Special occasions like Black Friday and Cyber Monday or public holidays such as Christmas and Easter are not only a challenge for retailers and suppliers, but also require particularly high organisational skills of logistics experts. In the end, it is all about calculating the number of orders that consumers are likely to place as accurately as possible in advance and making the necessary personnel available to cope with the situation. This is the only way to ensure that customers receive the goods they have ordered online within a few days. And retailers at high street outlets regularly require new supplies for their stores too.
The Christmas business is traditionally the most lucrative time of the year for retailers. Toy and book sellers generate about one quarter of their annual turnover in November and December.1 Despite having access to numerous types of entertainment, more than 27 million Germans will still pick up a book at least once a week in 2022, claims Statista.2 But how is it possible to deliver all those books on time when orders at Christmas suddenly skyrocket?
Hörselgau, in mid-November 2022: the calm before the storm is the best way to describe the Rhenus Warehousing Solutions logistics centre. ‘Everything’s focused on the three weeks before the 24 December here,’ says Branch Manager Florian Schneider, explaining the situation. The Christmas business represents the peak season for this warehouse centre. During this time of the year, twice as many workers are needed compared to the annual average in order to handle the high volume of orders.
Most of the business at the warehouse involves printed books, e-books and gifts which are available for sale at bookshops. The logistics warehouse has been operating as the central warehouse for a renowned book retail company for many years. The logistics expert supplies stores in Germany, Austria and Switzerland from here – and this now involves about 450 shops. Then there is omnichannel business, i.e. if customers order books that they wish to pick up themselves from a store. Florian Schneider and his team also handle the logistics operations for online orders. As a result, several hundreds of thousands of items and tens of thousands of transport units leave the warehouse in the Federal State of Thuringia every day.
In order to enable smooth processes, the logistics centre switches from two-shift to three-shift operations during the Christmas season. Employees process incoming orders round the clock six days a week. It is then possible to process orders within very short time frames and quickly prepare books, gifts and e-readers for delivery in the outgoing goods section. Stores can still order books the evening before and receive them the next day. ‘The high season continues until one day before 24 December. Goods continue to be supplied to the stores, where they are sold on Christmas Eve,’ Schneider explains.
In addition to classic warehouse logistics, picking, packing and customs clearance, the services provided for the book trade include value-added services such as marking prices, wrapping items in foil and combining packaging units. The range of items not only includes hard and soft covers, but also gift items and e-readers. The centre in Hörselgau refurbishes devices and installs software updates for this purpose.
However, when exactly does the planning work for the Christmas business start? ‘We began our preparations just recently, at the beginning of November,’ Florian Schneider explains and adds with a grin on his face, ‘However, not for this year, but for the Christmas season in 2023!’. This involves examining internal processes and finding opportunities to continue optimising the company’s own systems in order to be able to handle the growing business at the logistics centre in the best possible way and makes things simpler for employees. New storage or conveying equipment such as Autostore or shuttle system warehouses sometimes require even longer preparation phases before they can be introduced because of longer delivery lead times.
The business site has already been physically expanded on several occasions: it started operating with two buildings in 2011. After its capacity had soon been exhausted, another building was constructed in 2015 and larger reconstruction work took place in 2017. Deliveries of board games are now handled at Eisenach nearby for growth reasons. In addition to increasing warehouse capacity, the company has pressed ahead with automating work stages because high levels of automated processes simplify logistics operations – from incoming orders to outgoing goods. The most recent investment – which just arrived a few weeks ago – involves 275 autonomous robots. They are about to experience their baptism of fire.
The robots are designed to support the picking process in future. They increase productivity by shortening the distances that the pickers, who normally remove the items from the shelves, have to walk. Thanks to the technology that has been built into them, the robots move completely autonomously from storage area to storage area to the relevant pickers. The pickers can see on the tablet, which the robot carries with it, which items they need to take off any particular shelf and then place the items in the basket, which is a reusable container. The warehouse coordinates and a colour code are also displayed for this purpose. Employees therefore no longer need to carry a hand-held device and picking racks with them. The robot scans the products and then prints the correct label for the price. It also takes into consideration specific features for different countries and special prices that are indicated by different colours.
In addition to shortening the distances that employees have to walk, robots introduce other benefits because warehouse workers normally have to undergo training to operate industrial trucks. Thanks to the support offered by the robots, all they now need is picking training; a forklift licence is no longer absolutely essential. Once the robot has printed the price and the picking process has been confirmed, it travels to the conveying equipment and unloads the box there. The box then makes its way to the sorter in the outgoing goods section via the automated conveyor technology. ‘We offer the stores a sorting service according to genres or segments. As a result, all the thrillers, cookery books or novels, for example, are sent in bundles. This makes it easier for the book retailers to sort the items in the shops at a later stage.’
Efficient processes and modern technology are not the only keys to success, however. ‘Careful personnel planning is just as important for success in this seasonal business,’ Florian Schneider reveals. Once the peak period starts, enough trained employees need to be available. The personnel planning work therefore starts as early as the summer. This involves making seasonal workers an attractive offer. ‘It’s very important for us to know that all the employees feel they are part of what’s going on and feel valued. That’s why we have a trained onboarding team and place great importance in having a welcoming atmosphere; we make flats and shuttle services available and provide training for the staff in various languages.’
A forecast is used at the start of each year to provide some estimate as to the way that the business year will probably develop. The data is updated continually and this supports the logistics specialist in the planning work. It is also important to be able to respond to changes in the market situation in a flexible way. Store business accounted for a large share of the number of orders before the COVID-19 pandemic, but online orders increased rapidly during the two COVID years in 2020 and 2021. ‘We adapted our processes within a short time and, for example, significantly increased the number of packing tables,’ Schneider explains. The proportion of online orders has declined to a certain degree in 2022, but is still much higher than before the pandemic.
Source: EHI Retail Institute3
Total turnover for the publishing house and book trade rose by 3.5 per cent in 2021. However, the German publishing trade association (Börsenverein des Deutschen Buchhandels) reported in the middle of the year that the past few years had created huge challenges for the sector.4 Supply bottlenecks are not the only problem – inflation, global crises and the aftershocks of the COVID-19 pandemic are complicating any forecasts for the 2022 Christmas business. However, the book trade in particular could benefit from lower Christmas budgets because of its comparably moderate prices. The expectations for this year’s Christmas business in Hörselgau are therefore high. ‘We assume that there will continue to be some demand for books, games and gift items. If things continue as they’ve done so far, we‘re expecting strong Christmas business in 2022.’
The peak season in Hörselgau has been successfully completed every year by the beginning of January. Then comes the time when some return their B2C packages – but the branch in Meerane handles the returns from stores. Florian Schneider, on the other hand, is already preparing for the 2023 season and dares to predict what might happen next year. ‘I assume that our business will involve more small packages in the long term, that is to say, less bundling together of packages for each ordering process. Looking at the book trade, I also believe that platform concepts will be a success story. What this means is that independent retailers will also be able to access the product range and network of large book trade chains – and that suggests further growth potential for us.’
Florian Schneider is already convinced about one thing. If this year’s Christmas business goes as planned and the newly introduced autonomous robots successfully support the employees in their picking work, this should further increase productivity and create the conditions for posting double-digit growth in Christmas business in 2023.
1 | Cf. EHI Retail Institute (handelsdaten.de): “Weihnachten – Daten und Fakten zum Verbraucherverhalten zu Weihnachten”, at: https://www.handelsdaten.de/handelsthemen/weihnachten (accessed on 25 Nov. 2022)
2 | Cf. Statista: “Anzahl der Personen in Deutschland, die Bücher lesen, nach Häufigkeit von 2018 bis 2022”, at: https://de.statista.com/statistik/daten/studie/171231/umfrage/haeufigkeit-des-lesens-von-einem-buch/ (accessed on 25 Nov. 2022)
3 | Cf. EHI Retail Institute (handelsdaten.de): “Weihnachten – Daten und Fakten zum Verbraucherverhalten zu Weihnachten”, at: from the same source. (accessed on 25 Nov. 2022)
4 | Cf. Börsenverein des Deutschen Buchhandels: “Der Buchmarkt in Deutschland: Buchhandlungen und Verlage erfolgreich in der Pandemie, aber von neuen Krisen herausgefordert”, at: https://www.boersenverein.de/presse/pressemitteilungen/detailseite/der-buchmarkt-in-deutschland-buchhandlungen-und-verlage-erfolgreich-in-der-pandemie-aber-von-neuen-krisen-herausgefordert/ (accessed on 25 Nov. 2022)
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