Automation is the key to online retail
24 July 2014
Automated handling equipment suppliers and the logistics professionals that will design, operate and maintain these systems have an absolutely critical role to play in online retail, says HSS Editor Simon Duddy.
As online retail takes a more prominent role, one of the more stark consequences for the retailers involved is erosion of margins. Online retail is price-driven, very competitive and fuflillment can be hellishly expensive.
ASOS is one of the key players but when you are forecasting profit margins of circa 6.5%, it doesn’t take much to throw things off course. Earlier this year, ASOS fell foul of currency fluctuations and had to tell shareholders it would more likely make profits of around 4.5%.
So what do retailers do about this? Do they increase prices? Not likely! They want to build volume as well as margin and rising prices would push customers to their competitors.
Therefore they must look at efficiencies and that’s where logistics and fuflillment come in. It is the prime area where the most impressive savings can be found. It you can pick and pack faster with fewer touches and fewer people, you’ll boost your margins. ASOS, with its massive investment in automated technology at its Barnsley DC is certainly making this bet.
This casts automated handling equipment suppliers and the logistics professionals that will design, operate and maintain these systems in an absolutely critical role.
In the July / August issue we looked at retail automation - exploring the cutting edge technologies that are helping to automate item picking, handling, storage and returns.
This is not technology for the sake of technology. In each case, real business benefit is sought and delivered.