FEATURE Automated warehousing
Return to profit W
ith consumer spending under pressure and online return rates of between 20-30%, fashion retailers are facing a hit to margin that could ultimately undermine profi tability. As UK interest rates rise to levels not seen for 15 years, consumer discretionary spending is being squeezed, and for fashion retailers that means keener pricing will become a competitive necessity. Omni-channel businesses face an even greater challenge. The combined eff ect of reduced sales margins and persistently high returns rates, commonly between 20-30% in the online fashion sector, see profi ts at some fashion brands signifi cantly impacted. Clearly, fashion retailers need to act quickly to address the corrosive eff ects of these conditions on their overall profi tability. A return is very often a fast mover and is highly likely to be sold within three days, so why put it back into deep storage? Dynamic buff ers could provide the agility needed to turn returns around faster. Overhead pouch sortation systems off er a fl exible and highly scaleable, conveying, sorting and dynamic buff ering solution, appropriate for both fulfi lling ecommerce orders, assembling store-friendly sequenced replenishment and, most importantly, buff ering fast-moving returned items ready for a quick call-off for resale.
One pouch system is capable of sorting and processing many thousands of orders per hour, with each pouch able to carry both hanging garments and fl at items, such as shoes and fl at pack goods, enabling fast order fulfi lment from a single pool of inventory that serves both retail stores and online orders. Effi ciencies in accessing available stock, greater fl exibility in allocating stock to maximise sales and faster processing times for preparing orders, are just some of the key advantages. Critically, pouch technology lends itself to effi cient returns processing. Overhead dynamic buff ers can
automationmagazine.co.uk
By Darcy de Thierry, Managing Director of Ferag UK
off er a cutting-edge solution to removing the time, cost and eff ort of placing returned items back into stock. Manually sorting and placing items back into deep storage is a very time- consuming and costly process, which in large organisations can involve thousands of items. For high-demand fashion products, keeping
returned items in a buff er close to the packing area enables a quick and effi cient re-despatch of the item. In fact, some retailers anticipate and predict their levels of returns, allowing them to re-sell items even before they are
returned to the warehouse. Such techniques help boost sales in a tight, fi nite window of opportunity.
An obvious advantage of a high-speed pouch solution, such as Ferag’s Skyfall, is that it uses available overhead space – the third dimension of the building – keeping fl oor areas free for pedestrians and other processes. What’s more, pouch systems are a highly cost-eff ective alternative to other forms of goods-to-person automation, like multi-shuttle and mini-load solutions, that can cost up to 30% more.
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Automation | September 2023 33
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