MHD goes behind the scenes at homegrown e-commerce pioneer Catch Group to find out about its recent partnership with Körber. We discover how Catch will be able to fulfil an extra 2,000 orders an hour with a new automated solution and the crucial role this investment plays in the e-commerce leader’s goal of same-day delivery.
Catch Group is one of Australia’s first e-commerce marketplaces. Founded by two brothers in 2006 with the aim of transforming Australia’s online retail landscape, Catch has grown to become one of Australia’s largest online retailers.
Catch operates out of two distribution centres and sells thousands of products across a range of consumer categories, including home decoration and furnishing, fashion, sportswear, health and beauty and also dry pantry goods – a category which the organisation saw a huge increase in during the early stages of COVID-19.
With an item sold every two seconds on its award-winning digital platform, the retailer has been ramping up its fulfilment capabilities in order to meet the ever-increasing consumer demand.
In June last year, Wesfarmers acquired the business for $230 million. Commenting on the acquisition, Rob Scott, Managing Director at Wesfarmers said Catch offered an opportunity to accelerate Wesfarmers and Kmart Group’s digital and e-commerce capabilities, with Kmart and Target able to lean on Catch’s expertise in e-commerce fulfilment and digital marketing.
Ian Bailey, Managing Director at Kmart Group also spoke of a new digital era for Wesfarmers. “Catch has built a successful first-party and fast-growing marketplace business underpinned by a leading technology platform and data capabilities. We look forward to leveraging our capabilities to grow the business and accelerate the customer-driven, omnichannel initiatives across Kmart and Target,” he said.
A competitive market
The online marketplace in Australia is becoming an increasingly competitive space. Australian online consumers are more sophisticated than ever and expectations around delivery timeframes are rising higher and higher.
Global e-commerce giant Amazon is aggressively increasing its footprint in the Australian market. In June this year, the online retailer announced it would build a new fulfilment centre in Queensland as well as revealed plans it will build its first robotics fulfilment centre in Australia.
Despite its heavy investment in the region, Amazon is still struggling to return a profit in Australia. In 2019, the company reported a $4.7 million loss for the year, albeit up on its previous loss of $5.3 in 2019.
COVID-19 prompted a revolution in online shopping and has sent e-commerce penetration across Australia to a record high, meaning online marketplaces such as Catch Group are set to grow even further.
In June this year, Wesfarmers reported early wins across its online retail channels. A significant player in this growth was Catch Group, with total sales in the second half of the financial year (FY20) growing by an impressive 68.7 per cent. The company was already on a growth trajectory before the impact of COVID-19, with Catch reporting a 21.4 per cent sales growth in the first half of FY20.
Wesfarmers commented that Catch was providing the Group with “pleasing progress” with strong growth across both in-stock and marketplace segments as well as ongoing growth in its Club Catch subscription base.
Online access to Australia’s largest household names
While Amazon sees Australia as a major opportunity, Catch has the added benefit of being part of the Wesfarmers family – which is home to some of Australia’s much-loved high street brands.
In early July this year, Catch added thousands of new products to its already extensive product portfolio online marketplace. To meet this new demand, Catch has partnered with global supply chain leader Körber to broaden its automation capabilities across its fulfilment operations.
“Catch has experienced phenomenal success since its inception as an early innovator in the e-commerce market in Australia. With COVID-19 driving more consumers online, Catch is very well placed to meet this rise in demand and this investment in automation ensures that we continue to increase and improve our product and service offering for our rapidly growing consumer base,” Richard Whetton, Head of Fulfilment at Catch Group says.
A familiar partner
Körber (formerly Cohesio Group) has previously worked with Wesfarmers-owned retailer Kmart on a number of technology solutions for improving fulfilment rates. Most recently, the retailer has rolled out Körber’s Android Voice solution across a number of stores and DCs and has made the news as the first retailer in Australia to deploy such a solution.
“Kmart was one of our very first customers and we are thrilled to be working with another retailer in the Wesfarmers Group. Catch Group is an absolute pioneer in the e-commerce landscape in Australia and I’m excited to work with them to improve fulfilment rates and help them deliver in this competitive marketplace,” Nishan Wijemanne, Managing Director of Körber Supply Chain Asia Pacific and global leader for AMR Solutions at Körber says.
With the addition of thousands of SKUs to its range, Catch wanted to explore smarter ways to pick and pack without having to dramatically increase its warehouse footprint and workforce.
“We went through a rigorous process to find a solutions provider that could help us continue to deliver our fast fulfilment rates with this significant increase in SKUs. Körber has a wealth of experience in delivering this kind of automation, and we really loved their honest and practical approach,” David Matheson, General Manager – Fulfilment Operations at Catch Group and former Chief Operations Officer for Kmart says.
For Richard, Körber’s relationship with Kmart, also part of the Wesfarmers Group, stood the technology provider in good stead. “We knew that Kmart has been having a great run with Körber over the past few years. They’ve become a real trusted advisor and are a very important player in Kmart’s innovation and improvement processes,” he says.
Catch operates some large-scale automation processes at its distribution centre in Victoria, but up until now its picking processes have been largely manual. Seeing an opportunity to improve fulfilment rates, Körber has developed an AMR solution, powered by global technology provider Geek+, for the online retailer.
The solution consists of more than 100 automated mobile robots operating across 3785 sqm within the 30,000 sqm facility. The robots will have the capability to manage an additional 80,000 SKUs on top of the retailer’s previous range. This will be the largest AMR deployment of its kind for an e-commerce marketplace in Australia and New Zealand.
“The AMRs will provide Catch with the ability to pick an additional 2,000 orders an hour. With its growing consumer base and the increased demand for timely and efficient delivery across Australia, this solution will play a crucial role in Catch being able to deliver the excellent customer experience the retailer is known for,” Rizan Mawzoon, Head of Transformation at Körber Supply Chain says.
The deployment will take only three months to complete and the solution will offer Catch flexibility and agility. “The beauty of AMR is that it is flexible, so it can adapt to wherever Catch sees a spike across specific SKUs, it can be redeployed depending on where the fastest moving SKUs are,” Nishan says.
Geek+ and Körber recently announced a global strategic partnership to provide businesses with smart AMR solutions worldwide. This partnership is an extension of the success that Körber and Geek+ have had in the Asia Pacific region and will see the innovative AMR solution reach new markets.
In addition to the AMRs, Körber will also project manage the deployment of a conveyor solution that will play a significant role in improving fulfilment rates. “We’ve done all the design and architecture of the conveyor system,” Rizan says.
Furthermore, Catch has also engaged Körber to enhance its WMS capabilities. By working with Körber across a number of different facets of their supply chain, the retailer has the added benefits of synergies across its entire supply chain, with Körber offering a truly end-to-end solution.
“This investment is a significant step for Catch Group in its move to offer faster and more convenient fulfilment options for its growing customer base. By adding more products to Catch’s online store, we are providing Australian’s with easy and convenient access to their much-loved high street brands. We are excited to see where this technology deployment takes us and to seek out further opportunities where we can utilise this kind of agile and flexible technology,” Richard Whetton, Head of Fulfilment at Catch Group says.
Same-day delivery set to become a reality
Catch currently operates from two sites in Victoria but has plans to expand into an additional DC in New South Wales.
With the current trend to move closer to the consumer, these strategically located distribution centres will set the online retailer up for being able to deliver same-day delivery, which is an aspiration for the business.
“When you can pick and pack at these kind of rates with the AMRs, the possibilities are endless. We know that a major priority for our customers is faster delivery times, so with this investment we are setting ourselves up to be able to deliver next- and same-day delivery,” Richard says.
This is echoed by Saar Davidi, Fulfilment Centre and Project Manager at Catch. “We are always looking at ways we can get the order faster to the customer, this investment will allow us to hold more products ready for immediate picking, meaning we can ship most orders out the same day the order comes in,” he says.
An added benefit for Catch, was Körber’s approach to safety. “With the implementing of automation, it’s important to ensure that all workers who work around or interact with the solution are kept as safe as possible. Sometimes, with conveyors workers need to step up on to a ladder but with our solution it’s automated so it has the added benefit of being much safer,” Rizan says.
Online marketplaces have radically changed the way consumers shop and competition across the e-commerce landscape is fiercer than ever before. Fulfilment capabilities are set to be the key differentiator in the race to the top, with the backing of one of Australia’s largest listed companies and a significant investment in automation, Catch Group is ready to deliver.
Cohesio Group, rebranded to Körber as part of a global rebrand on 1 September 2020.
The Körber Business Area Supply Chain is part of the international technology group Körber. This includes Aberle, Aberle Software, Cirrus Logistics, Cohesio Group, Consoveyo, DMLogic, HighJump, inconso, Otimis, Langhammer, Riantics and Voiteq. Körber has proven success with thousands of companies worldwide. All companies will officially transition to the brand name ‘Kӧrber’ in late 2020.