Despite all of the unforeseen challenges of 2020, the retail industry was expected to have a strong finish for the year. Retailers scored huge successes during Black Friday and the Christmas shopping season. E-commerce grew at an unprecedented pace, as retailers and consumers were forced to go digital to avoid physical contact and exposure to the coronavirus. The National Retail Federation was expecting 2020 holiday sales to rise between 3.6% and 5.2% year over year, amounting to between $755 billion and $766 billion in sales.
In the U.S., the Christmas shopping season is the busiest and most profitable time of the year for the retail sector, putting companies to the test of their ability to meet the rapidly changing demands of consumers. But unlike other years, 2020 brought a plethora of challenges as the virus dominated. Many buyers opted to do their holiday shopping online, and stay away from crowds (such as they were) at brick-and-mortar stores.
According to the NPD Group, consumers were planning to do 48% of their holiday shopping online in 2020, up from 41% in the previous year. And while the pandemic has already underscored a need for more robust supply chains, many retail business owners are still struggling to keep up with the sharp increase in e-commerce demand.
Traditional brick-and-mortar stores are facing new challenges, with their storage facilities and warehouses being placed under the greatest strain. Businesses with less robust e-commerce platforms will feel significant pressure, while retailers with vigorous e programs, technologies and support systems will see the most success.
A crucial aspect of online shopping is the demand of many consumers for same-day delivery, putting increased pressure on the supply chains of some of the world’s most popular brands. From the consumer perspective, the faster that a company can fulfill product orders, the better for them. As a result, companies that have implemented technology to improve productivity and efficiency are at a greater competitive advantage.
Warehouse robots have been growing in popularity over the past 10 years, but 2020 may prove to be the tipping point. According to ABI Research, by 2025 roughly 28% of warehouses globally will deploy commercial robots, compared to around 3% in 2018.
Not only do robots make better use of human resources, allowing more orders to be pulled with fewer workers needed, they also reduce picking times to help meet consumer demands for quicker delivery. Robots don’t require breaks or sleep, and can extend work shifts long beyond the norm without adding payroll. And don’t forget the ability of robots to allow for proper social distancing, which helps to keep workers healthy and safe in the pandemic.
Another critical component of many robotic systems is that they are extremely flexible and able to scale to meet higher throughput in response to peak demand. Many systems are easily customizable and expandable, growing as needed to match each retailers’ capacity, without shutting down or experiencing operational loss. When companies need to ramp up production for the holidays, robots allow them to do so seamlessly.
Going into the 2020 holiday season, companies across the retail landscape were in a much different position than the year before. Aided by sophisticated automated systems, retailers were looking to meet ever-growing demands for faster order fulfillment. It was a year for robots — as will be 2021.
Paul Roy is vice president and managing director of AutoStore North America.