Retailers Are in Danger of Being Overwhelmed by Holiday Demand. Automation is the Fix 

Online retailers are facing a major capacity crisis this holiday season. Since COVID-19 hit, reduced headcount and social distancing practices within the walls of warehouses and distribution centers mean retail businesses are already struggling to manage the stresses and strains of increased e-commerce demand.

Capacity issues are largely linked to an inability to process sudden increases in demand. You’d be forgiven for thinking that this is only a problem for midsized retailers, but some of the largest businesses in the world struggle to process sudden demand, as we saw earlier this year when Microsoft encountered a myriad of problems when opening the pre-order window for the new generation of Xbox consoles.

These types of operational problems have been a major theme of 2020. Widespread stockouts and delivery delays due to sudden increases in demand have significantly damaged consumers’ trust in online shopping, with more than one in three consumers having been let down by an online order this year — and all of this has occurred before the peak shopping season. If online retailers are already encountering capacity issues, how will they deal with the impending influx of holiday shopping?

In order to survive and thrive during the holiday season, vendors must process online orders more quickly, more accurately, and in a manner which safeguards both their employees and customers. If they don’t, they risk errors and delays that will likely result in shoppers missing out on vital holiday deliveries, further damaging an already tenuous relationship between seller and consumer. 

Automation Should Top Holiday Wish Lists

Despite capacity being a major challenge, automation is being ignored as an investment priority, even though these technologies are essential for managing increased demand from a unique holiday season which will see a pronounced spike in online orders due to COVID.

In this climate, retailers and their warehouses need to maintain flexibility and scalability, as well as decrease their reliance on temporary or unreliable labor pools to meet operational requirements.

Automating retail workflows, from order processing to inventory and shipping, negates the need for a human presence in large parts of the warehouse. Not only does this safeguard employees from infection by supporting greater social distancing, but it also removes the risk of human error from these repetitive manual tasks, while at the same time ensuring that orders can be picked and packed efficiently and maintaining the productivity of the operation.

Automation also allows smaller retailers to add speed to their fulfillment, and close the gap on larger players, via fully automating sales orders, stock updates and distribution decisions. As a result, items can get out of the door quickly, even during the holiday rush.

Safeguarding Delivery is Key to Seasonal Success

Given the problems surrounding delivery that have already been encountered this year, and with the seasonal shopping surge upon us, capacity challenges are an impending threat for any business. There’s a real risk that shoppers’ might not get their items when they expect them.

One thing online businesses must do is try to safeguard seasonal deliveries to ensure families get holiday gifts on time, as expected. This means retailers need to find solutions to process e-commerce orders not only more quickly, but more safely, too. By strategically implementing automation into retail operations, supply chains can work continuously without having to delay deliveries and staying true to customer promises.

COVID-19 has accelerated the use of automation and shone a spotlight on existing business and retail models which may not have considered the use of these types of technologies before the pandemic.

However, as consumer habits continue to change and extend heightened demand outside of traditional "peaks," businesses need to be aware of their requirement to constantly evolve. A capacity crisis is looming. If merchants act quickly, however, automation can help reduce the strain so that nobody is disappointed on Christmas morning.

Derek O’Carroll is the CEO of Brightpearl, a digital operations platform for retailers and wholesalers with a clear mission to automate the back office so merchants can spend their time and money growing the business.