Behind-the-scenes look at Takealot’s massive distribution centre

Kevin, any word on whether they're going to use some of that money to reopen a collection facility in Johannesburg? The JHB warehouse looks bigger than the one in Cape Town, so if they can get it right in CPT surely they can do it in JHB too ... or is security their main concern?
 
@Kevin

I know companies typically don't like to talk about this sort of stuff, but I'd love to know more about the barriers to profitability that TakeAlot and online shopping in general faces. Why is it so difficult for them to turn a profit?
 
Ancalagon said:
@Kevin

I know companies typically don't like to talk about this sort of stuff, but I'd love to know more about the barriers to profitability that TakeAlot and online shopping in general faces. Why is it so difficult for them to turn a profit?
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My guess is it has something to do with every single person moaning about specials that aren't special enough? It doesn't matter what the price is, there are some people who insist on it being 50% cheaper than everywhere else or they're not buying. I can only imagine how difficult it is to handle importing duties, exchange rate fluctuations, maintaining massive distribution systems like that AND the cost of delivery (and it better not be late).
 
Foxhound5366 said:
My guess is it has something to do with every single person moaning about specials that aren't special enough? It doesn't matter what the price is, there are some people who insist on it being 50% cheaper than everywhere else or they're not buying. I can only imagine how difficult it is to handle importing duties, exchange rate fluctuations, maintaining massive distribution systems like that AND the cost of delivery (and it better not be late).
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Yeah, I can also come up with a whole range of different reasons, but I want to hear it from them. I'd love to know what research they have on the subject.

They must have some of the best supply chain management people in the business, and they still struggle to keep their costs low.
 
Not impressed,it looks like Makro. Go look at house amazon collect and store their packages.
 
Foxhound5366 said:
Kevin, any word on whether they're going to use some of that money to reopen a collection facility in Johannesburg? The JHB warehouse looks bigger than the one in Cape Town, so if they can get it right in CPT surely they can do it in JHB too ... or is security their main concern?
Click to expand...

No collection facility for Johannesburg on the cards.

Reid said it's a legacy feature of the Cape Town centre and they have no plans to open similar ones elsewhere.
 
Ancalagon said:
Yeah, I can also come up with a whole range of different reasons, but I want to hear it from them. I'd love to know what research they have on the subject.

They must have some of the best supply chain management people in the business, and they still struggle to keep their costs low.
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It would be interesting. Especially since the whole point of an online retailer is to avoid all the overheads of having brick and mortar points of presence. I'm not second-guessing the experts, but you would think the operation could be a lot more lightweight and tech driven but they employ 1200 people! Or perhaps I totally misunderstand the scale of the operation.
 
Jan said:
No collection facility for Johannesburg on the cards.

Reid said it's a legacy feature of the Cape Town centre and they have no plans to open similar ones elsewhere.
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That is very strange.

They will save a lot of fuel and utilize the couriers' time more productively by allowing those customers who cannot wait in one place the whole day for the delivery to collect the order themselves at a time that suits them.

Australia has an interesting setup where you can opt to have parcels delivered at your nearest Woolworths, which eliminates this very problem.
 
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One thing I have always wanted to suggest to Takealot is a "not urgent" delivery option on checkout. Offer the buyer free delivery if they choose this option and then say that delivery could take 1-2 weeks. I would choose this free option every time for toiletries and non urgent items. I wonder why they don't offer this? They could lump together lots of these "slow" deliveries and send 1 massive shipment to the MR D branch
 
Jan said:
No collection facility for Johannesburg on the cards.

Reid said it's a legacy feature of the Cape Town centre and they have no plans to open similar ones elsewhere.
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I don't buy that at all. When they moved warehouse locations in Cape Town they not only retained the collection area but expanded it into an entire professional facility with multiple counters and even a child's play area in the corner. That's not how one goes about retaining a legacy feature.

Living in Cape Town and seeing the long queues outside the collection facility during peak times (e.g. the Christmas rush) you can't deny it's popular or that it works well. They even *had* a collection facility in Johannesburg (I swear I remember collecting something from their old premises) but now there's just nothing.
 
Almost looks neater than their website, or should I say "more pleasing than their website"
 
garp said:
It would be interesting. Especially since the whole point of an online retailer is to avoid all the overheads of having brick and mortar points of presence. I'm not second-guessing the experts, but you would think the operation could be a lot more lightweight and tech driven but they employ 1200 people! Or perhaps I totally misunderstand the scale of the operation.
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I definiteky question these so-called "experts". There is NO WAY you need 1200 people for this, no matter the scale.
 
mvnrsa said:
I definiteky question these so-called "experts". There is NO WAY you need 1200 people for this, no matter the scale.
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Everyone else's expectation was that their new warehouses would be state of the art with automatic retrieval and sorting systems which would support picking and packing via light/sensors etc (I never expected anyone would locally go with something highly robotic though). By the looks of it, it is just a big storage hall with an automatic conveyor belt/sensors and everything else is very much manual.

All the pictures did not show much, I think large distributors like Rectron/Mustek etc have pretty much the same setup. Perhaps their optimisation will be that the sorting to the packing stations will be fully automatic instead of someone just sequentially offloading packing trays.
 
MagicDude4Eva said:
Everyone else's expectation was that their new warehouses would be state of the art with automatic retrieval and sorting systems which would support picking and packing via light/sensors etc (I never expected anyone would locally go with something highly robotic though). By the looks of it, it is just a big storage hall with an automatic conveyor belt/sensors and everything else is very much manual.

All the pictures did not show much, I think large distributors like Rectron/Mustek etc have pretty much the same setup. Perhaps their optimisation will be that the sorting to the packing stations will be fully automatic instead of someone just sequentially offloading packing trays.
Click to expand...

Exactly

https://www.youtube.com/watch?v=Y-lBvI6u_hw

That is far more impressive.
 
Currently, a single order can take a picker all over the distribution centre.
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Sounds as ineffective as the website's search functionality
 
Ancalagon said:
@Kevin

I know companies typically don't like to talk about this sort of stuff, but I'd love to know more about the barriers to profitability that TakeAlot and online shopping in general faces. Why is it so difficult for them to turn a profit?
Click to expand...
Expenses expenses expenses... To run this sort of operation, your expenses like staff salaries, equipment and courier costs sometimes exceed the price of items which they sell by something like 10-1

Takealot need to basically increase their profit margins. If they increase their margins, then it means that their selling prices will go up. It's either increase RSP, or negotiate a lower cost and maintain current price. Negotiating a lower cost is very difficult though, because the cost to produce is expensive, this includes packaging and handling fees, as well as other duties, imports tax etc.

Unless Takealot reduces its wages to turnover ratio, they will hardly ever run as a profitable business. But then, reducing wages, your workforce is lowered, and/or productivity levels drop in terms of staff effort.

Like I said above, easiest way to turn a profit, is to increase selling prices, which is something the consumer won't like.
 
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