Navigating the challenges of modern retail: An insight for retailers and wholesalers

Navigating the challenges of modern retail: An insight for retailers and wholesalers

In recent years, UK businesses have had to contend with an array of obstacles that have significantly altered the landscape in which they operate. From a global pandemic to soaring energy costs and labour shortages, external forces have caused a dramatic shift in consumer habits and behaviours.

These events have presented the perfect storm of complex problems that have put even the most experienced businesses to the test…

The rise of online shopping

The ongoing shift towards ecommerce and online shopping has become increasingly prevalent in the UK retail sector, leading to the downfall of many long-established retailers who have been unable to keep up with the times. The latest figures suggest that the ecommerce share of retail sales is likely to reach 38.1% in 2023, with further growth to 38.6% by 2025.

This shift in the balance of power has led to a surge in demand for ecommerce operations, leaving businesses scrambling to meet the extra requirements in terms of inventory, staff, and warehouse space.

Demand for warehouse space

It has been reported that Amazon had taken a quarter of all UK warehouse space leased in 2020 and 2021, though they have since admitted to an overextension in their property holdings. This has left room for smaller retailers to catch up on the demand.

Andrew Jones, chief executive of urban warehouse owner London Metric Property, has said that warehouse demand is likely to continue to outstrip supply due to the need for onshore supply chains and the growth of smaller ecommerce businesses.

Click here to discover the UK locations with the least available warehouse space and what your business can do to combat the race for space.

Demand for automation

In order to meet the demands of customers for faster and more efficient delivery, traditional fulfilment and warehouse operations have had to switch to more automated processes. Manual picking processes, which involve printed out paper and labels, are no longer suitable for many businesses, and this has left them unprepared for the rapid changes in the market. Jon Roberts, Sales Director of OrderWise, has noted that “a lot of companies, retail and wholesale, were really caught short footed – they didn’t have the capability to process orders quickly enough and they were unable to provide the level of service that customers were expecting.”

Larger companies taking the lead

In response, larger companies have begun investing in technology, both software and hardware, to help ease the manual burden. This has seen retailers across many sectors investing in automation, with the McKinsey survey showing that 80% of respondents intend to increase their automation investments in the next two to three years. It also revealed that 80% of retailers plan to concentrate their supply chain spending on addressing the constant demands on ecommerce fulfillment and 64% of retailers have automating warehouse roles as their top digitisation and automation priority.

Automated solutions for SME’s

Small and medium businesses, however, may feel that such investments are out of their reach. But here too, there are a range of automation choices available, from warehouse management systems, to handheld scanners and racking solutions. By introducing this kind of automation, SME’s can reduce their reliance on manual processes, freeing up labour and resources that can be better utilised elsewhere. Not only does automation save businesses time and money, but it also reduces the risk of human error and provides customers with superior service and faster delivery times. Ultimately, these benefits lead to increased productivity and cost savings, making automation an attractive option for all.

Looking forward…

By 2024, it’s likely that the majority of retailers and wholesalers will have taken the plunge and invested in technology to stay afloat in the ever-changing, ultra-competitive modern age. In doing so, they will not only benefit from being able to compete in an unsteady economic climate, but also from a more efficient and productive atmosphere for their staff and operations. From simple WMS solutions to advanced warehouse automation, the right technology can be the game-changer that makes all the difference.

Looking to learn more about how automation can give your business the power to grow, even in times of recession and high inflation? Download our latest whitepaper ‘Automation within reach in 2023’ to discover the potential of your own operation.