Marks and Spencer invests in stock control

A couple of topics here: I’ve chosen to make the main focus one of stock control, but this blog is obviously about the rise of the online economy too.

According to The Guardian, Marks & Spencer is promising huge improvements to the way it serves online shoppers after opening a fully automated 900,000 sq ft warehouse will be able to handle 1m orders a day. The retailer, which sells just 15% of its clothing and homewares online (compared with about 35% at major rival Next) admits that its current systems were ageing and inefficient.

Most retailers have been scrambling to update the way they process orders and handle deliveries as e-commerce booms (see an earlier blog on Tesco’s ‘dark stores’). M+S has a bit of a reputation for being slow to spot trends (see the cartoon below) and has spent two years trying to update its look. Now their director of ‘multi-channel and e-commerce’ said: "(E-commerce) has outgrown our business infrastructure. Our delivery proposition and availability is not as good as customers would like". She went on to add that after more than 20 years of under-investment, M&S is now aiming to launch a "market-leading proposition" in the way it delivers online purchases to shoppers. A first step will be an option, available within the next 12 months, to order goods late at night via its large stores for delivery the next day, before moving to same-day delivery.

The new warehouse will help make that happen by cutting by 70% the time it takes to move products from UK ports to stores and improving the availability of popular items both in stores and online. The centre is currently handling just a few hundred orders a day, but by next year it will be dealing with 1m items daily, with 1,200 people working at the site during peak periods. The company is in the middle of a £1bn programme to improve ageing IT and distribution systems. The changes will also reduce the amount of stock the company needs to hold by a third and help it to cut costs by using just three distribution centres rather than more than 50 warehouses at present. Analysts say M&S faces a risky period over the next few years as it builds its new facility to full capacity, adds clothing to an existing centre in Bradford, and sets up a new distribution centre in the south-east.

Here is a great clip about stock control at John Lewis, a video about stock control at Sainsbury’s, a glimpse inside Amazon and a couple from the terrific ‘Britain from Above’ series here and here.