COVID-19 has changed the future of retail: there's plenty more automation in store
25 June 2020, Written by Gary Mortimer, Queensland University of Technology; Jana Bowden, Macquarie University; Jason Pallant, Swinburne University of Technology; Louise Grimmer, University of Tasmania, and Martin Grimmer, University of Tasmania
欧洲杯在线投注 Australian supermarket giant Woolworths has announced its in logistics infrastructure, spending A$780 million to replace up to 1,300 workers with robots.
欧洲杯在线投注 It plans to build one semi-automated and one fully automated distribution centre in south-west Sydney. About will be created at the new centres, to open in 2024. Three existing centres (two in Sydney, one in Melbourne) will close as a result.
欧洲杯在线投注 Woolworths' chief supply chain officer, Paul Graham, emphasised of automation:
In these COVID-conscious times that's the obvious spin.
But it's true this is a response to the changes being wrought on the retail sector by COVID-19.
The principal change is a matter of pace. COVID-19 has turbocharged the shift to online shopping. Even as social-distancing rules ease, this trend will consolidate. Many bricks-and-mortar shops are in trouble, particularly those in shopping centres.
Retail will also be shaped by how COVID-19 has changed our shopping behaviour, with thrift and value being important.
Shopping online is the new norm
In April, 5.2 million Australians shopped online, according to Australia Post's . The Australian Bureau of Statistics estimates those sales were worth A$2.7 billion, , compared with 7.1% in March 2019.
This exposed weaknesses in retailers' . For example, crushing online demand meant both Woolworths and major rival Coles temporarily their online shopping services.
欧洲杯在线投注 More automated fulfilment centres are part of meeting these online demands. Of course, such investments were already on the radar.
欧洲杯在线投注 In March 2019, Coles announced to use the "end-to-end online grocery shopping solution" developed by Ocado, a British online supermarket chain that has no stores, only warehouses. Its technology spans the online shopping experience, automated fulfilment and home delivery.
The Coles plan included two new "highly automated" customer fulfilment centres in Melbourne and Sydney, to be ready in 2023. Coles also announced plans for two new automated distribution centres in Queensland and NSW, costing A$700 million, .
Woolworths itself has already opened the Melbourne South Regional Distribution Centre, whose automated features are hyped in the following promotional video.
So these latest moves are part of a trend, albeit one unexpectedly accelerated by COVID-19. And once consumers try new channels, show, they are likely .
The future is dark
欧洲杯在线投注 At the other end of the supply chain, the shift to online shopping has created demand for "" essentially, stores without customers. These smaller, decentralised facilities, located in suburbs rather than industrial parks, are designed to pick and dispatch online orders quickly.
Woolworths opened its first dark store . opened its first in Melbourne in 2016. Existing stores are also being repurposed as dark stores. In April 2020, Australia's Kmart temporarily converted three stores to use .
欧洲杯在线投注 Such moves may become permanent, as shoppers demand faster delivery times and physical store assets become less viable as "traditional" retail businesses.
Existing stores are also being adapted to respond to customer demands for faster, more efficient online shopping. In January 2020, Woolworths began building its first "" - an automated facility adjoining its supermarket in Carrum Downs, Melbourne.
Fewer, smaller stores
As online shopping increasingly provides greater revenue streams for retailers, more physical store closures are also on the cards.
In May, Kmart's owner, Wesfarmers, announced it would of its Target stores (and convert the rest to Kmart stores). Also looking to downsize are Australian department store icons and David Jones, which have accelerated their plans to reduce floor space .
欧洲杯在线投注 Footwear giant Accent Group which owns more than a dozen shoe brands and has more than 500 stores in Australia and New Zealand is planning to close and focus more on online sales.
As online revenues grow, expect more "right-sizing" and closures.
Repurposing shopping centres
欧洲杯在线投注 All these closures will add to the woes of shopping centres.
欧洲杯在线投注 Though crowds reportedly back to centres when "lockdown" restrictions were eased, growing awareness that the pandemic is not over and social distancing protocols continue to .
Until people feel safe shopping, dining and gathering in crowded public places, will remain.
In response to these COVID-conscious times, shopping centres will endeavour to enhance those aspects of the shopping experience, such as sensory elements and entertainment, which the online shopping experience can't provide.
欧洲杯在线投注 The retail mix will change: fewer fashion and general merchandise shops, and more services such as medical centres, offices and childcare centres.
Opportunities for smaller retailers
One bright spot may be for local and independent shops.
Smaller retailers can often adapt faster than larger ones. Smaller community pharmacies, for example, implemented social distancing and hygiene measures more easily than larger retailers, due mainly to their smaller size and having less traffic.
There are opportunities to leverage shoppers' desire to local shopkeepers, producers and growers. Locally made goods and services are also less likely to have long supply chains that will impede overseas deliveries while COVID-19 is uncontained.
But they'll still need to sort out their online shopping experience.
This article is republished from under a Creative Commons license. Read the .
Author: Gary Mortimer, Queensland University of Technology; Jana Bowden, Macquarie University; Jason Pallant, Swinburne University of Technology; Louise Grimmer, University of Tasmania, and Martin Grimmer, University of Tasmania