Fuelling efficiency in the eGrocery sector with warehouse automation

The pandemic and subsequent lockdowns accelerated demand for on-the-day or next day food delivery services. As a result, the already emerging eGrocery sector saw a surge in operations. But there are some glaring challenges that make eGrocery an entirely different concept to the traditional grocery store.

Firstly, grocery retailers need to do the order picking, and this can amount to a sizable number of items – most customers order more online than they would buy in-store. Secondly, the time spent picking eats into profit margins; by the time an order has been picked and processed, it will typically have an operating margin of minus 15 percent.

Therefore, the challenge for any eGrocery operation is to deliver a service that is efficient and profitable. This means building out solid infrastructure for delivery: an easy-to-use online ordering platform, an efficient order picking and packing system, and a rapid delivery service.

Below are five ways in which warehouse automation can help eGrocery firms realise this goal.

  1. Reduced human error for greater order accuracy

If floor workers are tired or distracted, it is highly likely that mistakes will be made. To get around this, and to safeguard workers against potential injuries, warehouses should do their best to omit as many laborious manual tasks as possible. Using an Automated Storage and Revival System (ASRS) in combination with a digital Warehouse Control System (WCS) can make this happen.

The ASRS greatly reduces the number of picking errors, which in turn means less customer complaints and returns to deal with. Additionally, consistent order picking is important if a business wishes to maintain correct inventory data.

  • Quicker delivery to meet changing customer expectations

The pandemic has brought with it a change in demand – quick home delivery of a wide variety of products is now expected. However, expansion into online business can quickly become chaotic. Therefore, making use of solutions such as a robotics based ASRS greatly reduces the overall footprint of warehouse activity. This means that a greater number of orders can be processed at one time, allowing the warehouse to scale operations.

Automation also makes it easier to store items separately. A problem with traditional manual systems is that an order can be placed for an item that is, at the time, in stock. However, it is common for these items to be missing when the time comes for picking the order. The segmented storage means warehouse staff have a clearer picture of overall inventory levels and, therefore, can better gauge what items are out of stock.

  • Optimised labour costs

The explosion in eCommerce activity has particularly strong implications for eGrocery. The average basket in the sector is 15 – 30 items, and if all these items are picked by hand, the energy, time and labour costs will add up considerably. Given the labour shortages many markets are experiencing, warehouse automation can be a brilliant way to plug the gaps. They also save space, which means lower real estate costs.

For a real-life example of how this would work, we can look to the Swedish firm Matsmart. This eGrocer chose to invest in warehouse automation after hitting peak capacity in 2021. With 149 AutoStore robots, Matsmart yielded impressive results: namely three times previous capacity for a total of 6,000 items picked per hour.

  • Increased ability to operate in controlled and restricted environments

When storing groceries, certain goods need to be stored at different temperatures. As the operating temperature for AutoStore is from 35°C to 0 °C, an ASRS solution is advantageous as it is able to perform in and cope with dramatic temperature changes.

Furthermore, a robotic grid system allows all available warehouse space to be used productively, no matter how small or unusually shaped. As such, a grid of intelligent order picking robots can be deployed either in the back of an existed store or in micro fulfilment centres within cities. This is a positive overall as maintaining city-based fulfilment centres can speed up the final delivery stage, also known as “last mile” delivery.

  • Improved energy efficiency

Many customers are increasingly mindful that the products they buy are sustainable and a growing number of automated solutions have responded to this. AutoStore, for example, uses batteries in its robots and are both rechargeable and capable of producing energy on their own. The energy usage of ten robots is equal to that of one vacuum cleaner.

Because warehouse automation solutions allow for greater visibility, store owners have an easier time seeing how long items have spent passing through the warehouse.

Early adopters will reap the benefits

The eGrocery sector is still behind in warehouse technology compared to other eCommerce sectors, but those who adopt automation first will have considerable advantages down the line. Put simply: warehouse automation has worked for others in eCommerce and there is nothing to suggest they will not work for the eGrocery sector.

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