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“In terms of impact on the business, it’ll certainly help us with many facets of our warehouse, not just efficiency, speed and accuracy, but the job satisfaction of our pickers, who are absolutely loving the system,” Mittoni told Inside Retail.
Training employees on the new system has been “incredibly simple” and was completed in under an hour, according to Mittoni.
“It’s a product-to-picker system. The robots bring the product to the operator, the screen shows the operator where to pick the item from, the operator scans it, which confirms the accuracy of the item selected, and then they can see where they need to place it according to a light [on the screen],” Mittoni said.
“So far, we’ve had 100 per cent accuracy on our picks and the formal efficiency or accuracy quotation would be something like 99.99 per cent.”
It’s a model that Toys ‘R’ Us is planning to roll out across other future locations.
“We’ll use it as a model to learn and improve with this particular location but we’ll roll it out and expand upon it, because it’s very scalable. The great thing is you can start off with 30 or 40 robots, and simply add more as you get busier through events such as Black Friday and Christmas sales.”
The new system will support a new 20,000-square-metre facility which will be built in the Melbourne suburb of Clayton and house immersive experience centres for Toys ‘R’ Us, Babies ‘R’ Us and Hobby Warehouse.
“We’re going to have a very large warehouse facility, where we can store hundreds of thousands of items. There may only be 3000 or 4000 products in-store, but customers can walk out with one of any of those items that are available in the back part of the warehouse, they will actually be transported to them within 30 seconds to a minute by those robots,” Mittoni said.
Scaling up Babies ‘R’ Us
The Babies ‘R’ Us brand re-entered the Australian market last month with the soft launch of a new website focused on “ease of shopping” through better product categorisation. The new website is starting out with more than 3000 products across 62 brands but is expected to grow over the coming weeks to more than 5000 products including exclusives and limited releases.
“We really see the baby category as a great opportunity,” Mittoni said. “It’s a very large market that we felt was really under-represented within Australia and we wanted to achieve greater selection for Australian shoppers so that they have more choice when purchasing products for their babies.”
Mittoni says the great advantage for the business is that it has several retail pillars that can support the customer through various life stages.
“We get to go on that journey from newborns and toddlers with Babies ‘R’ Us, and then those shoppers become Toys ‘R’ Us customers as well in three to four years’ time. Then later, they also become Hobby Warehouse customers during adulthood or retirement.”
While Mittoni agrees that many new parents will scour the internet for reviews and consult with others on online forums as part of their research into baby products, he says it’s still important to have a physical presence where these products can be tried and tested.
“The way that we shop now is really quite different to how we used to shop even five or 10 years ago. Certainly people in regional areas, who may not have access to very large ranges of products, go online, they do the research, they exchange information with other parents-to-be and determine the sorts of products and brands that they would like to have,” he said.
“We plan to enhance that just a little bit further by having areas where people can interact and test the products as well.”
With all focus now on Christmas trading, Mittoni is expecting consumers will begin shopping even earlier this year, due in part to concerns over postal delays. Fortunately, this has not caused any significant problems for the brand yet.
“We’ve seen an extra day or two into the CBD in Melbourne and also within metro areas of Sydney. However, in regional areas we did an analysis and found that delivery is faster into those areas versus 12 months ago.
“We anticipate a lot more strain on the system this year, however the shoppers I think are fairly tolerant and understanding of the challenges that Australia Post and e-commerce retailers are facing through this period, and at this stage we don’t see those delays as being too long.”
Like many retailers, he has noticed increased interest in Black Friday sales, prompting earlier Christmas shopping.
“What we’ve noticed a great deal is a continuation of the skewing of sales into Black Friday. So, it used to be Boxing Day, post-Christmas sales but now it’s very much centered around the Black Friday period. And so we expect it’s going to be even more skewed in 2021.”
Another trend that Mittoni has noticed is highly compound orders. The average order value of orders placed via the Toys ‘R’ Us website during the second half of FY21 were approximately $122.95 versus $94.11 for the first half of FY21, a rise of 30.6 per cent half-on-half. He expects this to continue over the Christmas period.
“Many people are coming into Toys ‘R’ Us and doing all of their Christmas shopping for their family and friends in the one place. Where we used to see orders of two or three items, that’s now extending up to 10 to 15 items,” he said.