Contrary to popular belief, food is actually one of the hardest e-commerce sectors in which to turn a profit. Consumers have become so used to increased service levels (such as same-day and/or free delivery) in diverse areas such as fashion and electronics that they expect similar promises when it comes to food e-commerce.
Despite growth rates of up to 40% globally, we’re still hearing about a multitude of operational challenges that continue to impact on profitability for food e-com retailers. So, given that many have had to increase capacity at such short notice, how do they manage this in an efficient way?
Dynamic changes in market maturity are now forcing retailers to think long and hard about their service proposition towards the consumer, in terms of assortment, delivery times and even ‘last-mile’ coverage. At the same time, retailers see new entrants challenging them on ultra-fast grocery delivery services, which further increases pressure.
Most food retailers do agree that increased automation is the only realistic long-term solution for their e-com activities. However, there are still high levels of uncertainty – and many questions – about exactly when to commit, and what the ideal balance should be between manual and automated operations.
So, what kind of solution will live up to the promises that they want to make to their customers? How does the solution guarantee the required levels of speed and productivity? And how can the solution itself be further scaled up as conditions and demand fluctuate?
At Vanderlande, we’re well aware that the pressure on margins is greater than ever and labour is scarce in almost all of the markets we operate in. Therefore, what are we doing as a systems integrator to provide our customers with efficient future-proof solutions to match their business needs in a changing landscape?
For starters, we’ve changed our way of working to help retailers on their journey towards automation. By developing solutions, called “evolutions”, comprised of so-called ‘functional modules’ we are able to offer true end-to-end systems that are based on flexible and scalable building blocks. This can help food retailers achieve improved performance, high picking efficiencies and long-term profitability whatever their size of operation – from micro-fulfilment to large-scale networks.
In the next blogs we’ll be going into detail about how retailers need to act quickly or risk getting left behind during these uncertain times – and how together with our customers, we are able to create insights into how automation contributes to a solid business case.
We’ll also discuss the importance of end-to-end solutions and explain the different phases of the journey towards automation. And then, once automated fulfilment is installed, we’ll describe the vital role that effective service and maintenance plays in ensuring you stay in control and ahead of the competition.
There’ll be an explanation of the importance of migration paths that start with low-mechanised solutions, and can be easily scaled up as and when required. And we’ll also discuss how to maintain a stable workforce – a vital piece of the jigsaw, even in highly automated operations – with efficient ergonomic solutions that consider the wellbeing of employees.
While the future of this constantly changing landscape is still uncertain, rest assured that Vanderlande will continue to work in partnership with retailers to tackle all the challenges facing food e-commerce operations.
Next blog: Food e-com – making the business case for investment
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