In a compelling session at DELIVER Europe 2024, Christian Neumayer, VP Fulfillment & Quality at zooplus, shared insights into the company’s impressive growth and the operational challenges it faces in the rapidly evolving e-commerce landscape. As zooplus, a leading European pet retailer, celebrates its 25th anniversary, Christian reflected on the significant changes that have occurred over the past few years, including a dramatic increase in order volumes, product offerings, and the rise of automation in their fulfillment processes.

Zooplus currently serves 11 million customers across 30 countries in Europe, shipping 43 million packages annually, with each order averaging 15 kg. This large volume of pet food and accessories requires an efficient logistics network, which zooplus has built through 13 fulfillment centres across Europe. However, as the business continues to scale, automation has become a critical component in meeting customer demands while ensuring operational efficiency.

The growing importance of automation

Christian highlighted the growing trend of warehouse automation, especially in response to challenges in the labour market. With the cost of labour rising due to inflation and the need for ergonomically friendly environments, automation technology—such as Automated Mobile Robots (AMRs)—has become a vital solution. Furthermore, these systems have become more affordable, enabling zooplus to explore further automation in their processes, especially during peak times like the Christmas season.

The shift in zooplus's business model, following its acquisition by private equity, has also had a significant impact on their logistics strategy. The company has expanded its product range from 8,000 to 30,000 SKUs, which has necessitated a rethinking of their fulfillment processes, automation needs, and the overall logistics network. With increased complexity, the question arose: should zooplus continue outsourcing its logistics, or should it insource operations to better tailor automation to their specific needs?

Benefits and challenges of outsourcing

Christian discussed the benefits and challenges of outsourcing, where service providers offer scalability and shared costs but also bring limitations in flexibility and innovation. He explained that as the business demands increased complexity, including tailored automation solutions, the company began to question whether the fully outsourced model would continue to be viable. Custom automation solutions provide the best ROI but come with higher upfront costs, making it a delicate balance between long-term investment and agility.

The presentation concluded with a discussion on the grey area between insourcing and outsourcing, stressing that the decision depends largely on how specific the automation requirements are, as well as the maturity of the organisation and the expertise of the service provider. Zooplus’s journey has been one of growth and innovation, and while the company is proud of its achievements, especially the team's ability to balance growth with quality customer experience, Christian stressed the importance of agility in a fast-changing market.