How Online Retail is Prepared for the Peak Season and Record Volumes

In an editorial, Sarah Adenau, Business Development Manager E-Commerce DACH & CEE at Autostore System GmbH, describes how online retail is prepared for the peak season. This begins with Black Week and extends until Christmas. Due to the COVID-19 pandemic, record volumes are expected everywhere. It’s good to be prepared for it.

(Mönchengladbach) Black Week, Black Days, Black Shopping – the bargain hunt is currently in full swing. With each day leading up to the eagerly awaited ‘Black Friday’, retailers are building excitement and enticing customers with discounts. The trend, which originated in the USA, of holding a massive discount battle on the Friday after Thanksgiving is increasingly becoming a shopping event in Europe, taking place not just online. However, this year, things are different due to the COVID-19 pandemic: While brick-and-mortar stores are struggling with high restrictions and particularly in city centers and shopping malls with declining sales, online retailers have been among the winners since the first lockdown in spring. According to the Federal Association of E-Commerce and Mail Order (bevh), the above-average growth of e-commerce in Germany has continued into the third quarter. With an increase of 13.3 percent, online sales rose again more strongly than in the corresponding quarter of the previous year (+12.3 percent). Cumulatively, e-commerce revenue has increased by 10.6 percent compared to the first nine months of 2019, reaching 56 billion euros.

Christmas Business in Online Retail Even Stronger This Year

A larger share of the Christmas business will shift to the internet this year. The starting signal for this is given in these days: The German Retail Association (HDE) expects online sales of 3.7 billion euros just for the actions around Black Friday and the following Cyber Monday. This represents an increase of 18 percent compared to the previous year. This significant growth surpasses anything the industry has experienced so far. Similar trends are seen in Austria: Due to the lockdown and many closed stores, the Austrian Retail Association expects a total revenue of 370 million euros for Black Friday shopping, which is a reduction of about 8 percent compared to the previous year. However, exponential growth is emerging for online retail. For the first time, e-commerce revenue this year will account for more than 11 percent of total Austrian retail sales.

Retail in City Centers Suffers

Retail in German city centers is allowed to open, but at the same time, politicians are urging citizens to stay at home. As a result, many customers will prefer to shop for their Christmas gifts online this year (still). This is also reflected in data from the HDE Consumer Barometer: According to this, 44 percent of consumers across all age groups want to do their Christmas shopping increasingly online. The association estimates that online sales for Christmas are expected to increase by 19 percent to over 17 billion euros. At the same time, sales for city center retailers will shrink due to the impacts of the partial lockdown, the cancellation of Christmas markets, and the resulting decrease in customer frequency. During peak times like Black Friday, supply chains are put under increased pressure, and existing systems are tested like never before. Against this backdrop, online retailers must be well-prepared to handle the seasonal surge in orders. Retailers who can quickly meet demand will be ahead of the competition and triumph on Black Friday and during the lucrative Christmas business.

Automated Storage Systems at an Advantage

The best-prepared retail companies or contract logistics providers are those that work with modern automated storage and picking systems and can scale their performance and productivity with less personnel. A successful model is the development of the online business of Rituals Cosmetics. Especially for Black Friday and the upcoming Christmas business, order volumes are increasing manifold. Currently, Advent calendars or special gift sets are in high demand. Logistics and shipping are handled by Arvato Supply Chain Solutions. In 2019, the service provider commissioned an AutoStore system with a capacity of 30,000 container slots and 36 robots at its location in Gennep, Netherlands, as the growth could no longer be efficiently managed manually on the available space. For Arvato, the automation solution plays a crucial role and is an important step towards operational excellence.

Scalability in Intralogistics is a Success Factor

Scalability in intralogistics is also the decisive success factor for the pure online retailer Bergfreunde.de, which is currently inviting its customers to the ‘Black Outdoor Days’ with various promotions and special product focuses. The company has grown by an average of 30 percent per year over the past few years. With the help of the AutoStore system, Bergfreunde.de has managed to increase efficiency in order picking by more than 400 percent. Additionally, the lead time from customer order to handover to the shipper has been reduced to less than three hours. Today, the company processes more than 15,000 orders on peak order days. The employees in the logistics center of Bergfreunde.de are currently supported by 95 robots that move 124,000 containers stacked space-saving in 16 levels. The high degree of automation in logistics, due to the use of AutoStore, has helped Bergfreunde.de meet the additional customer demand and implement the increased requirements for processes and occupational safety due to COVID-19. In e-commerce, the motto is: ‘You don’t win customers because of logistics, but you lose customers if logistics doesn’t work.’ Looking ahead to the peak season, it is necessary to work on space efficiency in warehouses, to position oneself as sustainably as possible, and to keep the customer in focus.

About AutoStore System GmbH

AutoStore, founded in 1996, is a robotics technology company that invented and continuously develops Cube Storage Automation; the densest existing storage technology. Our focus is to combine software and hardware with human capabilities to develop the future of efficient warehouses. The company is represented with more than 500 installations in 30 countries across a variety of industries and sectors. All sales, design, and installation activities are carried out through a network of qualified integrators who are our partners. Our headquarters is in Nedre Vats, Norway, and we have offices in the USA, UK, Germany, France, and Japan. Photo: © AutoStore www.autostoresystem.com