Emerging General Merchandise Warehousing Opportunities - Exotec

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Emerging General Merchandise Warehousing Opportunities

January 14, 2024

The general merchandise sector saw considerable growth in recent years and is projected to continue expanding for years to come. Key factors fueling this growth include an upward trend in urbanization, surge in disposable incomes, and shifts in consumer lifestyles. This dynamic evolution reflects an increasing consumer appetite for both convenience and value, driving a notable uptick in the demand for general merchandise. Adding to this momentum is the e-commerce boom, providing a seamless and accessible platform for consumers to engage with a diverse array of general merchandise brands and products.

Interestingly, amid the digital age and the convenience it offers, there remains a steadfast affinity for traditional brick-and-mortar stores. Data reveals that 90% of consumers express a preference for the tangible experience of in-store shopping. This desire is coupled with the expectation of additional conveniences like delivery, online ordering, and curbside pickup. The intricate interplay between traditional and contemporary shopping preferences highlights the nuanced dynamics shaping the general merchandise market.

The upward trend for general merchandisers has ushered in increased complexities and dynamics for these brands, particularly within their warehouses as they navigate the challenges of efficiently managing omnichannel fulfillment. These warehouses contend with a myriad of issues, including labor shortages and supply chain disruptions. Adding to the complexity are rising customer expectations for diverse product ranges, faster shipping, and consistent order accuracy, placing significant demands on warehouses to adapt and excel in this evolving landscape.

Fortunately, there are a number of emerging warehousing opportunities for general merchandisers to take advantage of and position themselves for success in the face of these challenges. 

Goods-to-person warehouse automation for general merchandisers

Key General Merchandise Warehousing Opportunities 

Transformative Robotic Automation 

Robotic automation is transforming the warehouse operations of several of the world’s biggest general merchandise brands. Until recently, traditional automation methods such as mini-loads or shuttle systems stood out as the primary alternatives to manual picking. However, these systems fall short in meeting modern needs due to their reliance on heavy, static machinery with multiple points of failure.

In contrast, goods-to-person systems like the Exotec® Skypod® system employ lightweight and elegant robotics, providing an optimal mix of performance and flexibility to adapt seamlessly to dynamic consumer demand and market challenges. Skypod system robots autonomously navigate goods between high-density storage racks and ergonomic picking stations. This innovative approach improves order accuracy and boosts throughput by up to 5X compared to manual operations, with robots retrieving any item in the system within two minutes for rapid response to urgent order requests across distribution channels. 

By separating storage from throughput, the Skypod system allows independent scaling of both so businesses can expand precisely as needed without incurring unnecessary costs for excess equipment. The modular system fits the broadest range of throughput, storage, and industry requirements. Whether adding an e-commerce channel or changing the number and structure of SKUs, the system can meet today’s needs and quickly change as business models evolve over time.

Watch how Exotec can streamline your omnichannel fulfillment with a unified system.

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Streamlining Store Replenishment and e-Commerce Fulfillment 

Integrating store replenishment and e-Commerce order fulfillment operations to a single system, rather than managing multiple systems, poses a significant challenge. Managing the complexities of omnichannel inventory priorities, fluctuating order volumes, and varying fulfillment speeds within a unified system is a daunting task. However, the successful integration of these channels brings substantial benefits and is now achievable through innovative robotics solutions like the Skypod system.

The Skypod system seamlessly merges store replenishment and e-commerce order fulfillment by facilitating the storage of goods at both case and piece levels, simplifying complexity through centralized inventory management. This streamlining of operations results in substantial long-term cost savings including the following: 

  • Reduced Manual Labor Requirements: This consolidation decreases labor demands for the most physically intensive and repetitive tasks involved in order fulfillment. Moreover, the streamlined efficiency of the unified system translates into reduced in-store labor requirements. It achieves this by streamlining inventory organization and deliveries according to store layouts and merchandise categories.
  • Reduced Holding Costs: The Skypod system simplifies omnichannel complexities by centralizing inventory. This eliminates expenses related to scattered stock and enhances visibility for a more strategic and efficient approach to restocking, so business can store precisely what is needed, for when it is needed.
  • Lower Transportation Costs: Sending a wider variety of products in the same space reduces the need for unnecessary trips, ultimately cutting down transportation costs.

Replenishing Stores at the Piece Level 

Amid ever-expanding arrays of SKUs, diverse supplier lead times, and varying demands across brick-and-mortar networks, general merchandise brands are reassessing their traditional store replenishment approaches. They are reconsidering conventional top-down replenishment strategies, often involving the shipment of full cases to storefront locations.

Recognizing the need for innovation, general merchandise operators are increasingly turning to a bottom-up inventory approach, making replenishment decisions at the store level. The shift to fulfilling inventory with a precise mix of pieces and cases, as opposed to traditional case replenishment, is becoming pivotal for the success of warehouse operations.

Yet, manually fulfilling storefronts at the piece level remains a labor-intensive and costly endeavor. The automation of this process has faced challenges due to inflexible traditional technology and uncertain forecasts. However, the Skypod system streamlines the shipment of both full cases and pieces from warehouses to stores. This provides businesses with the following advantages. 

  • Drive Sales: Expand sales opportunities by offering a diverse selection of merchandise at stores
  • Better deploy capital: Strategically allocate inventory to high-demand locations
  • Drive Customer Loyalty: Maximize repeat business by ensuring that customers can always find the items they are looking for

Streamline Your Omnichannel Fulfillment

Still utilizing separate systems for omnichannel fulfillment? Streamline your operations with Exotec to increase performance, reduce operational costs, and seamlessly adapt to an unpredictable future. Contact a member of our team to discuss how.