

There has been an undoubted change in consumer behaviour, including the acceleration of ecommerce uptake. Consumers remain fickle, increasingly conscious of their environmental footprint. They are evaluating purchasing needs and ethical choices. Omnichannel, where a consumer, for example, might buy online, collect in store and pick up another item there, then return something by mail. Reverse logistics and the management of returns has become even more important. Supply chains must therefore be flexible enough to manage this while maintaining prices, or profitability will fall. For example, cancellations of orders fall if long term lead time information is more detailed.

What is the expectation in each vertical or location? From a supply perspective disruptions have increased. Container spot prices are a record $14000 now (Far East to Europe). Airfreight availability is reduced due to lower belly capacity with fewer passenger jets flying. This volatility in delivery is likely to persist till late next year. New sourcing options are needed to maintain choice and increase efficiency. Retailers can only absorb some of the costs. Excess demand in the USA, combined with shipping and port handling capacity that cannot be increased quickly enough are also causing waves.

Some items are always price elastic and are expected to be in full supply at a low cost. Other products are more inelastic. Those SKUs can be re-worked over the short to medium term, making inventory changes to achieve agility.

Retailers should ask how risky their operating model is. There will always be a new challenge. Hope is not a strategy. It is important to co-ordinate teams internationally in supply chain management so that big decisions can be taken from a whole-business point of view. Own the total. Data then analysis then decisions.

Should retailers buy by price margin rather than just quality? The profitability of the route to market, holding and delivering, will lead to new KPIs. Teams such as purchasing and merchandising need aligning.

Online event: guarding retail profitability

Posted on by David Priestman

Retail margins are under increasing threat from soaring freight rates, poor carrier reliability and fluctuating demand. In response, Zencargo, the digital freight forwarder has announced a new online forum to analyse end-to-end retail profitability.

Scheduled for 14.00 BST (15.00 CET) on 12th August 2021, Guarding Profitability Through Disruption: The Retailer’s Guide is being delivered in collaboration with Louisa Hosegood, of global supply chain consultancy Bis Henderson, who formerly held senior logistic roles within Marks and Spencer and John Lewis.

The 45-minute online event comes in response to the unprecedented disruption in ocean and air freight that threatens the profitability, and even the survival, of many businesses. The event’s moderator, Zencargo co-founder and CCO Richard Fattal, explains: “The rules have completely changed, and every business needs to be keeping an eye on their bottom line profitability. It’s not just about logistics teams any more – finance, sales and data teams need to be working together to create joined up decision making that works for the whole business.

“The changes in logistics, commercial environment and social habits formed in the last 18 months will have long-lasting consequences. Consumers will be voting with their wallets based on new values, higher expectations and evolving ways of living and working. The businesses that can adapt to these changes are the ones that will be able to maintain and grow profits.”

The topics under discussion include:

  • Analysing and comparing the commercial environment of 2021 with recent years
  • Managing customer expectations through uncertainty
  • Calculating landed costs of goods in a volatile environment
  • Updating planning and execution strategies to maximise flexibility and profit

To read more about the webinar and to register, click here and save your place.

How retailers can beat Brexit difficulties

Posted on by Keith McKinley

Brexit may have been years in the making, but the uncertainty surrounding trade is still casting a long shadow for businesses in 2021, writes David Grimes, CEO of Sorted.

According to a recent survey, almost half (49%) of all UK businesses have found it more difficult to export to the EU since Brexit regulations came into effect. An increase in border checks and paperwork has only added friction to the process, making it more time consuming and costly for companies to send goods over to the continent.

Retailers in particular are facing a number of logistical challenges, including the delay of goods due to incorrect paperwork, or technical errors relating to tax declarations or item restrictions. These are disruptions that even the most prepared retailers could not have planned for, and many lacked the systems and technology to adequately deal with them.

In the weeks shortly after Brexit, some retailers such as John Lewis even suspended delivery into the EU altogether, citing new “complex processes” that were difficult to grapple with. Some couriers themselves also decided to pause road delivery services into the EU over concerns around paperwork and tariffs, adding to retailers’ problems.

Despite the impact Brexit turbulence is having on businesses, it’s important to remember that at the end of each delivery is a customer waiting patiently for an item they’ve paid for. With 1 in 3 customers saying they will leave a brand they love after just one bad experience, retailers need to up their game. To that end, the speed, condition and manner in which a purchase arrives, and the updates they receive during its journey, could have huge consequences on a customer’s decision to buy again with a brand.

Retailers, therefore, need to think very carefully about their supply chain model. With the post-Brexit delivery landscape still shrouded in relative uncertainty, pinning all hopes and expectations onto a single carrier service is bound to have unwelcomed consequences such as service failures, increased WISMO queries and a reduction in CSAT scores – all of which can severely damage a retailer’s brand.

The rise of multi-carrier shipping and distribution

In an effort to mitigate disruption, a growing number of retailers in the UK are already leveraging technology to manage and expedite multi-carrier delivery – enabling retailers to ‘spread the risk’ rather than have their entire operation depend on one single carrier service.

Instead of items being lost or returned because of one setback, a multi-carrier approach offers retailers the ability to adapt quickly to disruption and choose to re-route parcels via an alternative provider. At the very least, it gives retailers the opportunity to salvage the delivery journey to meet customer promise.

Brands such as Party Delights are using a multi-carrier approach to put the customer front and centre above all else, and to dramatically reduce the risk. If a carrier is unable to fulfil a delivery due to poor weather or problems with their fleet – or due to catastrophic disruption like we recently saw in the Suez Canal – an alternative carrier can pick up the pieces, ensuring CX is maintained. This is going to be a vital tool in an uncertain post-Brexit delivery landscape.

Preserving consumer trust and loyalty

This multi-carrier approach to order fulfilment might give retailers an edge when it comes to risk mitigation, but the challenges don’t stop there. UK ecommerce has always maintained a great dependence on the European market. Whether you’re selling a product to a buyer in Germany or importing merchandise all the way from Spain, the market in the pre-Brexit era was expanded for British retailers all over the European Union.

Now, Brexit has completely rewritten the rules and retailers all over the UK are experiencing the steady slowdown in terms of sales and revenue. As such, the online customer experience is in a state of near-constant evolution, with retailers and service providers are constantly ‘one-upping’ each other in their efforts to win and retain customers.

Over 43% of consumers are expected to shop more online than before the events of 2020, and if retailers are to take advantage of this influx of online shoppers they’ll need to offer a flawless customer experience. That includes paying close attention to each and every customer touchpoint, ensuring they have the infrastructure to cope with increased orders, and the capacity to adequately deal with any increase in customer queries.

An uptick in online purchases now means that the delivery journey is more crucial to the overall customer experience than ever before. Native online retailers – such as Amazon and Boohoo – have already had practice at getting this right and customer expectations are high, so retailers planning to move or increase their online presence will need to ensure their delivery journey is a 5* experience.

Customers expect real-time updates, messages, emails, delivery information, estimated times of arrival and more, including the ability to check on items, track packages and self-serve their queries. If retailers can leverage the automation technology needed to get this aspect of the customer journey right, they’ll see a marked improvement in CSAT scores and a massive reduction in call centre volume, easing the pressure on teams.

The importance of data integrity

An efficient multi-carrier operation with well-informed customers is only possible with clean, useful data. If a non-compliant parcel that lacks critical information is sent from a retailer to a carrier, it can throw up all kinds of unnecessary roadblocks at customs, particularly if the items are subject to strict regulation.

The seamless exchange of correct data in real-time is therefore essential in ensuring a smooth delivery process, even more so with exports thanks to the increased regulation around Brexit. Again, data integrity can be preserved with the use of technology, utilising everything, from validation codes, to mandatory fields, so the carriers get the correct information and border checks are as frictionless as possible.

Retailers of all shapes and sizes face a common challenge in the form of Brexit, but with the right technology in place and the adoption of a multi-carrier strategy, inevitable Brexit difficulties can at least be kept to a minimum.

The future of retail

Posted on by Keith McKinley

Kate Lester, founder and CEO of bespoke logistics solutions provider Diamond Logistics, offers a fearless opinion on the future of retail.

We can see light at the end of the tunnel. Shops are opening, but the reality is retail habits have changed forever. As a class A shopaholic, I will be first out of the blocks. But shopping habits have undoubtedly changed.

Some people will never go back to shopping the way they used to. The elderly, infirm or very time pressed. There is gold in these markets if you target them in a way that is attractive.

Commodities or specialist goods are perfect for online. Household product sites like www.webother.co.uk makes it very easy to order bulky and cost-effective goods direct to your home. Equally specialist goods – like www.SacredGin.co.uk – are easier to source online as there are very few stockists of this premium product.

It’s the stuff you want to try on, touch, feel or see – like furniture – that will drive retail moving forward.

For example, buying shoes online is very hit and miss, as is buying furniture. The look, feel and weight of shoes is a touch-based experience.

A lot of people like their Saturday food shopping – I can’t see this being eroded entirely – and substitution is annoying. But shopping at Waitrose for a few key products – and getting the bulk on Ocado – is a way of mixing modes of purchase and retaining the best bits for the consumer. And who wants to lug huge bags of shopping when you can get it delivered for £5? And, also, it’s those last-minute things – the capers and anchovies you decide you need for your dinner party – that your local delicatessen will always be strong at supplying.

There’s also a trend for convenience and local.  My grocery preference at the moment is Co-op or Sainsbury’s Local – with a weekend top-up at Waitrose and M&S – spreading the pounds dependant on need.

Big retailers

Retailers have to embrace multi-modal experiences – click & collect, home delivery and retail experiences.

Retail experiences will continue to be a thing, but it will be a big day out so they have to be fun and engaging. You won’t just pop to the shops; there will have to be further motivation. Ikea has this nailed, albeit their delivery items online aren’t great at present. (Ikea, if you need a hand, you know where we are!).

Ikea is a great day out. They not only showcase all their products in enviable showrooms so you can aspire to creating that space in your home, they offer a crèche and canteen – not to mention the inimitable meatballs – all of which make a great trip for the family.

Some key purchases will always be more aligned to a shop purchase. Car, furniture and carpet textiles for example, because the online experience is either slow (if you ask for samples and have to wait for them to be despatched for example). Whereas if you go to John Lewis Home, you can see, touch and feel your purchase on the same day.

There will be more showcasing in retail, whilst ordering will still be online. And customers will seek goods on multiple platforms – sale items on eBay and retailer sites with enhanced search facilities. It still staggers me that when you search for some standard items you can’t find them on Google search. Retailers have to really master their digital marketing to stay ahead.

Small retailers

Small retailers need to build their brand and a local following for a dedicated audience. They are going to have to drive loyalty to win custom.

Use multiple platforms and a united inventory system to enable customers to buy from you and use the power of these platforms’ search engines to drive sales. It’s more likely eBay and Etsy will pip them to the post, rather than their own SEO.

Utilise Google Shopping – it still gobsmacks me that it’s (mostly) cheap importers which have mastered this. Quality products are underrepresented.

Drive traffic through audience building on social – build that loyal base and push offers out which lead to a shop experience for upselling opportunities.

You still have to bat above your average in terms of delivery, shop experience or online (either own site or marketplace).

Experiential retail will drive customers, a day out not a pop to the shops. Other retail will become either a client loyalty-driver – small, boutique, specialist, local – or simply a showcase.

Keep up with consumer demand – driving faster and faster deliveries. Same-day fulfilment is just around the corner and this will be a great step forward on the multi-modal retail revolution.

SML launches high-performance RFID inlay

Posted on by Keith McKinley

SML RFID has today announced the latest addition to its range of high-performance RFID inlays, one of the market’s first UCode9 ARC certified inlay – GB3U9. Designed to support retailers with a wide spectrum of inventory management and customer experience use cases, the GB3U9 is equipped with the latest RFID chip from NXP, UCODE 9, enabling industry best read sensitivity, resulting in high quality and rapid inventory counting in dense RFID tag populations.

Available immediately, the SML GB3U9 provides a high-quality RF performance improvement for any given sector. The GB3 inlay offers a unique solution for the retail apparel, footwear, cosmetics, and electronic industries. Featuring a 3D orientation design, the inlay can be used for item management across various materials, including denim, poly bags, apparel tags, and boxed items, and its broadband design offers outstanding performance across worldwide regulations to support retailers as they manage items along the supply chain from source to store.

The inlay, like any of the SML inlays, can be converted into an adhesive label, integrated price ticket or a sew-in tag form factor to support every merchandizing strategy. SML has a family of U9 based inlays that will also be certified in the next few months, establishing the benchmark in inlay performance for the retail industry.

The GB3U9 inlay meets a number of ARC categories, including Spec N, Spec Q, Spec M, Spec G, Spec F, Spec L, Spec W1, Spec W2, Spec W3, Spec W4, Spec W5, Spec W6, Spec I, and Spec K. Set by Auburn University, the ARC categories are a set of industry-wide performance requirements needed to ensure that the RFID technology meets or exceeds a performance level that benefits both retailers and suppliers.

Dean Frew, Chief Technology Officer and Senior Vice President of RFID solutions at SML Group, said: “As adoption of Item-Level RFID in retailers of all types continues to see dramatic growth, technology innovation like this tag is one of the elements fuelling that adoption. Our tests in retail store environments show that our U9 family of tags can reduce handheld stock count time while achieving >98% inventory accuracy, greatly enhancing in-store and BOPIS inventory availability. The tag will also improve accuracy in numerous retailers’ supply chain scenarios such as reading high density packed cases of product in-tunnels and dock door use cases.”

Dr. Jeremy Liu, Vice President of RFID Technology, SML Group, commented: “SML global innovation centres fully brought out the capabilities of UCODE 9 chip. The advanced antenna design of GB3U9 showed a great balance between forward and reversed sensitivity. It enables the inlay to provide an exceptional solution to the modern retailer’s inventory management requirements. The compact antenna design, along with global frequency operation and omni-directional radiation capabilities, has created a versatile inlay that perfectly caters to the demands of today’s supply chain and in-store operations.”

Why omnichannel is Proving Key to Retailers’ Survival in the Digital First Era

Posted on by Keith McKinley

A series of challenges over the last year have brought with them a wealth of era-defining moments for retail. Within a brief and turbulent window of time, we have seen some of the biggest hallmarks of the changing retail landscape. Most notably, the already wavering high street was hit hard after accumulating lockdown measures, and Arcadia’s recent sell-offs to ASOS and Boohoo have proven major milestones in the ongoing shift towards a new breed of retail giant.

Of course, it hasn’t been smooth sailing for the online retailer either. The UK’s exit from the European Customs Union brought momentous logistical issues for businesses relying on shipping in and out of the EU. With customers on both sides of the channel suddenly faced with unexpected charges, many are returning products to avoid paying extra fees. The notoriously complex and expensive nature of reverse logistics has led many retailers to simply abandon the process altogether, with some retailers even threatening to burn returned products.

The message for retail throughout all these headlines is the same – do not put all your eggs in one basket. The time when brands could rely on a sole method of fulfilment is no longer viable within a constantly changing retail landscape. Retailers are beginning to realise that customer experience standards do not take a day off during a crisis. As such, it is becoming increasingly clear that future growth, especially during times of turbulence, will require brands to proactively invest in multifaceted omnichannel fulfilment models.

Reflecting on the recent peak season

The extra-ordinary circumstances of 2020 set the stage for one of the most challenging peak seasons yet. Namely, when coupled with the closure of non-essential stores, the increased online demand acted as a measuring stick for what approaches have been best suited to weathering the pandemic storm.

Recent research by PFS has shown that only 50% of retail businesses felt they were adequately prepared for the recent peak season, and more worryingly, 53% said they did not have enough internal resources to make the operational changes needed to be optimally prepared. This resulted in over one-in-six (17%) missing out on critical sales.

On the flip side, however, retailers that pre-emptively invested in omnichannel capabilities fared much better. Buy Online Pick-Up In-Store (BOPIS) initiatives, for example, proved to be a game-changer, with two-thirds of retailers (67%) who invested in this capability seeing an increased sales volume. Cementing this trend was curbside pickup, which led to the next strongest performance with 55% of retailers reporting increased sales.

Adapting to a digital-first era

Under the extraordinary circumstances of the most recent peak season, preparation proved invaluable in ensuring retailers were malleable to the rapidly changing consumer behaviours of 2020. These changes in consumer behaviours, however, are not limited to the pandemic.

PFS’s previous research found that, in addition to the 53% of consumers shopping more online since lockdown began, more than three quarters (77%) of consumers expect to continue purchasing online more once the lockdown is lifted.

For the brands that struggled to adapt during the peak season, this remains a daunting prospect moving forward. Alarmingly, despite the clear shift towards online purchases, 45% of retailers felt their technology stack was unprepared for the increase in peak online transactions. Following this, lack of visibility and supply issues remained a serious concern, with 53% of retailers admitting difficulty locating available inventory. All of this suggests an undeniable need for brands to invest and put emphasis on future delivery-times, stock replenishment and, ultimately, customer experience as they move forward into the forthcoming ‘digital-first’ era.

The urgent need to invest in hybrid future

Peak season was a wake-up call. Following what proved to be the eye of the storm for many brands keeping up with changing consumer behaviours, over a third (36%) of retailers are now planning to increase their investment in fulfilment capabilities as a result of peak season. Additionally, three-in-ten (30%) are looking to invest in curbside pick-up competences; 28% in ship from store capabilities; and almost a quarter (24%) in BOPIS.

The same research found that a startling 52% of retailers, however, are planning to outsource all or portions of their eCommerce operations, which is perhaps the biggest indicator of the current scope of demand on retail fulfilment capabilities.

While BOPIS and ship from store capabilities remain a key factor in adapting to consumer behaviours, particularly for retailers banking on the survival of the high-street, they don’t form the full picture by themselves. Consumers want to be able to access products online, in-store, and most importantly, now. Without a cohesive plan in place including inventory management and distributed order management (DOM) capabilities, brands will struggle to meet all of these unique demands at once, let alone meet the high standards of customer experience that come with them.

As the landscape becomes more difficult to anticipate, omnichannel investment and operational infrastructure will prove make or break for retailers in 2021. For both digital and brick and mortar retailers, a hybrid fulfilment approach to retailing will ensure not only survival, but growth. Not only will this enable retailers to inject value back into brick-and-mortar retail, but also keep up in a digital-first era.

By Christophe Pecoraro, Managing Director of PFS Europe

 

50% Spike in Demand for Retail Storage, says Shelving Specialist

Posted on by David Priestman

A surge in online shopping during lockdown has proved to be a shot in the arm for retail storage solutions. Racking and shelving specialist, Stanley, which has seen demand for storage solutions jump by a massive 50% in just nine months.

According to the Centre for Retail Research (CRR), 2020 was the most troubled period for the UK high street in over 25 years. Its research found that almost 16,000 stores closed their doors permanently due to the impact of Covid-19, which resulted in the loss of some 200,000 jobs, in what is the UK’s biggest private employment sector.

Whilst the lockdowns have dealt a devastating blow to high street footfall, there has been a surge in shopping from home. Booming online retail is expected to add well over £5bn to a total of £79bn e-commerce sales this year in the UK, according to analysts at Edge Retail Insight. A consequence of the huge shift to e-commerce has been correlative growth in demand for warehouse and retail storage space.

Analysis by real estate advisor, Knight Frank, indicates that the continued rise in online shopping could drive demand for an additional 92 million square feet of industrial storage space across the UK by 2024. Its examination of data over five years suggests that the spike in online sales in 2020, which required a further 30 million square feet of space, will increase to 92 million square feet over the next three years, as the trend towards online shopping accelerates, irrespective of the anticipated end to the pandemic.

According to Graham Sharp, Managing Director of Stanley, which manages the storage needs for a number of major household brands, the forced change in customer behaviour due to Covid-19 has put significant pressure on retailers to stock required items and be able to deliver the next day, in order to remain competitive:

“There’s no question that the pandemic has influenced consumer habits for the long term in how we browse and buy goods and services. This change has driven retailers to establish more distribution hubs, expand their stockholding and maximise space. Since the first lockdown in March, Stanley has seen a marked spike in demand for the supply and fit-out of racking, shelving and mobile space optimisation solutions. Revenues are up by over 50% and our order book is still growing. We expect this to continue throughout 2021 with the after effects of Brexit contributing to this, as businesses look at stockpiling goods to mitigate import delays and supply chain issues.”

In the rush for a bespoke retail storage solution, however, education of the customer in relation to ordering the most appropriate and safest option is also incredibly important, as Stuart Wallace, Stanley’s Head of Storage Division, explains:“There is still market confusion about racking and shelving with many businesses thinking it’s all the same, which of course it’s not. The fundamental difference is that with shelving, high turnover, lightweight goods are handled manually on a constant basis, whilst with racking, placement and retrieval normally relates to heavier unit loads, which require the use of fork-lift trucks or other mechanical equipment.”

Continued Wallace: “What can be overlooked in times of sudden growth is the fine detail in respect of health and safety. For example, it’s critical that every storage solution fulfils the necessary fire, load rating and operator safety compliance, through correct installation that’s fit for purpose. Stanley’s expert storage team has a combined experience of over 40 years in the industry, which ensures that our customers are covered by all the correct certifications and health and safety legislation.”

Looking Forward to an Innovative 2021 for Retail

Posted on by David Priestman

Edward Hutchison, Managing Director of BITO Storage Systems, applauds the UK Retail Sector for meeting 2020’s challenges and looks forward to supporting it through innovative intralogistics installations in 2021.

Retailers innovate to survive – but never more so than now, as the sector was challenged by the Covid-19 pandemic throughout 2020 and into 2021. As a significant supporter of the UK’s Retail Sector in terms of providing the order picking, storage and intralogistics solutions designed to make retail more efficient, BITO applauds the achievements of the retailers the have overcome these challenges and seized opportunities for future growth.

In addition to enforced closure of non-essential shops, pandemic restrictions have resulted in more people working from home and have accelerated the shift from the high street to shopping on the Internet and home delivery.  According to the latest ONS (Office for National Statistics) retail sales figures for Great Britain, 2020 saw the retail sector suffer its largest annual fall since records began of 1.9%. However, the amount spent in online retail sales increased by 46.1% when compared with 2019 as a whole. This represents the largest annual increase since 2008.

Retailers have been handling a surge in online order volumes, for broader mixes of SKUs and often with shorter lead times. This places enormous pressure on intralogistics operations to improve order-picking productivity. At BITO we are seeing a particular trend towards lower cost solutions to help improve fulfilment operations and meet the need for flexibility. These might include multi-tier shelving, adapting pallet racking for picking small items, installing live storage flow shelves to improve pick face density, investing in bins and containers for efficient storage and delivery, and adopting technology that allows staff to spend their time more productively picking orders – driverless internal transport to move goods from pick zones to the packaging area is a good example.

The Retail Sector’s response to the pandemic and the subsequent lockdowns and restrictions is inspiring and heroic. We anticipate working on numerous innovative order picking and storage solution designs in the coming year. We find that designing solutions to successfully overcome a specific operational challenge can often be transferred successfully to a broader base, thus driving a sector-wide uplift of service levels.

As the vaccination programme against Covid continues to roll out during 2021, we expect the economic bounce back to carry on. Shoppers will continue to enjoy the convenience of online retail and local stores but we also expect pent up demand will see shoppers returning to the high street as soon as allowed, where they will perhaps see new names and have new retail experiences.

Retailers will need to invest in intralogistics systems that help fulfil orders as efficiently as possible – either to retail stores or direct to consumer. They will seek systems that are efficient, reliable and have the flexibility to adapt easily to changing business circumstances and to meet peaks in demand. At BITO, we have a team of experts with a tremendous amount of experience in providing one stop shop intralogistics solutions for all kinds of retailers – whether it is for small-scale installations or large distribution centre integrations.

 

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