How shared-user automated warehousing is tackling the pressures of peak season.
January is an important month for UK businesses, which have just made it through the Black Friday, Christmas shopping and Boxing Day sales boom. In the final two months of 2023, British consumers spent approximately £24 billion online, a 3.7 per cent increase on the previous year.
In the relative downtime following the festive period, business leaders will reflect on how they can improve operations in the new year. The British Retail Consortium has predicted that 2024 will be “another challenging year” for retailers due to consumers still impacted by the cost-of-living crisis, the impending hike in business rates and disruption to shipments from the Far East via the Red Sea. Indeed, the IGD’s Shopper Confidence Index in December was -8, three points lower than the longer-term average.
As a result of this uncertain future, businesses must ensure they can cost-effectively scale up and down while still delivering excellent customer service, improving accuracy and efficiency. Many may have struggled to meet sales targets or dealt with incorrectly fulfilled orders during seasonal peaks, resulting in dispatch delays and a disproportionate strain on customer service. Businesses most affected by these kinds of issues are small or medium-sized because they operate with tighter margins and fewer resources than larger enterprises. A few negative reviews from poor customer experiences will also have a more significant relative impact on their reputation, and they may not have the financial capacity to offer free returns or replacements. Businesses tend to see a rise in those tricky-to-process returns in January and the first two days of this year saw a 42 per cent increase in returns over 2023.
Dionne Redpath, COO and Head of Warehouse for Europa Worldwide Group, said: “A third of their business volume might happen in the last six weeks of the year, for example, from Black Friday through to Christmas, and the labour requirements needed to be able to deliver that peak of magnitude has the capacity to come quite challenging.”
A potential solution to the difficulties felt over busier periods for businesses of all sizes is to make use of automation. Using automated picking and sorting in warehouses can help streamline both order fulfilment and returns processes, reducing errors. Automated systems can also handle inventory management, helping to minimise dispatch delays and alleviate the strain on customer services. Such systems can feel out of reach for businesses with a smaller budget, but Europa Warehouse – the award-winning, specialist third-party logistics (3PL) division of Europa Worldwide Group – has a ‘shared-user’ automated solution, housed at its 715,000 square-foot warehouse in Corby. This single facility provides state-of-the-art, £11 million automation technology to multiple businesses, making access more affordable. This shared-user approach to automation is very uncommon within the UK market.
“We were feeling those difficulties [during peak season] ourselves and, therefore, our thoughts really turned to how do we create a more stable operating environment?” Ms Redpath told TechHQ.
“Our customers come to us wanting to know how they can achieve seamless fulfilment during that time without having costly capital investments or a chaotic fulfilment process. While there isn’t always one straight answer, we have found that by adopting shared-user automation, peak season doesn’t need to feel like peak at all.
“It’s no secret that automation is going to revolutionise the future for warehousing in coming years. In fact, many of the larger players in e-commerce and retail have been incorporating robots, cobots and artificial intelligence technologies within their warehouses for some time, though many would have had to sign up to a long-term contract and committed significant investment in the technology. However, there are plenty of businesses who may not wish to do either of those things for a host of reasons yet the benefits of being able to do so are just as important.”
At the shared-user warehouse in Corby, which was the product of a £60m investment – the Group’s largest to date, products for multiple companies are kept in ‘totes’ within the high-density, secure storage environment. When an order is received, the automated system calculates the most efficient fulfilment process, triggering the launch of the order carton and the totes containing the products needed to fulfil the order, to arrive at the picker at precisely the right time. The system has two means of fulfilling orders at picking stations, both offering the opportunity to fulfil multiple orders at the same time with a specific picking station providing the opportunity to fulfil 48 orders simultaneously. Added to that, the process boasts and impressive 100 per cent accuracy in pick rates.
“When considering very small products, such as cosmetics or components, the system is sophisticated enough to allow totes to be segmented across as many as 12 product types,” Ms Redpath explains. “The physical construction and configuration of the set-up means that it’s extremely secure which is absolutely fantastic for very high-value products.”
The shared-user facility swiftly adjusts to varying demands, ensuring optimal inventory levels and bolstering confidence. Europa Warehouse efficiently managed 17.2 million units via its automated platform in 2022, effortlessly scaling from 40,000 to 100,000 picks within 24 hours. The system’s modular nature enables tailored operations for diverse businesses, regardless of size or budget limitations.
Ms Redpath told TechHQ: “It allows the 3PL to take their expertise and apply it to that business, meaning that the customer can just carry on carrying on and growing their business. All we have to do is mobilise a small number of additional pickers or pick stations in order to be able to unlock that value.”
Europa’s low-cost pallet storage options complement the shared-user automation advantages. For e-commerce businesses who want to maximise value for money, the £1.49 + VAT, the £1.49 + VAT per pallet per week offering allows companies to allocate more capital to expand their business operations, whether through marketing strategies, product diversification or enhancing customer service experiences.
With the cost-of-living crisis, geopolitical turbulence and impending high business rates, Europa Warehouse seeks to level the playing field for retailers. To learn more about how your business can benefit from shared-user warehousing during peak season, call one of Europa’s dedicated warehouse advisers on 01536 909 300 or email firstname.lastname@example.org.