by Juha Maijala, Blockstore Group's CEO & Founder
The second day of Shoptalk consisted of onsite meetings and listening to excellent speaker sessions. Great opportunity for first introductions.
Here are my key insights from the day:
Automation and robotics
Marketing automation, allowing companies to take control of marketing processes and making day-to-day marketing quick and stress-free - in store-level is taking place more and more. But what is surprising to find out is that the store automation to enable autonomous stores is still in the very early stages. Everyone is talking about it, yet few have taken action towards it.
How about the use of automation & robotics at the warehouse and delivery? The development is at a better speed, thanks to online shopping which requires new innovative solutions to gain better efficiencies.
As consumer behavior is constantly evolving and having witnessed the general state of despair of the world with changing and challenging situations, increased automation could be a potential answer for higher inventory accuracy as the availability of products is at risk. In addition, to implement omnichannel capabilities and finding the perfect balance of using different channels ask for automation as well
In traditional brick-and-mortar stores, the consumer is doing the logistics (picking and transportation). The business is profitable but with thin margins.
To replace the customer picking by staff or third party however, is challenging: it jeopardizes the store's profitability likewise homedelivery options.
E-commerce specific supply chain is the key to efficiency. But there is a minimum size for efficient fulfillment center operations.
Exotec CEO pointed out that cost-effective Fulfillment Centers start at 500 orders/day. That is the same reason we at Blockstore are preferring more than 1000 SKUs.
He continued that there is also a maximum order size after which the profitability does not increase. In the same way, as we at Blockstore are setting upper limits for automated supermarkets.
Expiration and best before dates in online shopping.
The cost of shrink in smaller fulfillment centers becomes an issue, as the rotation of SKUs is not sufficient and expiration dates are reached.
The expiration dates are even more important for in-store daily shopping for fresh food in traditional brick-and mortar. The same applies – the rotation of SKUs and the number of SKUs needs to be sufficient to satisfy consumer's daily needs.
When we are rethinking local supermarkets to be automatized, we need to remember to also re-think the supply chain and store operating model. The old way won’t match the new, at least not if you want to bring back the profitability of these stores. So, if we have succeeded to renew the entire end-to-end operations with online shopping, why not do the same for physical stores as well?
Optimized supply chain leads to:
Customer satisfaction (accuracy and availability)
Area coverage in residential areas
Better in-store experience
Ability to regain customer experience control and finally
Increased EBIT.
Convenience in stores
The CEO of Ahold Delhaize summarized that in the near future convenience in stores means personalized offers and promotions. Also making the self-checkout, assortments, and shopping journey more connected is important.
This requires real-time connectivity across assortments, shopping journey and inventory management - I mean - true digital connectivity and automation. Otherwise, how could you sell store-specific recipes and daily offers if you don’t have real-time connectivity and the capability to scout products when the consumers are at the store. There are not too many solution providers currently in the market making this possible.
Partners
Being so focused on customers, the time to meet with partners runs short. However, during my lunch, I was accompanied by a Swedish start-up and we started to share information and knowledge.
I am happy about this occasion because networking and sharing information with other players in our phase of building a business is extremely important. We cannot do everything by ourselves, and we can serve better the customers together, also the consumers. I already started preparations to add this company to our ecosystem. Perfect fit for, our set-up.
Hopefully you will hear more soon.