COVID-19

Retailers get creative to handle expected crush of online sales

Marielle Segarra Nov 13, 2020
Heard on: Marketplace
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An employee prepares boxes for shipment at a warehouse in Draper, Utah. Retailers are preparing their warehouses for a surge in online orders. George Frey/Getty Images
COVID-19

Retailers get creative to handle expected crush of online sales

Marielle Segarra Nov 13, 2020
An employee prepares boxes for shipment at a warehouse in Draper, Utah. Retailers are preparing their warehouses for a surge in online orders. George Frey/Getty Images
HTML EMBED:
COPY

We’re expecting record online sales this holiday season — Adobe predicts a 33% increase compared to 2019 — and that’s putting stress on retailers that never expected to handle this many packages at their fulfillment centers.

Walmart is converting 42 warehouses that normally ship products to its stores so it can also fulfill online orders.

It’s more complicated than it might sound. If you’re shipping products to stores, you tend to move stuff around in large units — pallets filled with cases of diapers or video games, for example.

“Those distribution centers are built for that physically, in terms of racking and forklifts and carts,” said Mark Lang, who teaches marketing at the University of Tampa.

But at a warehouse that fulfills online orders, “now pickers, they’re pulling individual units off.”

Workers take whatever you ordered — a package of diapers, a couple bars of soap — put it all in a box and load it onto a truck so it can eventually be delivered to you.

To do this, Walmart had to update its computer systems and set aside whole sections of its warehouses.

This is something Walmart can do because it has a lot of warehouses. Bryan Eshelman at AlixPartners said smaller retailers are taking a different approach, one they piloted this spring when the pandemic hit: using their stores to ship online orders.

“They literally put inventory in the aisles — aisles that would normally be reserved for customers — to set up almost like a mini distribution center in the store,” Eshelman said.

Meanwhile, Pepsi, which sells a lot of packaged foods around the holidays, just opened a small, fully automated warehouse outside Chicago, which it said can process orders seven and a half times faster.

COVID-19 Economy FAQs

Are states ready to roll out COVID-19 vaccines?

Claire Hannan, executive director of the nonprofit Association of Immunization Managers, which represents state health officials, said states have been making good progress in their preparations. And we could have several vaccines pretty soon. But states still need more funding, she said. Hannan doesn’t think a lack of additional funding would hold up distribution initially, but it could cause problems down the road. “It’s really worrisome that Congress may not pass funding or that there’s information circulating saying that states don’t need additional funding,” she said.

How is the service industry dealing with the return of coronavirus restrictions?

Without another round of something like the Paycheck Protection Program, which kept a lot of businesses afloat during the pandemic’s early stages, the outlook is bleak for places like restaurants. Some in the San Francisco Bay Area, for example, only got one week of indoor dining back before cases rose and restrictions went back into effect. Restaurant owners are revamping their business models in an effort to survive while waiting to see if they’ll be able to get more aid.

How are hospitals handling the nationwide surge in COVID-19 cases?

As the pandemic surges and more medical professionals themselves are coming down with COVID, nearly 1 in 5 hospitals in the country report having a critical shortage of staff, according to data from the Department of Health and Human Services. One of the knock-on effects of staff shortages is that people who have other medical needs are being asked to wait.

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