3 Tips for Retailers to Address Demand Surges
Consider a Different Way
The great American scientist and inventor, George Washington Carver, is probably most famous as the inventor of peanut butter (which is a shame because he wasn’t). He was, however, a tireless promoter of peanut products as a way of helping poor farmers in the post-Civil War American South.
Dr. Carver recognized that decades of growing only cotton and tobacco had been a way of life, but it had dangerously depleted nutrients in the soil. He introduced the concept of systematic crop rotation to rebuild the soil and provide additional cash crops for farmers.
As we move past the peak of this current crisis, retailers, too, should start rethinking their processes, especially their distribution models. In the recent past, a single, giant distribution center feeding dozens of stores made excellent business sense and was the model of choice. But now — in addition to the current crisis, growing trends include smaller stores and increased urbanization — that model may not be the best fit for all cases.
The need for increased speed and flexibility is pointing many retailers toward hub-and-spoke models where order fulfillment is more dispersed and automated. Instead of a rigid, top-down hierarchy, orders can be handled more nimbly across large and small distribution centers, as well as omnichannel fulfillment from in-store stock.
Hub-and-spoke models include dark stores and micro-fulfillment centers that can address unplanned surges in demand and be quickly converted, for example, from online fulfillment to immediate in-store fulfillment.
From Darkest to Finest
Again, these are extraordinary times. But we find inspiration and insight in the diversity of past challenges. And for the retailers who step up to become the leaders, who look for advantages, and who consider a different way, they may well look back one day and say (to paraphrase Churchill), “this was our finest hour.
Mohamed Ali Vaid is vice president of commercial acceleration at Dematic, an intralogistics company that designs, builds and supports intelligent, automated solutions for manufacturing, warehouse and distribution environments.