Victoria’s stage four lockdown has tested already strained supply chains with capacity caps introduced for distributions centres, warehouses and meat processing facilities. Unlike the earlier panic-buying episodes where demand spikes illustrated the limited capacity of last-mile logistics, these restrictions bit much further up the supply chain. As COVID cases soar worldwide, the changes we have seen here will be replicated across global supply chains and distribution networks, and the face of retail will be changed forever.

August was the busiest month for e-commerce, ever, according to Australia Post. It edged out the previous busiest month, April 2020. As this demand spike continues into Prime Day, black Friday, Cyber Monday, and Christmas shopping proper, retailers face extremely difficult and disrupted business conditions. This will force immense leaps forward in warehousing and distribution technology, as well as fundamental shifts to supply chains and logistics throughout the retail world.

One of these forward leaps that gained significant traction is Automation, which is the clear winner in the long-term. But “automation” can look very different depending on the retailer and their place in the market. My friend and associate, Michael Kemeny from Austrian automation specialist KNAPP, has been working on a test site in Germany that is 100 percent automated. It’s not a distribution centre or warehouse either – it’s a retail grocery outlet.

Pre-ordered fresh produce from local farmers is robotically picked and packed for collection. Shoppers walk through the aisles where they can choose packaged goods from the shelves to go with their pick-up. The site offers consumers a regular basket of groceries that they can add onto each week – something like a fresh vegetable subscription.

We may not see this kind of complete automation soon in our local store environment, but elements of it are very much underway. E Commerce is leading the way, with major retailers using autonomous robots to augment and in some cases replace human picking and packing. Major supermarkets re-ordering their supply chains to eliminate the final mile pinch-points that saw shelves sit empty in March are building robotics into their own operations as well, spending hundreds of millions on automation.

Robots don’t get sick and infect each other, which is clearly a strength in the current environment. But robotic automation requires a considerable capital spend and needs to be calibrated to meet forecastable demand. The problem is that nobody really knows what an average day looks like anymore. Demand surges – even the “normal” ones around Christmas – require elastic capacity, and the most elastic resources are human. Staff numbers can be scaled up and down more quickly and affordably than automation.

There is where a less sexy but just as important element of automation comes to the fore – technology that increases the efficiency of human power. These small but extremely profitable moves include things like arm-mounted barcode scanners that allow people to keep both hands free and movable trolleys with computer terminals attached that reduce time walking to and from warehouse racks to enter data.

For many retailers, these will be the fastest and most available ways to augment their capacity with automation. They do not require the long runways for testing and implementation that full-scale robots projects do. They are also available to mid-market retailers, whereas the large capital investment of robots – sometimes in the hundreds of millions of dollars – price them out of the reach of all but the largest retailers.

Finally, we are seeing a rapid shift to click and collect, and a convergence between pick-up, drop-off (PUDO) networks and existing retail stores. Concerned customers want low-touch service, and retailers prefer PUDO because delivery becomes the responsibility of the customer. We can expect to see automation in the form of lockers for products like medication and electronic purchases, which customers can access with a pin at any time.

This represents not just a change in delivery methods, but a shift of back-of-house automated technology to front-of-house. These kinds of changes where supply chain elements appear in customer-facing venues have already been seen in the convergence between distribution centres and supermarkets, and we can expect to see more of them over the coming months and years.

Craig Padoa is managing director of Wanzl Australia