Stocking up for the future

How automation can help the grocery industry adapt to the changing landscape. By Andy Blandford

The coronavirus pandemic saw the mundane transform into the essential. Services previously taken for granted were suddenly catapulted into heightened appreciation whilst some previously overlooked segments of the community became instant heroes.

As lockdown loomed and anxieties around food provision spiraled, supermarkets were placed under unprecedented strain evolving from a commodity we all take for granted into a service essential to sustaining the nation through the crisis of a generation.

Not only were we buying in higher quantities than normal, but the way in which we bought our groceries also changed dramatically. From February to March 2020, grocery delivery apps saw a staggering 218 per cent surge in downloads (Apptopia), illustrating the sudden switch to essential shopping online.

Although the shift to buying online groceries has been taking place for a while, for many consumers still wedded to a weekly physical trip to the supermarket, the Covid-19 pandemic served as a catalyst for long term behavioral change and helped to reframe consumer expectations around grocery shopping. It is now normal to expect to complete the weekly shop from the comfort of your living room and the industry’s ability to meet these new expectations safely and efficiently will be fundamental to its future growth.

Logistical challenges
Delivering groceries accurately and efficiently doesn’t come without its hurdles. From a logistical perspective, the accelerated switch from physical to online shopping presented many significant challenges to grocery retailers as they scrambled to keep up with unrelenting demand.

Demand during the pandemic for superhuman rates of pickup and delivery caused many grocery retailers to turn to third party services to boost their e-commerce capabilities. However, it soon became apparent that these services did not necessarily have the flexibility needed to meet the increased demand, especially during peak ordering times. In a bid to solve this, many retailers looked to temporary hires to expand their resources. Over the course of the pandemic alone 300,000 short term workers were hired. But this solution was also not without its flaws. Despite the influx of labor, consumers still regularly had to wait days, weeks and in some cases months for delivery slots to open with many tiring of the process, abandoning brand loyalties and jumping ship to competitors.

Staffing issues brought on by the pandemic were also compounded by its unique restrictions. No longer able to rely on large volumes of manual labor due to social distancing requirements, grocery retailers found themselves in need of new ways to carry out fulfillment operations.

Whilst the worst of the pandemic’s first wave is seemingly over, in the absence of a vaccine, it’s clear that social distancing measures will remain in place for some time. In order to survive future spikes in demand, such as Christmas and Black Friday, a new approach to product fulfillment will need to be adopted.

Looking to the future
If the grocery industry is to survive the disruption caused by Covid-19 and remain robust in the face of changing consumer demand, a willingness to embrace long term change to supply chain and fulfillment operations is required.

Pre-pandemic, the industry was slowly becoming accustomed to the benefits of supply chain automation, but the unique pressures imposed during this period have significantly accelerated that process. At Dematic we believe Covid-19 has been a tipping point for supply chain automation across all aspects of the retail sector and grocery is no exception. It has placed into sharp focus the benefits of convenience and flexibility that automation technology can provide over traditional, more manual supply chain processes.

A big area in which we are seeing growing appetite for investment in the grocery retail sector is micro-fulfilment technology: compact but highly efficient fulfilment operations taking place at the closest point to the consumer. Micro-fulfillment solutions, in footprints as small as 10,000 sq. ft, can be housed in the back of a store or in an urban fulfilment center. This technology can be used to react to peak demand quickly by shifting between online and in-store fulfilment as well as helping retailers take ownership of the speed at which customers receive orders whilst maintaining the best possible customer experience.

Another important area for potential investment is in Automated Guided Vehicles (AGVs), which can significantly improve shipping speed and accuracy as well as protecting the health of staff by minimizing human contact. These vehicles can also be deployed easily within existing delivery and storage systems allowing for rapid responses to changing demands.

Whilst the next chapter in the coronavirus saga remains uncertain, one thing is sure, we are living in an increasingly volatile world. Every industry, grocery included, will need to prepare for this reality going forward. Investing in supply chain automation is a simple yet effective way to do this. Embracing the power of automation will equip grocery retailers with the agility required to deal with market fluctuations whilst conveniently slotting into their current operations. As industry changing trends arrive with greater frequency, we at Dematic believe that automation technology is no longer an option but a necessity.

Andy Blandford is Senior Vice President and Managing Director at Dematic, an intralogistics innovator that designs, builds and supports intelligent, automated solutions for manufacturing, warehouse and distribution environments for customers that are powering the future of commerce. With engineering centers, manufacturing facilities and service centers located in more than 25 countries, the Dematic global network of 10,000 employees has helped achieve more than 6000 worldwide customer installations for some of the world’s leading brands.