A Beautiful Solution: Automating Fulfillment for Health & Beauty Retailers

At AutoStore, we talk to a lot of health and beauty companies that I can broadly categorize into two distinct types. The first are the forward-thinking that challenge conventional boundaries, strategize for the future, engage the appropriate stakeholders proactively, and prioritize actionable recommendations over rigid requirements. The second type tends to be risk-averse and struggles to surmount obstacles, hindering immediate action. It's the first category that can gain a notable competitive advantage and harness the untapped potential a warehouse automation system holds.

Navigating safety concerns

One of the biggest roadblocks we typically encounter with a risk-averse company is insurance. Products such as hairspray, aerosol cans, and alcohol-based liquids are considered more hazardous and may pose a higher fire protection risk. Underwriters, whose job is to mitigate risk, are understandably concerned about insuring businesses that carry these types of products.

But our experience collaborating with cosmetic retailers has revealed a surprising trend: the proportion of disqualified products in the overall product mix is often considerably smaller than initially presumed. This discovery has enabled us to effectively separate compliant and flammable products in an AutoStore Grid. Realizing that AutoStore can overcome safety hurdles, the companies have demonstrated a remarkable talent for implementing creative solutions through effective system planning, design, and stakeholder approval processes.

Here are three effective approaches that have worked for these brands and were approved by some insurance companies:

• Construction of a dedicated, separate compartment within the Grid infrastructure: This compartment serves to isolate noncompliant inventory from the compliant product mix. It incorporates fire-proofing measures such as a blast-proof concrete shell, fire gate closures, and eventually specific fire protection systems.
• Creation of a sealed environment using oxygen reduction systems: An enclosure is built around the AutoStore installation to reduce the oxygen level in the enclosure. The oxygen level is kept constant at the lower limits to prevent fires.
• Integration of high-expansion foam generator systems on the Grid infrastructure: These systems prevent or restrict the access of air to a fire, thereby minimizing its spread or impact.

Why AutoStore is ideal for health & beauty brands

All these techniques are risk-engineered and commercially viable applications. They offer significant value by enabling cosmetic companies to achieve their objectives and unlock their supply chains through improved efficiency, accuracy, and sustainability.

Once safety concerns are addressed, AutoStore becomes an ideal solution for the health and beauty space. Why?

• Perfect fit for light and small goods: Health and beauty products are typically compact and lightweight, making them an excellent match for AutoStore Bins. These products can be efficiently compartmentalized within partitions to maximize density in each Bin.
• Simplified fulfillment complexity: Customer orders in the health and beauty sector often involve multiple items, leading to picking challenges and complexities during the consolidation and pack-out process. AutoStore minimizes the number of touch points in a warehouse operation, streamlining the picking process and improving efficiency.
• Cost-effective piece-picking: Piece-picking, which involves fulfilling items from a master package and bundling them with other products, is one of the most expensive processes in manual fulfillment operations. AutoStore mitigates this issue by automating the fulfillment process, reducing costs associated with piece-picking.
• Streamlined fulfillment of product samples: Product sampling drives stock-keeping unit (SKU) proliferation, which can be burdensome for warehouse employees in a manual environment. AutoStore streamlines the fulfillment of samples by grouping like-samples within the same Bins, improving efficiency and accuracy. For example, one AutoStore health and beauty customer creates their product sets and seasonal/holiday-specific packaging directly at the storage system.  
• Store-friendly totes: AutoStore enables the creation of store-friendly totes, allowing in-store employees to easily replenish product shelves without the need to search for the right location. This reduces travel time and improves overall efficiency.
• Optimized slotting process: With expertise in the health and beauty category, AutoStore recognizes the distinction between popular items ("fast-movers") and less frequently ordered products ("slow-movers"). This insight enables better optimization of the slotting process, reducing time spent searching for slower-moving Bins and improving overall system velocity.

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Meeting evolving industry trends

In addition to the benefits listed above, AutoStore helps health and beauty brands beep up with emerging trends.

Industry growth

Beauty Independent cites a study that forecasts significant growth in the health and beauty category over the next four years despite a projection that momentum in 2023 will be softer. The time to make decisions is now to prepare for the road ahead. To prepare for the projected growth, AutoStore offers a modular system that provides scalability and flexibility. Customers can expand their operations confidently, knowing they can maintain impressive uptime and performance without disrupting their operations. We work with you to develop a system that meets your present needs while being ready for tomorrow.

Emergence of e-commerce

As detailed in this Internet Retailing report on the health and beauty segment, the pandemic accelerated a shift from traditional buying in brick-and-mortar stores to e-commerce channels. Historically, the beauty segment had lagged other retail categories in terms of digital adoption; firms are investing heavily in digital technologies to cater to the growing demands of online shoppers and gain a competitive edge. AutoStore specializes in efficient each-picking for light and small goods, catering to direct-to-consumer fulfillment. We collaborate with clients to optimize order picking methods, ensuring efficient and accurate fulfillment of customer orders as e-commerce becomes more prevalent. In times of unpredictable events like the pandemic that led to sudden growth in e-commerce, distributors may be worried about the future development of their fulfillment strategy. Adding an AutoStore can help increase capacity and performance without having to worry about relocating an operation to a greenfield site.  

Product differentiation and expansion

McKinsey recently published a beauty market report that indicates growth projections are attracting new market entrants, so existing brands must make differentiating choices to stay ahead of the competition. This disruption will create an expanded range of new products across an array of channels and markets, forcing incumbent brands to double-down on omnichannel strategy to reach the larger audience. AutoStore believes that an increased product mix justifies investing in an automated storage and retrieval system (AS/RS). As health and beauty organizations expand their product offerings, AutoStore can help by freeing up storage space and improving warehouse productivity, allowing brands to balance complexity and scaling costs effectively.

Shift in consumer demand

Adobe notes that consumers, empowered by digital transformation, are becoming more informed and seek experiential aspects in their shopping journey. This places new demands on supply chains. AutoStore offers a variety of solutions for health and beauty retailers, including traditional distribution facilities, customer-facing dark stores for buy online, pick-up-in-store (BOPIS) micro-fulfillment centers, and in-store automation to enhance the customer experience and brand attachment. AutoStore is the leader in the AS/RS segment for pick & pack fulfillment, mitigating potential picking faults and allowing for highly-effective packaging processes.  

Rise of sustainable, natural, personalized products

‍Consumers now prioritize eco-friendly, natural, and personalized products. Companies need to develop environmentally friendly products that are carefully managed throughout the supply chain and presented attractively. AutoStore contributes to sustainability by eliminating inbound packaging waste and reducing energy consumption compared to traditional forklift operations, resulting in cost savings.

Recommendations for automating health & beauty retailers

Formalize an implementation plan

Automation has shifted from being a nice-to-have to a must-have for maintaining a competitive edge. Those who fail to act now risk falling behind. However, it's important to balance the speed of implementation with strategic thinking and selecting technology that can be quickly deployed, easily scaled, and built for long-term success. Here are some tips for successful implementation:

• Establish a core working group and gradually add leaders from departments such as operations, IT, security, and safety to ensure comprehensive participation.
• Evaluate multiple technologies with varying investment levels to understand the trade-offs and find the best fit for your specific operation.
• Commit to utilizing accessible data for analysis, which will drive the conceptual design phase of the project.
• Visit other facilities and seek feedback from non-competitive peers to gain a deeper understanding of the real impact of the technology in practical operations.

Embrace innovation

Have the courage to make changes even if your current processes are performing well. The success of today does not guarantee success tomorrow. Continuously challenge your team and ask, "What if?" scenarios to ensure your operation can adapt and support future business growth.

Choose a transparent technology

While systems like AutoStore may be visually captivating, there are no hidden features or undisclosed capabilities. Choose a technology with minimal moving parts and a straightforward, repeatable, and proven value proposition. Selecting a reliable and transparent technology will help ensure a smooth implementation and long-term success. After all, what you see is what you get!

With the health and beauty category poised for growth and the rise of new retailers, existing health and beauty retailers face mounting pressures to meet increasing customer demands. To remain competitive, retailers must prioritize both online and in-store experiences, delivering speed and precision. In this context, investing in automation technology becomes paramount to their overall strategy.

Forward-thinking retailers who proactively plan and implement innovative solutions will be able to distinguish themselves in the market. Overcoming challenges related to fire standards can be achieved by assembling the right team, conducting thorough analysis of the product mix, and implementing creative solutions that cater to the present and future needs of the operation. By taking these steps, retailers can differentiate themselves, stay ahead of the competition, and thrive in the evolving health and beauty landscape.

Summary

In summary, AutoStore has developed and implemented modifications for health and beauty product suppliers that prevent fire hazards and meet insurance requirements. Once this obstacle is successfully overcome, it becomes an ideal solution to support growth strategies, e-commerce fulfillment demands, product differentiation requirements, and evolving trends like the rise of sustainable products.