Baseball icon Yogi Berra is often credited with saying, “It’s tough to make predictions, especially about the future.” This is particularly true for the warehouse operations at the core of e-commerce, omnichannel and store fulfillment. The longstanding acceptance that change is a constant has taken on a new meaning in retail, and across the consumer goods, fashion and food sectors in recent years.

The pandemic dramatically accelerated e-commerce adoption, even in the grocery sector once considered immune to the online shopping boom. This was followed by an overt decrease in e-commerce activity as shoppers returned to stores, then a return to stasis — one in which most consumers are omnichannel buyers and online sales growth continues to accelerate, but at a fairly regular pace.

Now, distribution and warehouse professionals face another challenging period, as consumer behaviors change faster than ever before. According to McKinsey, some buying behaviors are “diverging in paradoxical directions.” Sajal Kohli, a senior partner at the firm, notes that “shoppers who splurge in some categories may seek value in others, which means companies must develop a detailed and nuanced understanding of trends and segments.”

There are, of course, more overt examples that supply chain professionals and fulfillment leaders must keep in mind to adapt to the changing needs of the retail brands they serve. Marketing campaigns, including those with influencers, can create exploding demand for a specific SKU or product line overnight. Fast fashion is accelerating to faster fashion, and generational differences are creating even greater uncertainty, requiring brands to scrutinize their fulfillment strategies in even more detail. Social media is playing an important role in Gen Z shoppers’ efforts to find new products, particularly for health and beauty items. 

What, then, can be done to ensure that warehouse operations can support these increasingly changing, and at times seemingly unpredictable, consumer needs? Automation remains part of the equation, particularly in the face of a constrained market for warehouse labor that shows no sign of abating. But what steps and strategies should be taken to optimize the use of such technology?

Following are some recommendations that apply to virtually any retail brand, as well as operations that stock retail stores, or fulfill e-commerce or omnichannel orders. All enable retailers to hedge their consumer behavior bets by using automation to enhance agility, flexibility and scalability.

Ensure that warehouse operations are represented at the executive table. Warehouse and distribution leaders should be closely involved in discussions with marketing teams that oversee campaigns that can influence which SKUs are fast movers. Ideally, these will then be staged for their optimal movement in and out of warehouses and distribution centers. They should also engage in conversations that chart the brand’s larger expansion efforts and progress. For example, is senior executive leadership expecting the brand and its stores — online and brick-and-mortar — to see significant expansion in the next year, five years, 10 years? Warehouse and distribution leaders should also be continually apprised of any business intelligence and data that offers insight into facility throughput, location of new stores, and other considerations that impact warehouses’ ability to deliver against the customer promise.

Strive to flatten peak buying periods. While retail requires brands to drive sales whenever possible, the ability to offer peak season holiday sales earlier or later than usual— enables fulfillment operations to run more efficiently. It must also never be forgotten that fulfillment performance is an important contributor to customer satisfaction.

Approach warehouse and distribution center investments in a modular fashion. A comparatively small warehouse facility, including modernized brownfield sites, that can handle increased throughput and storage requirements takes a year to complete. By contrast, the design, construction and deployment of a larger distribution center can take two to three years. In all cases, leaders should consider modular approaches that enable the brand to add capacity, including new shuttles and lifts for automated storage and retrieval systems, additional robotic pickers and pick stations, new conveyors and sorters, and other required components.

Determine what the minimal, viable material-handling and fulfillment system looks like. If demand or macroeconomic forecasts leave more questions than answers about the projected future state, leaders should ask themselves what kind of automation will address their present and future needs. When looking at smaller facilities or modernizing brownfield sites, new autonomous case-picking robots that utilize simple racks can be installed relatively easily in existing buildings in a matter of weeks. Also of value are temporary measures such as autonomous mobile robots. Notably, when constructing larger greenfield facilities, the automation should be designed first, with the building designed around it.

Taking these steps can help organizations settle on the right automation strategy. They can also address the paradoxical consumer behaviors that must be considered in brand expansion efforts, the expansion or rebalancing of the retail footprint, the launch of new product categories, and campaigns to increase sales.

Retail success has always required leaders to look ahead and anticipate what consumers want, and when. It will never be an exact science, but by being involved, striving to find the right data, creating strong lines of communication across the brand, and investing in the right automation at the right time, warehouse leaders can rest assured that their facilities and operations are up to the challenge — regardless of which bet on consumer shopping behavior ultimately pays out.

Andy Lockhart is director of strategic engagement, warehouse solutions, North America, at Vanderlande.