The automation of logistics and picking is currently the key to meeting the needs of increasingly demanding consumers who purchase ever more online.
The continuous increase in the demand for home deliveries or in-store pickup of Mass Market Retailer products – especially in the USA and Europe – can hit limits, such as compliance with delivery times: this has highlighted how traditional manual picking methods do not meet market needs, particularly in terms of efficiency and speed. In addition, this increase in demand poses additional challenges for inventory management, increases operating costs and can negatively impact the shopping experience of customers when they have to wait in line to collect their orders from in-store lockers.
For this reason, in the mass market retail sector logistics solutions are being developed based on automatic storage systems and automatic picking systems for order preparation, with the adoption of best practices and technologies already widely used in large distribution and logistics hubs.
Omnichannel strategies in the Mass Market Retail sector and their impact on logistics
Today, grocery retailers are expected to be present on the market both online and offline, as consumers visit both physical and online stores. Therefore, focusing on omnichannel retail means identifying methods for the creation of connected systems through which physical and digital channels can share information. In this way, customers are offered consistent shopping experiences across the board.
Delays between these two channels can generate a gap, known as a “convenience gap”, between the retailer and the consumer, between expectations and reality, which may limit the use of online shopping. At a time when consumers are ready for this new way of shopping (a McKinsey report indicates that e-grocery in the US could account for 10% of the total grocery turnover by 2025 thanks to the development of the omnichannel approach), omnichannel strategies are essential to reduce the gap and offer a series of benefits to both customers and retailers:
Omnichannel inventory
he creation of an inventory system that controls the flow of products between stores, distribution hubs and home deliveries in real time enables retailers to monitor stock and promptly inform customers about the availability of any given product.
Combined online-offline purchases
customers feel the need to buy certain products in person, for example fruit, vegetables and fresh products. A description, albeit detailed, in an e-commerce website, in fact, cannot be sufficient to replace an in-person evaluation of a cut of meat or of the state of the fruit available. An omnichannel approach also offers customers both choice and flexibility: they will be able to buy packaged and durable products online and have them delivered at home, while picking up fresh products in the store.
Smart supply chain
a multichannel system enables retailers to build smart supply chains, synchronized across all channels, which increases overall efficiency. Customers will be able to use all channels with the same level of satisfaction while the retailer will increasingly gain control over product flows and have access to more information on the preferences of end customers.
This profound change in the world of Mass Market Retailers certainly affects also the related logistics which, with the development of e-grocery, is undergoing – and will continue to undergo – significant organizational changes that involve a necessary strengthening and broadening of the entire infrastructure.
So let’s take a look at how e-grocery is driving innovation in logistics, which is increasingly supported by automation and automated picking systems.
The development of e-grocery and how it has been affected by the pandemic
There is no doubt that the grocery sector has faced significant challenges in the last few years and that the Covid-19 pandemic with the consequent surge in e-commerce has further driven the revolution already underway. According to the report prepared by Osservatorio Netcomm del Politecnico di Milano, in 2021 the online shopping of Food&Grocery has increased by 38% compared to 2020.
As a result, the players in the sector need to reorganize their operations and start implementing automated and innovative solutions in order to remain competitive and keep pace with a new purchasing paradigm, increasingly digital or hybrid.
The two most common solutions offered by Mass Market Retailers and exploited by consumers are BOPIS and BOSS. In both scenarios, BOPIS and BOSS, the retailer who fails to deliver a quality experience risks disappointing its customers, who will not only avoid using the same purchasing method again but may also decide to avoid that retailer altogether. Keeping customers updated and making their shopping experience as smooth as possible is critical to success.
The transition to online shopping and the adoption of an omnichannel strategy also involve the reorganization and adaptation of warehouses. In this context, Micro (or Urban) Fulfillment Centers (MFC), small logistic hubs distributed throughout an area, were created precisely to meet the growing needs of the e-grocery sector. They are equipped with automatic storage and order preparation systems, making micro fulfillment a winning strategy for both order management and quick deliveries.
E-grocery automation segmentation and Modula as a supplier of Material Handling Equipment (MHE)
The e-grocery sector can benefit from automation essentially from 3 points of view:
- MHE (Material Handling Equipment) – the management of materials
- Software – online ordering apps, for example
- Delivery – lockers, last mile solutions, etc.
Thanks to its automatic vertical storage solutions, Modula is now a point of reference internationally as a supplier of MHE for MFCs and the like, where the use of high-tech automatic systems and space optimization are always critical.
The importance of space in storage systems
Micro fulfillment is based on automatic storage systems and picking robots that can also be installed in small warehouses, where they still make it possible to fulfill thousands of orders a week.
Modula automatic vertical storage systems are a highly effective solution because they simultaneously maximize the use of space and speed up the picking phase, guaranteeing a reduction in costs in terms of storage area and transport.
The 4 advantages of the solutions developed by Modula for e-grocery
Modula offers solutions that respond optimally to the new needs of Mass Market Retailers and e-grocery. Modula storage systems are:
Modular
Among Modula’s products for logistics there certainly is the ideal solution for the surface of any logistics hub. Our automatic storage systems are modular and customizable, enabling these solutions to grow together with your business.
Easy to combine with automatic picking systems
Modula vertical storage systems are installed in just one week and can be easily integrated with the customer’s ERP systems. The Modula WMS software application is simple and intuitive.
Easy to combine with automatic picking system
Modula automatic storage systems can be easily integrated with MHE systems, independently of whether they are Modula picking solutions or not. Modula guarantees a fast and efficient picking management system, capable of adapting even to intense work peaks.
Perfect for the management of fresh and dry food products
Modula automatic storage systems are also available in a controlled temperature version (Modula Climate Control). In this version, Modula Lift maintains the cold chain as it is able to operate in a temperature range from 2°C to 25°C (± 1°C), with a maximum humidity of 50%.
To learn more about how logistics automation can enhance e-commerce, overcoming the obstacles and difficulties that characterize warehouse management, download our in-depth analysis.
Automation: the way forward to manage e-commerce logistics
