GUIDE TO FULFILMENT
2018
-Key fulfilment considerations -Impact of returns -Inventory management
-Fulfilment trends -Warehousing automation -Future of logistics
GUIDE TO FULFILMENT 2018 CONTENTS Key issues to consider when choosing a fulfilment company
4
The impact of customer returns on UK retailers
8
Ecommerce returns: minimise lost profits & maximise satisfaction
14
Click & collect: how long is too long?
18
2018 fulfilment: preparing for the next rush
22
Order fulfilment reflects shift in shopping habits
26
Driverless lorries and the future of logistics
30
Modernising your warehouse space: saving time and money
37
CREDITS Editor: Rob Gamage - rob@modernretail.co.uk Advertising: Emma Mjekiqi - emma@modernretail.co.uk Production: Charlotte Lynch - charlotte@modernretail.co.uk
Front cover image: Jonathan Weiss / Shutterstock.com Modern Retail is published by Ricochet Media Services Ltd (Registered Company: 6043446). Unit 1b, Building 6, Croxley Green Business Park, Watford, WD18 8YH.
THANKS Many thanks to all those who provided editorial content or images for helping us put together what we hope is a useful and informative read! Please send any comments or suggestions to rob@modernretail.co.uk.
KEY ISSUES TO CONSIDER WHEN CHOOSING A FULFILMENT COMPANY
Insights
+Independent retailers in the UK should look for fulfilment companies that have industry-specific experience and are a good fit for their business. +Before selecting a fulfilment partner, small businesses should thoroughly vet the options and see what each can offer in terms of an overall fulfilment package. +When choosing a fulfillment company, retailers should consider how and what innovative technologies are being used by the provider, such as robotics. Overview When choosing a fulfilment company in the UK, small and independent retailers should consider a provider that is a specialist in their industry or market sector and that works with, or has worked with, similar clients. Moreover, these businesses should focus on selecting the provider that is the best fit overall, rather than just the cheapest option, and they should be sure to thoroughly vet each company before making a decision. Lastly, businesses should look for a fulfilment partner that offers flexible options and that can grow with the business, and should consider providers using the most innovative technology. Key Factors UK fulfilment company Fulfilment Logistics have highlighted some key areas that can help to find the right partner for your business: 1. Choose a provider that is a specialist within your industry. There are clear advantages if you can find a provider that has expertise in their industry and retailers will benefit when their provider has knowledge and experience that is industry-specific.
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2. Choose a provider with similar clients. This is an another important factor to consider because the experience brought to the table by a provider with other similar clients can be invaluable. They will know how to handle the specific situations and concerns of the business. 3. Don’t just go for the cheapest option . While price is one consideration, it is crucial to consider that there are many other factors besides just price. Finding a provider that is a good fit can be far more important and may even be more cost-effective in the long term. A low-quality provider, or one that is not a good fit, may end up losing customers or damaging brand reputation. 4. Don’t rush into making a decision. Thoroughly vet potential providers before committing to a decision, ensuring you ask questions and seek references. Retailers who are new to using a fulfilment company should look for providers that can offer flexibility, reliability, and customization in their service package. This step is key, as it can be costly and time-consuming to change providers when the first choice doesn't work out.
Consider technology Industry experts believe robots could play a huge part in the future of fulfilment, and Amazon is infamous for using robots as part of its UK fulfilment operations. According to Vend, as of 2017 Amazon had robots in 20% of its fulfilment centres, using 30,000 robots in total. By investing in technology Amazon has been able to make fulfilment more cost-friendly and time-effective and the brand is now renowned for speedy and efficient delivery. The company claims the use of robots has saved them $22 million for each fulfilment centre in which they've been utilised. It is clear, therefore, that choosing a provider who is keeping up with the most innovative technology will ensure retailers can stay competitive with their fulfilment operations. Look for a flexible solution This factor is especially important for small or growth retailers. A provider that can offer flexibility can be a big advantage for seasonal businesses, enabling them to scale up with additional space and services during peak times, and then scale down in the off-season. Conclusion Independent retailers in the UK should consider many factors when choosing a fulfilment service: looking for providers with relevant clients and/or industry experience; thoroughly vetting all options before deciding; finding a provider with the flexibility to scale; and looking at what innovative technology is being used by the provider. Research for this article was provided by askwonder.com . Author: Rob Gamage Rob Gamage is Managing Editor of Modern Retail. Combining many years of experience in publishing with a keen interest in small business and entrepreneurialism, Rob is passionate about sharing interesting and inspiring content with retailers to help them grow. You can subscribe to Modern Retail, for free, here.
THE IMPACT OF CUSTOMER RETURNS ON UK RETAILERS
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57% of retailers in the UK have experienced negative effects because of the growing amount of people that are quick to return items they’ve bought online.Retail independents and SMEs in particular can struggle with various aspects of customer returns, all of which can impact negatively on revenues and business operations. The main reasons for this trend are: increased online sales, customers abusing return policies, costs of processing returns and large chains who offer free returns putting pressure on SMEs to match that in order to stay competitive. Return statistics Barclaycard research recently highlighted in the Guardian showed that 57% of retailers in the UK experience negative effects because of the growing amount of people that return the items they bought online: "Online-only businesses were hit the hardest, with 31% saying that managing returns was affecting their profit margins. One in five businesses admitted to upping their prices to cover the cost of returns". Additionally, 52% of SMEs admits that dealing with returns negatively affects the day-to-day running of their company and they said they’re "often left looking for ways to make up the revenue difference." Additional stats from Barclaycard show that in the last year an increasing amount of returns has created numerous challenges for online retailers, with 31% saying that handling the returns actually impacts on their profit margin. Moreover, 30% of online shoppers admit that they "deliberately over-purchase and subsequently return unwanted items", with 19% saying they are guilty of "ordering multiple versions of the same item to make up their mind at home — safe in the knowledge they can choose from the ever-growing number of ways to quickly and easily send items back, such as hourly courier services and local drop-off points."
Small retailers opting not to sell online The problem of unsustainable costs has reached such proportions for SMEs that some small businesses are stepping away from offering their items online. According to Barclaycard, 22% of small retailers that hold bricks and mortar stores have decided not to sell online as they are too concerned about how they would handle the costs of dealing with returns. Not accepting returns According to Armstrong Watson, some retailers are introducing a no-return policy where they are "offering price reductions in lieu of their return rights," in order not to be faced with managing returns and their associated costs. Agreements with suppliers Russell Grant, an SME consultant at online support network Business Doctors, recently told The Telegraph that by creating a proper agreement with suppliers, handling returns can turn into an effective process: “That means a commitment to compensate the business for all costs, including the product, transport, labour, admin and so on — [anything] associated with the return of products that they have supplied. This will enable SMEs to act quickly in the full knowledge that they will be fairly compensated by their supplier.” On top of that, Grant insists that SMEs should be able to offer return policies that are very clear and based on research. Additionally, having the proper resources required to deliver returns is very important, which of course includes logistics and customer service. Wise use of data The rise of serial returners has led some smaller retailers to target these customers in order to avoid their further purchases and minimize their own financial damage. Derek O’Carroll, chief executive of retail management platform Brightpearl, suggested to The Telegraph that SMEs explore their "existing sales data to pinpoint customers with a greater propensity to return items, and avoid targeting them with marketing promotions or discounts". Additionally, data can also be analysed to understand what products have higher return rates and see if prices can be raised on these products, stop marketing efforts involving these products, or even stop selling them all together. This can have the additional bonus of improving customer satisfaction and brand perception. Finding satisfactory solutions by communicating with customers Andrew James, a UK homeware brand, noted that dealing with returns demands maintaining a healthy relationship with customers. Graeme Coyle, the company's marketing manager, explained that the business recently changed its returns policy in order to lower the number of people who regularly send back products, and the return process "now challenges them more vigorously about the nature of their returns."
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Coyle adds: “Now we request proof that the item, if electrical, has had the power cord cut, so it’s unable to be used again. Only then will we issue the refund or replacement.” Additionally, the brand listens to customers who are not satisfied with this process and tries to find a solution that can be satisfying for everybody: "To ensure repeat custom, shoppers should be happy with any contact that they’ve had with the company — and feel confident about buying again". The case of Black Friday The runaway phenomenon that is Black Friday has exacerbated the problem of returns. Experian-IMRG reported that UK retailers could incur costs of £180 million from consumers returning items they purchased through Black Friday sales, as almost 40% of all items bought online during the sale period are returned. In 2016, a staggering £1.23 billion was spent on online purchases in the UK during the Black Friday period. How to lower the return rate Small and medium online businesses are always looking for ways to lower the return rate. According to Barclaycard, 38% of online shoppers said they would send back fewer items if businesses were offering standardized clothing and shoe sizes, which still vary a lot between different retailers. Additionally, 18% acknowledged that if businesses offer "a better in-store experience, such as shortened queues for fitting rooms so they can try on sizes without the wait", this would also reduce the overall number of items they return as some people come to try on clothes before going online and purchasing them. 18% also proposed that retailers "introduce technology to help them better visualize an item when shopping online, such as the ability to ‘try on’ clothing after uploading an image of themselves". Conclusion 57% of retailers in the UK experience negative effects because of the growing amount of people that return the items they buy online. 31% of SMEs admitted that handling the returns actually impacted their profit margin. Retailers can deal with this by opting not to sell online, not accepting returns and instead offering price reductions, strengthening their agreements with suppliers, analysing data to understand what customers return the most and what products are returned most often, and restricting rules for what is accepted as a return. Research for this article was provided by askwonder.com . Author: Rob Gamage Rob Gamage is Managing Editor of Modern Retail. Combining many years of experience in publishing with a keen interest in small business and entrepreneurialism, Rob is passionate about sharing interesting and inspiring content with retailers to help them grow. You can subscribe to Modern Retail, for free, here.
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ECOMMERCE RETURNS: MINIMISE LOST PROFITS & MAXIMISE CUSTOMER SATISFACTION
Online retailing has expanded rapidly and the growth of the internet and advancements in delivery capabilities has seen many small businesses take advantage of this, selling through online marketplaces to maximise their reach. These global marketplaces are predicted to own 39% of the online retail market by 2020. On the surface, this approach is perfect for consumers, who can easily shop from their favourite retailers all in one place. However, underneath, retailers are faced with the difficult and sizeable task of managing deliveries and returns efficiently - and at a low cost. For while more marketplace exposure means more sales, it also equals more returns; made even more complex by the requirement to offer return policies as designated by each marketplace. For example, Amazon now requires third-party sellers to accept “automatically authorised returns”. This means retailers must accept returns without having any direct contact with the customer, exactly at the point when many businesses try to resolve customer issues to preclude returns. There are, however, ways to improve the control of online returns in the face of changing customer expectations and marketplace practices, which are critical in this competitive environment. Understanding how best to manage product returns to reduce costs and maximise efficiency is key, and as disappointed gift recipients are busy returning their unwanted merchandise, here are four strategies online retailers can use to tighten the returns process: 1. Return policies must be a forethought. Marketplace policy changes give retailers the opportunity to rethink how they handle returns. According to recent research from Royal Mail, nearly half of shoppers (47%) said they would be
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unlikely to shop with a retailer again if it charged for returns, and 60% would be less likely to shop with them again following a difficult returns experience. Clearly a well thought out returns policy is critical to good customer relations. Sellers need to decide whether to offer one return policy - for example, Amazon’s - or different policies for each marketplace/channel or for various product offerings (for example: low-end versus high end). Some businesses set policies based on the most generous marketplace policy. If sellers choose an “Amazon-style” return policy with instant returns and free shipping, this can be promoted up front as part of a company’s brand. Unmistakably, a simple online returns process helps drive sales and cement customer loyalty - and overlooking the impact of a poorly considered returns opportunity can be costly. 2. A free returns policy might not always work. Returns can have a big financial impact on profits. Depending on the industry, return rates can be very low or very high. Book and video returns can run two / three per cent, while clothing and jewellery can run upwards of 30 per cent. Companies should right-size return policies based on industry standards and actual return rates. Businesses with healthy profit margins can build the cost of returns into a product’s price. Charging restocking fees or not accepting online returns is less common but, for certain products or industries, it makes financial sense. For example, companies selling new laptops might find a restocking fee may be the only way to support thin margins. Likewise, for clothing subscription services a restocking fee for returns makes sense, since the items are essentially specifically tailored for an individual. Evaluating whether the return policy of a particular marketplace works is therefore a critical part of the business decision to sign up to the marketplace in the first instance. 3. Sellers should right-size returns automation based on business needs. Retailers with high return rates may need a great deal of automation. Small businesses with fewer returns can often manage them in-house using cloud-based shipping solutions that simplify printing or electronically creating return postage labels that customers print themselves. Barcodes on labels quickly identify customer records and product numbers to speed the return process, cut down on errors and save time. Integrating with internal systems is important for large retail operations with high return volumes. Returned packages sitting on the warehouse floor cannot be effectively put back into stock without the right system in place. Connectivity must flow from the customer to the warehouse to the shipper into marketing, sales and accounting. For companies with few internal fulfilment resources, a third-party processing service can help. Merchants need to weigh the benefit versus the cost of using fulfilment and returns processing by marketplaces or third-parties. Another way to manage returns if there aren’t in-house resources is to monetise returns by sending returned merchandise directly to a reverse logistics partner that liquidates inventory.
4. Returns cut into profits so minimising them is important. Good customer service helps avoid unnecessary returns by solving a customer’s problem with support, rapidly replacing missing/damaged items or making exchanges. But, heading off an unnecessary return is hard when marketplaces allow automated returns with no merchant contact. To combat this, sellers should use “scan based” return labels when possible. With these labels, the retailer is only charged if the label is used. Some retailers report that 10 percent or more of the requested returns are never actually sent in, making scan based return labels an instant money saver. Providing customers with current, accurate product information is also important. By connecting ecommerce marketplaces to internal order status, pricing and inventory processes, customers know if a product is in stock and when it will ship. Detailed product descriptions and quality images help to avoid misunderstandings. Customer feedback/review functions provide even more information to support making the right choice. Finally, it’s useful to track which products are returned and why. Develop a “reason for returns” report by manufacturer and SKU. This allows vendors to troubleshoot and avoid future returns. Changes in return policies by Amazon and other marketplaces are an opportunity for ecommerce businesses to take charge of returns. Online sellers can use this as a chance to create better customer communication and loyalty, whilst addressing how returns affect the bottom line and streamline logistics. Author: Andrew Tavener, Head of Marketing, Descartes Andrew Tavener is a results-driven and customer focused, B2B senior marketing manager. As Head of Marketing at Descartes UK, he is an integral member of the team supporting transport operators and other organisations in their adoption of software solutions to improve performance, visibility, compliance and security in logistics and supply chain operations.
CLICK & COLLECT: HOW LONG IS TOO LONG?
Click and Collect has fast become an integral part of the shopping experience. According to research undertaken for Quail Digital, nearly a third of people prefer Click and Collect over home delivery. But while retailers are revelling in the chance to get customers back in store, how much do we enjoy it? Are consumers really buying in to the Click and Collect experience? When 47% of UK consumers waited more than five minutes for their last Click and Collect order, is it just the lesser of two evils? Tom Downes, CEO of Quail Digital, calls on retailers to make a three minute Click and Collect pledge. No Win Standing in queues may be a national pastime, but the whole concept of Click and Collect is about speed, about convenience. We opt to pick a pre-ordered product up in store rather than endure the frustrating wait for the delivery driver or having to slowly trawl round around a store to locate a specific product – only to find it is out of stock. To be then faced with a monumental queue servicing not only Click and Collect customers but every other customer – from the person returning ten items, to the individual more interested in sharing stories than paying – can be unbelievably frustrating.
If retailers want to meet customer expectations for Click and Collect and maximise the value of getting these individuals back in store they need to rethink the process. The number one priority has to be speed. Whilst 70% of customers consider it fast service if it takes them five minutes or less to collect their order, just 42% have their expectations met. Just consider how customers will respond if a retailer promises to fulfil every Click and Collect order within three minutes. The dasher can confidently be in and out without missing too much of the lunch hour. The browser can afford to spend five or ten minutes looking around before picking up the ordered items, with no fear of delay. And those customers who want to try on the Click and Collect items have more time to chat to the Store Associate, consider accessories, and swap one item for another. The retailer can fulfil both the initial order and the up-selling vision. Speed and Consistency The key to realising this vision is better in store communication, a way to manage the peaks and troughs of Click and Collect demand efficiently and effectively. Rather than expecting customers to join the standard sales queue, create a dedicated Click and Collect experience. When customers arrive in store they use a QR code or reference number at a kiosk or post by the door which creates a ‘customer arrived’ message for staff wearing a headset. This prompts staff and managers to co-ordinate an immediate response – with one individual sent to the storage location where a collection screen displays the customer’s name, order reference and time of arrival. The order it picked, the call screen closed and the package delivered to the waiting customer. The process is fast and efficient for both the customer and the retailer. It is consistent, giving customers confidence for future Click & Collect orders; and it allows the retailer to effectively manage this new channel with the existing in store resources. Critically, it enables that three minute pledge. Meaning that retailers can ensure customers have more time to spend in store browsing and chatting with Store Associates – and far less time grumbling in a queue.
Author: Tom Downes, Founder and CEO, Quail Digital Tom Downes is the Founder and CEO of Quail Digital, a manufacturer of high quality digital headsets for use in retail, healthcare and drive thru restaurants around the world. Visit http://www.quaildigital.com/ for more info.
2018 FULFILMENT: PREPARING FOR THE NEXT RUSH
Outsourcing fulfilment can help streamline business processes and deliver a better service for customers, potentially reducing the need to employ seasonal staff and can relieve stress over the busy period. However, it doesn’t just stop with excellent fulfilment services. Exact Abacus – fulfilment and technology specialists – provide their advice on the latest technological advancements that will impact fulfilment and e-commerce. There’s plenty of hype around drone deliveries and warehouse robotics but this article will concentrate on things that will become ‘hot’ for small online retailers, trends that may have already been adopted by some of the larger online organisations. Need for speed Increasing consumer demand and larger organisations adopting next day delivery will place a greater pressure on smaller online retailers. Speed, convenience and accuracy now define a consumer’s shopping experience. In 2018, same day delivery will take a step up and become the new norm as consumers begin to expect real-time information around product availability, shipping and inventory counts. This means smaller online business will need to utilise real-time management information driving a slicker customer journey.
Integration and omnichannel consistency Customers expect to buy seamlessly and interact across channels, using different devices. Whilst many online retailers have a strong presence on multiple channels, they must achieve efficient integration. Again, this comes back to efficiencies in real-time information and presenting this to the consumer in a simple and easy to digest format that is consistent across all selling platforms. This trend will grow dramatically in 2018 with the advancement of technology and the possibilities of personalisation. Messenger apps and chatbots The chatbot trend has already developed at a pace in 2017 providing an instant connection with customers on a 24/7 basis. The quickest adopters of this technology are millennials and this is another step in the direction of personalisation, suggested content and special offers. With over 1.2 billion people on Facebook messenger every month, e-retailers can expect huge engagement rates. This trend will be adopted by many more organisations in 2018. Whiteglove fulfilment continues to grow More online retailers are selling premium and delicate products online that require extra care during the fulfilment process. Whiteglove fulfilment is becoming increasingly popular with the growth in consumer demand for purchasing luxury goods online. Finding a fulfilment partner that can provide this service will increase customer satisfaction and loyalty as the business is providing an excellent delivery service for high value items. Seller fulfilled Prime programme by Amazon Amazon has recently launched their seller fulfilled programme, allowing businesses selling via Amazon to gain Prime status offering next day delivery via third party logistics or in their own warehouse. Online retailers are being selected to go through Amazon’s trial to become an exclusive Seller Fulfilled Prime member. This will be huge trend in 2018 as more retailers get on board. Testing involves dispatching 100 packages to 100% service level over a five day period to ensure that only quality online retailers with capacity can become a Prime accredited seller. The Brexit effect There’s very much a sense of uncertainty for the retail e-commerce industry and this may mean that SMEs want to run a tight ship in preparation of the official Brexit date.
The European Union (EU) is Britain’s largest trading partner, while western European markets account for more than 50% of the export market for online businesses, potentially putting a strain on the bottom line. During the last recession, it was gym memberships and coffee that went out of the window. However, it is expected that Brexit will affect the larger ticket items, such as clothes and larger purchases as people in the last 10 years place more value in the fitness and wellness industry. This is likely to further the demand of leisure type products in the form of subscription box services. As competition in this market grows, brands will heavily rely on their fulfilment partners to create a special brand experience for customers every month.
Author: Exact Abacus For more information on fulfilment and preparing for the next online rush, please visit www.exactabacus.com.
ORDER FULFILMENT REFLECTS SHIFT IN SHOPPING HABITS
The UK’s shoppers have changed their habits when it comes to shopping. That’s the evidence of figures from the National Office of Statistics (ONS) and it is reflected in the volume of fulfilment services we processed during the peak Christmas period at the end of 2017. The days of leaving your present buying to the last minute, or at least until the first window of the advent calendar has been opened, are gone. Figures from the ONS show that retail volumes fell by 1.5% from November 2017 to December. In a year that showed the lowest growth since 2013 (1.9%), this was bad news for high street retailers hoping for a bumper Christmas, but for those savvy enough to respond to the trends of the last few years, there were reasons to be cheerful. Black Friday (24 November last year) has driven retail volume from December back into November. But consumer focus is no longer just on Black Friday itself, or the following Cyber Monday. As retailers vie to leverage maximum advantage from the Black Friday concept, juicy discounts are appearing earlier and earlier in the month and running on for several days after the event. Black Monday has become Black Fortnight. According to the 2017 Retail Survey from KPMG, less than half (44%) of Black Friday sales were made on the Friday itself. A similar volume of sales (45%) took place in the 10 days either side of Black Friday, with a further 11% made outside that period. Online sales: a different story for fulfilment services Despite the increased focus on the Black Friday period, retail sales volumes for November increased by just 1.6% year on year, and 1.4% for December. But it’s a very different story when it comes to online sales. In this sector November sales were up 10.2% year on year and
December sales were up 9.4%. Among the best performers in this sector, according to the ONS, were sales of clothing, beauty and household goods. These figures tally with our own experience of the pre-Christmas peak period, when we processed 74% more orders than we did during the same period in 2016. Our fashion fulfilment and beauty fulfilment operations were flat out during Black Fortnight and demand remained high right up until Christmas. This was the first big test for our new, state-of-the-art warehouse at The Birches in East Grinstead and we’re happy to say it performed brilliantly. Equipped with ever more sophisticated mobile technology, shoppers are increasingly tending to make their purchases online, but they want to be able to see and feel the goods before they do. More than half of UK consumers use the internet to research their purchases, looking for the best deals, but the KPMG survey showed that 40% still like to visit the physical shop at some point in their buying journey. It’s not surprising, then, that retail brands with a physical presence are performing best in the online retail sector. Textile, clothing and footwear stores recorded a 20.9% year on year increase in sales in December, and household goods stores saw sales increase by 17%. Switching fulfilment companies The conclusions from last year’s pre-Christmas period should help retailers to plan their strategy, not just for this year’s peak period but throughout the year. For those who tried to embrace the online trend but were let down by their fulfilment, Black Friday and Christmas will have been a sorely missed opportunity. Now would be a good time to find a logistics partner you can rely on to cope with the increased demand that looks inevitable this year. The migration to online is only going to grow, and with shoppers receiving more and more purchases through the post rather than over the counter, the quality of a retailer’s fulfilment services will become an increasingly key selling point. It’s not just the delivery service that matters either. Returns are becoming increasingly important, as shoppers develop the habit of buying multiple versions of the same product with the intention of choosing one and sending the rest back. Nearly two thirds (61%) of online shoppers say a free returns service is important to them. So while economic uncertainty may continue to suppress retail spending for a while longer, the good news is that there are exciting opportunities for retailers who embrace online and extend the quality of their in-store experience to the internet, in partnership with a good logistics and fulfilment partner. Author: Mike Stephenson, Managing Director, ILG Mike Stephenson has been instrumental in ILG’s growth to becoming a market leader in fulfilment, warehousing and logistics services. Over the last 15 years he has developed fulfilment services in response to the evolution of e-commerce and major developments in the courier and freight industries. He works closely with numerous fashion and beauty brands at a strategic level to find the best solutions for their fulfilment and delivery needs.
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DRIVERLESS LORRIES AND THE FUTURE OF LOGISTICS
Vehicle technology is evolving at breakneck speed. We’re already seeing a number of high–end features become more and more standard with every purchase, such as voice activated commands and park assisting sensors. The next big step will be the introduction of fully autonomous driverless vehicles, and the implications for the logistics industry are profound. Driverless technology has the potential to completely transform how retail companies manage and move their stock, but how plausible is it? What are the potential pitfalls of implementing automated vehicles on a large scale? So far, all vehicles with autonomous elements must have a human driver in complete control of the vehicle. This kind of technology hasn’t yet reached a point where humans are willing to entrust their lives, and the lives of their families, to a machine. These are justified concerns, and while it is true that the technology has not yet advanced to the point where a human driver is no longer required, we aren’t far off. In theory, driverless vehicles should drastically improve road safety by removing the potential for human error. As drivers, we are prone to make errors of judgement or become distracted. Assuming the technology was sound in the first place, an automated system would suffer none of these flaws. Autonomous Lorries: a reality? Cars are not the only vehicle type to receive ‘driverless’ attention. There have recently been
successful trials of semi-autonomous trucks. According to one source, the government is planning to allow for the trial of such lorries on British roads, with the M6 in Cumbria a likely candidate owing to its relative lack of traffic and its widely-spaced junctions. It should be stated at the outset that these lorries are not completely automatic – there is a driver at the helm. What makes these lorries autonomous is that they utilise a combination of on-board systems, such as cameras and radar, to scan the immediate surroundings and effectively plot a safe course. This may sound like standard fare, but what makes these trucks interesting from a logistics point of view is the potential of this technology to create what the industry is calling a ‘platoon’. This is where a convoy of similarly outfitted lorries travel in a much tighter formation than would ordinarily be possible. Because the systems in the platoon are linked, the brakes and accelerator can be applied simultaneously in all the participating vehicles thereby eliminating the potential of a crash. Travelling closer together means that the lorries benefit from the slipstream of the one ahead, thereby reducing wind resistance and, consequently, fuel consumption. The savings could be significant. Tests by Scania have shown that platoons can reduce fuel consumption by up to 12%. This equates to some 4,000 litres of fuel saved per vehicle annually. For context, this fuel saved would carry a typical family car some 35,000 miles. Evidently, the potential of this technology for logistics companies is enormous. To be sure, lorries in platoon still require humans to oversee the operation, but it is hoped that this is the first step on the road to fully autonomous haulage vehicles. Aside from the obvious savings in fuel consumption, independent vehicles would be able to travel at night when human drivers would require sleep. Not only would this increase company profits (as they would be able to complete more journeys), it has a knock-on benefit for other motorists in that there would be potentially fewer haulage vehicles on the road during the day. This means less congestion, less fuel spent idling in traffic jams, and less driver angst. Is driverless worth it for retailers? These automated platoons sound like a perfect solution for retail firms looking to ship lots of stock. However, as with any technology, there is no guarantee of it working 100% of the time, so retail firms may be cautious and slow on the uptake. This is to be expected. What retail firms should bear in mind is the sheer attention and investment autonomous vehicle technology is getting from huge players in the industry. The technology required to platoon effectively involves some impressive electronics, all of which need to be properly tested and maintained. The self-driving truck deployed by Uber last year boasted $30,000 of kit, and the city of Ontario has recently invested $3 million into research in the field. So while there is some understandable caution around the implementation of automated systems, retailers can at least rest safe in the knowledge that the hard work and testing of them will be vigorous and comprehensive. Yet the concerns of retailers won’t stop there however. Indeed, it’s easy to picture a scenario whereby a company is forced to pay a ransom to have their fleet liberated from hackers. The cost and threat of cybercrime is already becoming a phenomenon, and this is something retailers will be keeping a close eye on. An automated fleet may save fuel, operate more efficiently and be able to work long hours
throughout the night, but the real question for retailers is whether these advantages are truly worth it. Something the industry at large will have to answer is what will happen to those drivers who will inevitably lose their jobs as automation becomes commonplace? Author: Matt Foster Matt is a Content & Marketing strategist for a number of businesses that operate on a local and national level, and has worked with major global brands on their online content & digital PR. He writes about marketing, social media, PR, SEO, and digital strategies for business and works at Distinctly.
DATEC STUDY: ECOMMERCE PACKAGING – A VERY POWERFUL OPPORTUNITY With so much choice online it’s time you considered making your online deliveries a special experience for your customer. Customers that order online need to trust and remember your brand to encourage them to come back and place their next order with you too. In a virtual buying experience your packaging is the first tangible experience your customer has of your brand, so it’s the most powerful opportunity to strengthen your brand and draw your customer into a brand experience. Here’s a few surprising facts: -
“Nearly 40% of customers would share a photo of an online delivery on social media channels if it came in a unique, branded or gift-like box.” “74% of 18-25 year olds said they would be likely to share a new product with their friends on social media, with a large proportion (88%) of them using Facebook.” “52% of retail customers are more likely to make repeated purchases from an online store that delivered their order in premium packaging.” “Google says 1 in 5 consumers have watched an unboxing video and 76% of those watched it while researching a product” “Creating a unique Unboxing Experience can cost as little as 15p, it’s worth every penny!”
(Results of research by carried out by Dotcom Distribution and Datec Packaging)
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MODERNISING YOUR WAREHOUSE SPACE: SAVING TIME AND MONEY
Even if you believe that your warehouse is running efficiently, it is likely that there is still room for improvement and development. An Intermec study draws attention to the importance of an efficient warehouse, after finding that the average warehouse in the UK loses as many as 3,000 hours annually as a result of unproductive work. While it is inevitable that there will be some lost hours, 3,000 annually is a significant amount, especially when you consider what this means in terms of productivity levels and profits. It is therefore vital that you consider evaluating your warehouse space to ensure it is optimised to its full potential and excess lost hours are kept to a minimum. If the Intermec figures have made you begin to question the way your warehouse operates, and you are keen to explore warehouse management tips and money saving solutions, then here are some key areas to consider. Implement Effective Warehouse Management Systems and Software Warehouse management systems and software are the perfect way to keep an accurate account of the day-to-day operation of your warehouse. The software enables you to have centralised control of tasks and track inventory and stock levels as well as their locations within the warehouse. Warehouse management systems will allow you to identify where potential losses are coming
from and how to manage this, which can be of advantage to companies who deal in products that can be easily spoiled. As every loss could potentially cost time, money or both, if your warehouse has had an acceptance for lost or spoiled products, this software will enable you to identify it and lower it. However, with the vast range of systems available it is important that you take time to research the best system available for your specific company needs. How Ergonomic is your Equipment? Your employees are your most important asset within the workhouse, and the backbone of the operation. It is therefore important to look after your staff, as well as their health, to maintain worker productivity. Investments into ergonomic equipment will result in your employees remaining refreshed and focused, and can even reduce any time off work from illness or stress. However, investment in ergonomic equipment, like with warehouse management systems, should be carefully researched prior to purchase in order to measure the speed of your return on investment. Something as simple as ensuring a properly-regulated warehouse temperature throughout the summer and winter months can have very positive results in terms of the productivity of the workforce, and with air handling units positioned efficiently within a building, it doesn’t have to cost an arm and a leg either. However, with simple products such as ergonomic mats and adjustable tables you can almost certainly provide immediate and recognisable benefits for your staff. This will be recognised and appreciated and boost worker morale, which in turn will result in higher productivity. Smarter Workplace Structure and Organisation If your workplace doesn’t have a structure, then the chances are it is not operating at full capacity. While structure is essential in any warehouse, so too is the type that you opt for. The “5S” structure, which was created in Japan, is a favoured structure type as it can encourage and stimulate worker involvement directly in the company’s bottom line. The “5S” structure has seen success within the food processing and manufacturing industries. However, as its key themes are predominantly based on efficiency, it can be transferred to and implemented in any sector or situation. The “5S” structure comprises of: Sort, Stabilise, Shine, Standardise and Sustain. Review your Pallet Racking Systems It is highly unlikely that your warehouse does not or has not included pallet racks at some point; illustrating their importance within this environment. Pallet racks enable you to save on space, particularly horizontally, and allow you to locate and store things more effectively, as well as allowing machines and people to ably transport products and manoeuvre between the additional space. Sophisticated racking systems, such as the instillation of a mezzanine floor, can increase the capacity of the warehouse by almost two-fold. Invest in Warehouse Safety and Education Programmes In a time when even the utterance of health and safety is shortly followed by the words ‘gone mad’, anyone in this industry and with their own warehouse will be aware of the sheer importance of health and safety. In fact, investments into warehouse safety are possibly the
biggest and most important that you can or will make. While your warehouse will already be following its own standard safety procedures, it is found that the average safety procedures are often inadequate. OSHA has a public list of fines that have been issued for breached or inadequate safety practices, with fines often running into six figures. It is therefore important that warehouse safety education is not only in place but is also robust. Do not make the mistake of waiting for an incident to happen before you make or notice the need for improvements, as it will then be much too late. In summary, it is important to adapt and modernise your warehouse space to create a more efficient work environment, as well as potentially saving your company money. This can be made from the quantifiable warehouse solutions provided, as well as reviewing case studies of other warehouses that have used similar technology. This way you can pick and choose what works for you and is best for your company’s specific needs. Author: Justin Fox Justin Fox is a digital marketing analyst who works with a number of firms within the logistics sector, particularly in the warehousing and trucking industries. He produces content assessing and advising on business operations, along with solutions to improve productivity and efficiency, and works at Distinctly.
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