How Can FMCG Survive 2019?

How Can FMCG Survive 2019?

While low unemployment is generally a good thing, current levels – the lowest for more than forty years – are beginning to pose a serious threat to the FMCG sector due to a shortage of skilled workers. Research conducted by the British Chambers of Commerce in January 2018 reported that 71% of recruiting companies in the services sector are struggling to fill the gaps in their staff with workers who have the right skillsets. In response to this report, the BCC called on UK businesses to train and invest in people while recognising that Government needs to provide the stimulus that will give companies confidence to go for growth.

As we begin a new year with Brexit still very much unfinished business, it remains to be seen what additional impact this will have on the economy. One aspect that will certainly exacerbate the current situation is any large-scale departure of non-British workers who form a large part of this labour pool.

Death of a (High Street) Salesman

The rise and rise of ecommerce is however another significant factor, ironically leading to the slow death of the very companies that themselves threatened the traditional high street of smaller, independent retailers. Outlets are increasingly evolving into sparsely-stocked showrooms playing second fiddle to dark stores. In November 2018 the Retail Gazette warned that over 200 shopping centres throughout the UK are on the brink of administration.

In July 2018 the BBC reported that ‘nearly 22,000 jobs have been hit on the UK’s struggling High Streets this year’. How effectively will employers be able to retrain retail assistants with their wealth of experience in interpersonal skills for the fast-paced, impersonal world of order fulfilment?

Upping the E-commerce Game

Retail must however keep listening and responding to its customers if it is to succeed in this arena, and the online customer may prove to be every bit as demanding as their high street predecessor.

In 2016, shipping costs landed Amazon with a $7 billion deficit between how much they charged for shipping and how much it cost them. What might that amount be if we were able to look across all ecommerce globally?

Some of this is attributed to ‘binge shoppers’ – customers who habitually over-order, confident in the knowledge that generous returns policies will bear the burden of sending back any unwanted goods. But it would be naïve to suggest that this is the only reason, and that the shopper is to blame. What about items returned because they have been picked incorrectly, packed inadequately or shipped carelessly? What about items returned simply because they didn’t arrive within the stated period?

In June 2017 research by Citizens Advice reported that 69% of online shoppers had parcels lost, damaged or turn up late in the previous twelve months. More than 10% received damaged items and 38% had parcels arrive late; 16% had even paid for premium delivery service.

Understaffing and peak periods place pressures on retailers that can easily lead to human error, but the good news is that by using workflow design to streamline order fulfilment operations and advanced packaging systems to protect consignments, companies can increase productivity without increasing headcount and profitability without increasing packaging costs and volumes.

Pacplan® Technik™ is an entirely bespoke design and build service developed by Southgate® to maximise operational efficiency in the order fulfilment sector. Pack stations containing ample storage for packaging materials,  tools and accessories are integrated with conveyoring systems and automated or semi-automated case taping, void fill, shrink wrapping and strapping systems to create efficient environments that deliver the Pacplan maxim – ‘everything to hand’.

Southgate® supplies a wide range of packaging and order fulfilment systems, tools and consumables through its network of approved distributors throughout the UK and across Europe. To register your interest in improving FMCG efficiencies in the order fulfilment process, please contact sales@southgate.eu.com.