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Keep pace with online drink orders

03 January 2024

It’s crucial to manage cashflow and fluctuating demand even as deeper trends point to continued growth in the online alcohol market, says Dionne Redpath, making shared user automation an enticing solution.

ACCORDING TO the recent eCommerce Strategic Study 2023, published by International Wine & Spirit Research (IWSR), alcohol eCommerce sales will reach $40bn by 2027.

While the growth of the online drinks market in 2023 is slower than during the pandemic – when lockdown caused online sales to soar – it has continued to outpace that of drinks sales in the on and off-trade markets. At a time when companies are grappling with fluctuating consumer demand, businesses need the ability to cost-effectively scale up and down at pace to deliver great customer service while improving accuracy, efficiency, stock and cashflow management.

The IWSR’s report implies that the value of alcoholic drinks ecommerce will increase by $7.5bn over the next five years, despite turbulent economic conditions. While this should result in steady sales growth, online brands will be expecting fluctuating peaks and troughs in demand as the cost-of-living crisis persists.

To make it easier for these drinks brands to tap into scale as and when it is needed, British 3PLs are waking up to the importance of implementing strategies to drive innovation in order fulfilment. At Europa, we've designed a shared-user automated system which enables brands with broad SKU ranges and a volatile, complex order profiles, to cut fulfilment costs and transform pick accuracy.

With robust quality control processes to prevent picking errors and reduce costs, a shared-user system can be quickly scaled up or down to meet fluctuating demand. In turn, this allows for accurate financial modelling and drives a high level of predictability.

Europa Warehouse is a £60m 3PL facility and one of only a few in the UK offering a shared user warehouse, where one facility can provide state-of-the-art technology to multiple businesses. Automation within the 3PL sector is not new but for many years has only been available to those with deep pockets, or those who are prepared to sign up to extra-long contracts with their service provider.

In 2022, Europa picked 17.2 million units through its automation system - regularly scaling from 40 to 100,000 individual picks in 24 hours with minimal additional resources. Shared-user automation provides a low-cost, less time-intensive solution, which can help ecommerce companies reap the benefits of automation. 

“Our shared user automation is extremely attractive because brands can access it without having the pain of the upfront investment associated with a bespoke solution.”

While being an excellent option for increasing throughput, Europa's bonded status also allows brands to better manage tight cash flows.

Our shared user automation is extremely attractive because brands can access it without having the pain of the upfront investment associated with a bespoke solution. Added to which, both our manual and automated processes handle bonded and non-bonded product equally effectively, even going as far as selecting duty paid product for picking, ahead of duty suspended product.

This is a real benefit because customers can build stocks in preparation for peak without having to outlay hefty duty or VAT payments until the goods are sold. This is brilliant for cashflow and brands like online beer retailer Beerwulf, cocktail company FUNKIN, and premium boxed-wine provider, Laylo, really enjoy the benefits this brings.

The combination of existing automated fulfilment technology and duty management processes really allows ecommerce brands to optimise resources, simplify operational models and capitalise on the sales and growth opportunities afforded by the peak season - with no hassle or fuss.

Dionne Redpath, COO and head of warehouse, Europa Worldwide Group

For more information, visit www.europa-worldwide.com

 
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