Sorted: robots will provide the answer to eCommerce fulfilment

By Neil Berry SVP & GM, EMEA, Berkshire Grey. 

The end of 2020 marked a turning point for the online grocery market, with COVID-19 accelerating orders and some key acquisitions of robotics companies in the retail space. Since the beginning of the pandemic in March, consumer demand for shopping online has sky-rocketed, fuelled by lockdowns and accompanied by high expectations of fast and free delivery.

This has stretched the capabilities of supermarkets – particularly in the areas of picking, packing, and delivery, where human labour still plays a major role. The focus on robotic automation reveals the direction that next-generation retail technology will have to take to deliver efficiency, cost savings, and customer satisfaction. Supermarkets will have to begin to follow suit in 2021 – or risk being left behind.

The trials and tribulations of grocery retailing through the pandemic

For the most part, supermarkets have done well from the pandemic. With pubs and restaurants closed, people have transferred their spending to food and drink to consume at home. Many supermarkets benefitted, with reports of November 2020 being the biggest month ever for U.K. grocery sales with shoppers spending almost £11bn. However, there were concerns among the leading supermarket brands that the high cost of expanding online delivery operations last year would impact those profits. 

Online shopping had been on the increase before the coronavirus but as the lockdowns began, the shift radically accelerated – some experts have claimed by as much as five years. This has caused problems for supply chain processes that weren’t quite ready to scale at the same pace. With the latest lockdown, online shoppers are again experiencing long queues for ordering and low availability for delivery slots; many supermarkets have urged people to shop in store if they can. In these times of extreme demand, supermarkets have been unable to scale the online provision enough to cope with demand. Miriam Burt, Managing Vice President at Gartner puts it bluntly: "I think that what the pandemic has showed is that the infrastructure that retailers had in place for moving in the eCommerce world, really failed spectacularly.” 

The last mile — people problems

The root of the problem lies with the issue of “last mile” fulfilment. Most supermarkets still rely on humans to physically pick items from the store and to pack them into bags or crates for customers.  With online orders doubling, the response for several leading supermarkets has been to bring in extra temporary employees to cope with shifting customer demand. Reportedly seven of the U.K.’s biggest supermarkets had added at least 136,000 staff by mid-August 2020. This approach has kept them in the black, but as an ongoing strategy, it is not the most cost-effective or efficient solution to managing order fulfilment. In the physical world, shoppers do their own picking, packing and delivery. Employing staff to do this job is expensive, as Gartner’s Burt states: "It's very difficult to do last mile fulfilment profitably, partly because most of it is human labour." 

From store to distribution centre: learning to adapt

Supermarkets have had a lot to contend with: even before the pandemic, they were already coping with a rapidly evolving retail landscape and declining footfall. Bricks and mortar supermarkets have now had to address multiple issues from property management and COVID-19 stockpiling to staff and shopper safety, all while managing the increased demand on their online systems. There are grocers that already have the advantage of being purely online supermarkets: fulfilling and delivering online orders has always been their main focus, whereas others have largely focused their technologyinvestments on front end applications such as electronic point of sale (EPOS). 

The environment from which orders are picked has been key to a retailer’s ability to be efficient. For instance, eCommerce companies often have a purpose-built warehouse, which has been deploying robots in various roles for some time. Experiencing the difficulty of order picking alongside customers in a shop, other supermarkets have begun to adapt their own stores in order to bring ‘mini warehouses’ into the inner city. Some have converted shops into ‘dark stores’, where physical customers are no longer invited in and the building is instead devoted purely to online deliveries. Then there are micro-fulfilment centres, moderately sized and often automated distribution centres in urban areas purposely built to fulfil online deliveries. Occasionally, supermarkets have expanded their shop-based warehouse facilities by occupying newly-empty adjacent stores.

How robots can help

In a customer-free environment, robotic automation can make the process more efficient and cost-effective. To work in the complex grocery environment at the order picking end, the robots need to sense and scan, learn and continuously auto-adjust speed and grasp for every product to accommodate variations in item packaging, weight, and dimensions. They must be able to determine and act on information about missing items, for example. They need to be part of a solution that fits with the specific needs of the retailer and the environment they will be working in. 

Deploying robots must be part of a holistic approach to automation, which involves innovation across the entire system, to produce performance that addresses the customer’s needs. Our own Chief Scientist at Berkshire Grey, Dr. Matthew Mason, uses the development of the motorcar as an analogy: “Put yourself in Henry Ford’s place — trying to automate the horse-and carriage. If you are focused on components, you might swap a robot for the horse. But if you are focused on the true overall goal, you would look at the whole system. You would ask, how do I redesign the surrounding components to solve the real problem? That is the holistic approach.”

Robots vs. humans? 

That is why robotic automation is not as simple as replacing a human with a robot. In the past, some sensational press stories have played on unfounded fears about job losses through automation, but in reality, we are much more likely to see a hybrid solution. Robots are cheaper, faster, easier to train, and more reliable than humans in some roles, but these are the jobs where it is already very hard to find, train, and keep human workers, as well as healthcare and wellbeing challenges based on such repetitive tasks. These roles have largely been created by our digital economy: pick, pack, sort, and ship anything we want exactly when we want it. Human employees will not be redundant, rather redeployed to where they can add value: customer service roles and tasks that boost sales. 

The accelerated shift to online shopping is unlikely to retreat: supermarkets must find a way to make their eCommerce fulfilment deliver customer satisfaction and profits. The investments in robotic picking solutions validate that this is the way to achieve these goals. To remain competitive with pure play online supermarkets that are focusing on warehouse automation, bricks and mortar companies must also look at where they can implement robotics and move towards a holistic IoT solution. It is time to modernise the traditional supermarket infrastructure but the good news is that this is a technological hotspot and there are many options available to forward thinking companies.

Comments (0)

Add a Comment

This thread has been closed from taking new comments.

Editorial: +44 (0)1892 536363
Publisher: +44 (0)208 440 0372
Subscribe FREE to the weekly E-newsletter