It’s almost a cliché to begin industry articles by talking about how fast the industry is evolving. That doesn’t mean it’s not true. In the case of the retail sector, it really is one of the fastest moving and most dynamic industries on the planet, but it sometimes means the drivers behind that evolution can get overlooked.
If you ask Jamie Spencer, automation is one of the major drivers of change in the retail sector. As Vice President of Sales, EMEA, Ocado Intelligent Automation (OIA), he has had a front-row seat to the changes and trends shaping the industry today and some unique insights on the trends of tomorrow.
Supporting businesses in scaling up
“Consumers have come to expect next or same-day delivery of their shipments, yet not all companies, especially small and mid-sized brands, have the necessary infrastructure or supply chains built to meet that expectation,” he says.
“This creates an opportunity for us as solutions providers to help those small and mid-size brands meet consumer demands, by building a network that supports growth strategies, while at the same time maintaining profitability.
Despite being a well-established trend, automation is still rolling out exciting new innovations that retailers of all sizes can use to enhance their growth strategies.
“There is a growing interest in agile and flexible mobile robots,” Jamie continues. “They offer scalability and can be deployed quickly with little to no infrastructure changes. Companies can pay for most mobile robots via a service model. They can rent or lease them for a specific period of time to increase efficiency during seasonal peaks. This allows warehouses and fulfilment centres to invest less capital upfront while still having a strategy that is flexible upon seasonality and trends.”
Overcoming supply chain challenges
While not a new trend, automated solutions clearly still have a lot to give in all areas of the retail operation. This can help support businesses in an era of unprecedented supply chain disruption.
“Supply chain leaders recognise that their networks need to be far more diverse,” says Jamie. “And by diverse, I mean looking at how and where they source products, the technologies they use, and who they partner with. These decisions are critical because geopolitical factors can have adverse effects on the supply chain, and partners must be able to support the market changes.
“Depending on the product and industry, the playbook for de-risking supply chains can include buying more frequently, purchasing larger quantities, diversifying providers, and/or outsourcing locally, for instance.”
Ultimately, however, what matters most is getting the products into consumers’ baskets for an affordable price. Jamie adds that automation can support here too, saying, “Distribution strategists are tapping into last-mile delivery services to reach the brand’s end consumers without the need to build their own network. Click-and-collect, a delivery method where online shoppers select the designated location to collect their purchase, is becoming increasingly popular in European markets as companies seek to be more responsive locally and enhance the consumer experience. Statista reports that click-and-collect orders were worth 23.3 billion British pounds in 2022, and it forecasts the market to exceed 30 billion British pounds by the end of 2025.”
Maximising efficiency
This kind of growth will be necessary. Costs are rising across the board, and the struggle to maintain profitability in the face of persistent challenging conditions has made headlines across the retail industry press in recent years.
Emerging technologies can provide innovative solutions to new challenges, such as those posed by increased labour costs.“The increasing wage rates required to attract and retain labour are degrading suppliers’ profitability, especially in markets where margins are very small. Autonomous mobile robotics (AMRs) for picking and case handling are helping warehouse operators stay competitive and succeed,” explains Jamie.
“Consider third-party logistics providers. They generate revenue on every pick they make. The more efficient their picking process is, the more money they make during the contract period. Having AMRs guiding employees, travelling self-directed across the warehouse floor, and optimising picking paths boosts picking rates and translates into savings. NRI, a third-party fulfilment service, reduced the variable cost per unit pick by 12% using OIA’s Chuck AMRs.”
It’s impossible to discuss disruptive emerging technologies without discussing AI. Naturally, AI has a huge role to play in the future of retail, and it’s an area of keen
interest to Jamie and Ocado. “The moment warehouses have data in their hands, they can unleash AI to run predictive models. With AI, logistics leaders can understand demand ahead of time and build a solid fulfilment and supply chain strategy to meet it,” he says.
“Think of a retailer launching a new product. Using AI to examine past data, their supply chain team can forecast demand volumes weeks before a product launch and adapt warehouse operations accordingly. The data can provide insights to help determine whether it’s more productive to use an automation system or a manual workflow for a particular SKU.”
The future on show at IMHX
With talk of AI comes talk of the future. And the best place to experience the future of retail logistics is at IMHX, the UK’s largest logistics event. OIA will be one of over 300 exhibitors at this year’s event – so what do they have in store for attendees?
“This year, my teammates from OIA will be at the conference showcasing our Chuck AMR,” concludes Jamie. “Chuck combines fulfilment execution software with autonomous mobile robot technology to support warehouses with mid and low throughput, reduce the cost per unit shipped, and fulfill orders faster. It has been deployed in over 100 warehouses worldwide, saving companies 60% in labour costs, doubling pick rates, and reducing missed picks by 90%.
“We love the show because it’s an opportunity to connect face-to-face with other people who appreciate powerful innovation. We meet new people, brainstorm, and inspire each other to try new things.”
IMHX visitors can find OIA at booth A37 between 9-11 September at the Birmingham NEC. To register for a free ticket, visit www.imhx.net today.
