Ecommerce retailer and director of Vape Club, Dan Marchant, provides his insight on what you need to know.
According to ONS data, total online retail sales increased by 46.1% from 2019 to 2020, the highest annual growth reported since 2008. The demand for warehouses in the UK has rocketed along with the surge in ecommerce. So, how can you optimise your businesses to stay on top of this demand while adhering to the ongoing Covid safety restrictions that remain in place as the nation starts to open again?
Dan Marchant, director of Vape Club, saw an unprecedented growth in sales during lockdown, peaking at nearly 300% above their normal run rate. He was able to refine his operations from his warehouse in Watford, leading to his business receiving praise from reviewers who were delighted with the fast shipment and efficient service.
Here he provides his insight on how other companies can continue to grow alongside increasingly higher expectations to stay on top of warehouse demand:
Warehouse and employee management
Dispatching 2-3 times the usual orders while maintaining social distancing rules proved to be a real challenge, and it was necessary to shift the warehouse layout so that picking and packing zones were in separate areas.
This minimised crossover contact between workers by restricting the picking team to one area and the packing team to another. We were able to utilise unused areas of our warehouse to install additional packing desks which were spaced over two metres apart and had plastic sheeting separating each area.
Of course, if anyone was able to work from home we encouraged them to do so, in order to create even more space in the warehouse itself. By moving a large chunk of our office staff to home working we could bring in additional warehouse staff into the building without making it feel cramped.
We also implemented a one-way system in the warehouse for
the pickers, meaning that all traffic flow was in the same direction and that
pickers could maintain physical distancing of two metres easily without
disrupting productivity too much.
We were able to ensure picking lists would print in the correct order of the aisles, so that the team did not have to do multiple laps of the warehouse in order to pick one order. Very high volume SKUs were spaced out appropriately, and had secondary positions put in place, so as to eliminate bottlenecks and hold-ups as much as possible.
Keeping one step ahead
Space and supply have provided two of the biggest challenges in scaling up the Vape Club warehouse to meet demand. When business more than doubles overnight it’s hard to keep up. Fortunately when it came to the pandemic we could see the direction the wind was blowing before lockdown actually occurred.
Working as closely as we do with suppliers in China, we were aware of it before it was considered serious in the UK. We had already started to bolster supply, and moved from a six-week order pattern to 12 weeks because we were worried about supply continuity. This eventually meant we were not overstocked but had to work very hard and fast to keep up with supply.
Maintaining a safe environment
Ensuring a Covid-secure workplace means looking at every
aspect of the space – and every part of the working day. Staggering break times
helps to ensure canteens and break rooms are not overcrowded and staff can
physically distance (also it’s a good idea to limit the seating and clearly
mark where people can sit).
Keep the building very well ventilated. We keep shutters open as much as possible to allow the fresh air to circulate. If possible, designate a separate entrance and exit, so people leaving the building do not have to cross paths with people entering the building. Put hand sanitizer everywhere!
Being unable to employ more people within the warehouse in order to meet demand created a headache for the business and required some creative solutions.
We were doing more business than ever, but had to reduce the number of people in the warehouse at any one time to be able to ensure we kept to the physical distancing guidelines, and the other Covid precautions. And when you have set collection times from couriers, there is always a very concrete deadline.
There were two ways to manage – finding more space and getting creative with shift patterns. We were able to run the warehouse from much earlier in the day, and increase the operating hours. This meant we could keep to the maximum number of staff at any one time, but gave us the additional hours to cope with the increased volume.
Using warehouse technology
We rotate our stock 10-12 times per year, so that means a lot of inbound deliveries from suppliers and a 2-week order cycle with 150 other suppliers. This can create a lot of admin overhead to manage the purchase orders, ensuring you are buying the right amount of stock without running out or overstocking.
We have developed a suite of bespoke stock management tools to help us automate ordering of products based on patterns, highlighting any anomalies in sales patterns so the purchasing team can react proactively. All purchase orders are managed through the ecommerce platform which gives full visibility of stock movement to finance, management, warehouse and customer service.
Stocking in deliveries can often take a long time and creates an opportunity for data entry mistakes. We have a single click stock-in option, meaning if the delivery matches the PO then we can stock all the items in one go.
Smoothing supply chain operations
Optimising supply chain operations allows you to plan for surges in orders ahead of time, as well as establish a strong collaborative relationship with your suppliers to ultimately meet customer demand.
Stock takes, stock purchases and sourcing of packaging supplies have all stretched our existing teams during the last year. Instead of relying on one supplier for a range of products, we often had to buy from three or more suppliers at different times of the month and all with different prices.
In order to ensure we always have enough stock to meet demand and keep our supply chain operations running smoothly, we use proprietary stock movement and monitoring APIs that show us daily and weekly sales per stock keeping unit. The purchasing teams then use these bar charts to see what increases or decreases we’re seeing in product sales and buy the correct amounts.
Prioritising the customer experience
Whilst warehouse management, supplier concerns and looking after staff are all hugely important components of keeping an ecommerce business afloat and thriving, your business wouldn’t exist without customers. It is crucial to set up systems so that customers can get the information they need and have their questions answered at all points in their purchasing journey.
There is nothing worse for a business than to see an influx in sales for the short-term, but not being able to retain those customers. Our mission during covid has been to ensure that all new customers get to experience the usually high levels of service we provide. This means customers can speak to us via telephone, live chat and email during working hours and orders are dispatched the same day if the order is placed before 7pm. In order to maintain those levels, we had to quickly recruit and train a number of new customer service operatives to bolster our team and continue the high levels of service.
Customers are your best marketing asset, especially in an industry like ours where PPC (Pay Per Click) advertising is prohibited. Our loyal customers referred a lot of their family, friends and colleagues to Vape Club once the stores locked down. The customers knew they could confidently recommend our service as we’ve looked after our customers for many years.
Identifying what works in the long run
Some of our changes will remain in place and some won’t. For example we will be sticking with the split shifts as this really allows for additional growth in the future, and we’ll keep the hand sanitising stations as hygiene is always a good thing. But people are social beings, and the physical distancing is both unnatural, and impractical in the long run, so when it is safe to do so we will not continue with the distancing measures.
The warehouse layout changes have also been very positive, and although we may not have to stick to the one-way system so rigidly it works well, and will stay in place.