B2C Adapting to Change

I love shoes! Am I a cliché? Yes, but over the years I have learnt to buy the right shoes at the right time and for the right occasion… Now unless you work in a B2C selling them, you are probably not interested in my love of shoes, but as an analogy I believe it works well…

So how do shoes relate to B2Cs adapting to change? It’s quite simple really. I spent £5 on my first pair and over time I increased the spend to match my budget and changing lifestyle – basically adapting at a rate that worked for me. Just as I adapted my shoe buying requirements, B2Cs must adapt processes to fit their business needs at a rate that works for employees, customers, finances, technology, space and so on. 

‘One shoe does not fit all, and it can be confusing for companies who have traditionally built their processes around racking, shelving, manual picking, packing and getting the stock out the door.‘

This begs the question, is it a new game? No, the end result is the same, but the speed at which processes are evolving is fast! 

It’s no longer a matter of should we adapt, but when. B2C companies need to remain competitive and they need to keep up with demand.  It’s a tough time for B2Cs – due in part to COVID-19 which has sped up already evolving customer buying trends. I recall several years ago I was sitting in an auditorium in London listening to Marc Benioff, CEO of salesforce – he talked about how we are now in the ‘Age of the Customer’ and that the customer would utilize the technology available to gain greater buying power. Today, we see that customer buying habits have adapted to technology and we continue to see an upsurge in online buying and this change looks as if it is here to stay. Online sites such as Statista offer insights into customer expectations as well as how the Coronavirus has impacted consumer buying habits.

Keeping up with demand, while keeping a close eye on the bottom line, has never been more important. So, what can you do and where do you begin? Especially if you’re a start up!

I have a friend who developed a business selling wallets out of his bedroom. He sold only online at a time when online buying was still in its infancy. Five years ago, his part-time business took off and started to take up most of his time as customer demand was outstripping his stock and his process. In the end, he recognized that to remain in profit he would need to up his game! He was making enough money to invest in some sort of automation.  He purchased one automated storage and retrieval system that he placed in his garage at home. It was a 2.2-meter-high vertical carousel with a 1.8-meter width. Due to the scale of his business, he had no need for a software system, but this storage unit enabled him to keep up with customer demand, manage his stock, and keep tabs on the numbers which allowed him to focus on other things. Automation has enabled him to live a lifestyle that works for him and he continues to reap the rewards without manual effort. 

But for the majority of B2Cs, the last few years have been a roller-coaster. Savvy companies are looking to automation as a means of managing their processes and delivering on current and future investment. These are the companies that will lead the way. Keeping up with customer buying habits has also enabled greater profit through the ability to stock and store more products without increasing personnel or space. As with shoes, choose wisely. When you seek to adapt, focus on what works for you and your business. As mentioned above, whether a new start up or a well-established ecommerce business, growth and delivering a decent ROI needs to take into account changing online consumer buying habits, as well as customer expectation in regard to the ability to manage the increase in online returns.   

If we look at the main processes for any B2C, we all know that you need to focus on storing, picking, packing and on pushing the items out the door. Maybe you have a warehouse full of racks, shelves and pallets with manual processes and maybe this is still working for you. But in a changing consumer market, manual processing will become a more expensive and, in the end, a slower option.

Here’s why automation is a smart alternative to traditional shelving and rack systems. In the long run, it’s a cheaper, faster and more effective option, especially now when social distancing has created even more problems for B2Cs during operations. Automated systems such as conveyors, robotics, ASRS, touch screens, pick-to-light, mini-loads etc are all delivering on a reduction of non-essential handling, especially for fast moving stock. This saves time which means greater productivity in terms of operating costs and improved customer service. Labour costs can also be reduced due to these systems delivering quick retrieval times to meet varying throughput requirements 24/7.

This doesn’t just apply to B2C companies. If we look at wholesale suppliers, they too are experiencing a need to cut costs to remain competitive. I spoke with Marc Borland, a Logistics Director in the UK. Marc stated: “In the past we could achieve a manual pick rate of about 30 picks an hour at our plant. The addition of RF technology and barcoding and tour management increased this to 40 – 45 picks an hour, then we added automated shuttles (ASRS) which today gives us 90-100 picks per hour. These advantages are further enhanced by much quicker replenishment.”  

If we look at the larger 3PLs, they often have a fully automated environment which includes robotics, mini-loads, ASRS, and conveyors which are run in accordance with the needs of a specific contract. But, there are smaller 3PLs that may have different needs. For example, they may have three or more individual contracts and the contracted clients have a tendency not to like their contract processes merging with others. These 3PLs have a requirement for greater flexibility in managing these contracts.  A combination of automated technologies would be required to deliver a workable solution. 

Efficient control of processes and the distribution of hundreds or thousands of product lines at high speeds remains a major benefit of automation and with greater transparency in stock control, and a decrease in error rates, anything less is just not going to cut it.

Author: Debra Wilkins, Marketing Manager, Kardex Remstar