Marnix Rutten Of Vanderlande On The Future Of Retail
An Interview With David Liu
Be creative. Great retailers in every channel communicate and offer something special or unique as part of the customer experience regardless of what channel it occurs in.
As a part of our series about the future of retail, I had the pleasure of interviewing Marnix Rutten vice president, sales and systems warehouse solutions at Vanderlande, North America. An industry veteran with more than two decades of experience in senior leadership and engineering roles, he has led numerous large-scale global projects that address the materials handling and warehouse needs of retail industry leaders in fashion, food and general merchandising.
Thank you so much for joining us in this interview series! Before we dive in, our readers would love to learn a bit more about you. Can you tell us a story about what brought you to this specific career path?
As the vice president of sales and systems warehouse solutions at Vanderlande, North America, I work with many of the world’s top retailers and e-commerce companies. I never imagined that I would serve in a sales role, because I was focused on building solutions and solving problems.
I’m an engineer by training and grew up in a materials handling role, a background that led me to oversee engineering teams on projects around the world. Over two decades with the company, I’ve come to realize and learn that sales is really shaping the creation of solutions. That’s particularly true in our industry where the systems we develop enable many of the world’s most successful retail and ecommerce businesses to solve very complex supply chain and distribution center challenges.
Warehouse solutions are very sophisticated and use advanced automation and robotics. So, it may seem ironic that a successful salesperson can explain in simple terms how we help. My experiences doing just that ultimately led me to my role today.
Can you share the most interesting story that happened to you since you started your career?
The importance of this ability to simplify complex problems and systems was impressed upon me early in my career. One memory, in particular, stands out. I arrived early at a sales meeting with a large prospective customer only to find that its CEO was also waiting for the meeting to begin. He asked me about the solution I envisioned and requested that I sketch out and walk him through it. As a young sales person it was more than a little intimidating, but by the time my colleagues and his employees arrived, we’d already come to an agreement on the basic parameters of the system that we ultimately put in place.
That experience left an indelible mark on me. It also clearly and tangibly confirmed for me why the sales role is so important, not just for vendors but also for the customer. I think many sales people ultimately have a far greater impact on large engineering projects than they know.
Are you working on any new exciting projects now? How do you think that might help people?
We work with the largest retailers in the world to create the automated systems within their distribution centers that enable the quick and efficient fulfillment of online orders. I’ve always been attracted to big, complex projects, so the opportunity to work with organizations that are on the leading edge of flexible fulfillment and who have faith in our ability to solve their most pressing challenges is very exciting.
It’s a fascinating time to be in the industry, particularly in the United States where retailers are turning to advanced automation to successfully respond to consumers’ unprecedented adoption of e-commerce. Consumers are receiving next-day and same-day deliveries that were inconceivable even just a few years ago. It’s a truly transformative time.
More specifically, I’m also proud of the ways the next-generation automation technology we create helps not only the people at the distribution centers where it is deployed, but also across the communities they live in. We are currently working on a 40,000 square foot distribution center for one of our customers that will enable faster fulfillment operations, ultimately providing products to customers at more than 135 stores across Canada. The location is remote, and the automation we are putting in place is bringing many new jobs to the area. It will also be a source of opportunity for many years to come while it’s in operation, helping many families and the community as a whole.
None of us are able to achieve success without some help along the way. Is there a particular person to whom you are grateful, who helped get you to where you are? Can you share a story?
I was very fortunate to enjoy the support of some wonderful mentors who provided me with insights, lessons and experiences I draw on in my work and life every day. When I think of those who helped get me to where I am, several individuals who shaped my views on automation, its potential and its limitations come to mind.
They helped me come to terms with the reality that automation is only as good as the people who use it. Because of that, any exploration of automation also needs to consider training, user adoption and change management. At the end of the day, it’s a tool. You need to know how to use it to deliver the best results.
One mentor was a customer I worked with early in my career. He oversaw an airport in a still developing nation where I led a project to install a very advanced baggage handling system. From the project start, he was hyper-focused not only on how the systems would enable efficient airport operations, but also how to ensure that staff had the skills to use it and an opportunity to simultaneously advance their careers. He was also very realistic about his access to local technical talent.
In truth, he had little knowledge of baggage handling — either manual or automated — which made his sensitivity to the issues involved even more impressive. His insistence that comprehensive training be considered from day one was a pivotal factor in an incredibly successful deployment. It had a profound effect on me. It taught me that people are always central to automation.
How have you used your success to bring goodness to the world?
One of Vanderlande’s core values is ‘we care.’ It’s a principle that permeates our work. We constantly ask ourselves ‘what can we do beyond selling and building our solutions?’ In our operations and manufacturing, we are committed to creating systems that are as efficient and environmentally friendly as possible. This includes building LEED-certified facilities that use renewable power sources when possible. Our R&D efforts focus on decreasing energy consumption and increasing the life-cycles of the systems we build.
Just as importantly, I think we also bring real goodness to the world by empowering our customers to succeed. Most consumers never consider the materials handling systems or distribution centers that make it possible to receive their online order. Perhaps it was a gift they bought a loved one who lives across the country, the prescription they filled, or the groceries they ordered. In all of those moments there is goodness. It’s motivating to think of the role that I and my colleagues played to make them all possible.
Ok super. Now let’s jump to the main questions of our interview. The Pandemic has changed many aspects of all of our lives. One of them is the fact that so many of us have gotten used to shopping almost exclusively online. Can you share a few examples of different ideas that large retail outlets are implementing to adapt to the new realities created by the Pandemic?
It’s true that the pandemic dramatically increased online shopping, including in sectors like groceries where it increased dramatically. The Brick Meets Click/Grocery Shopping Survey, for example, found that approximately 64 million U.S. households bought groceries online in September 2021 — that’s roughly half of U.S. households. However, it’s important to remember that retail today is not just about e-commerce.
This is true now as higher vaccination rates and other developments continue to shape and influence how consumers shop. Today’s omnichannel retailers are adapting to new realities created by the pandemic. They are asking fundamental questions like ‘what do customers experience when they go to the store?’ They are also innovating with approaches to point of sale and check out — with some experimenting with carousels that borrow on the concepts of popular vending machines.
Retailers are also making great strides in their micro-fulfillment strategies by changing how distribution centers are used, where they are located and how they are created. For example, more stores are incorporating local facilities and establishing distribution centers within the store — in this way effectively merging their brick-and-mortar and e-commerce operations on site.
E-commerce returns is another area where new approaches are being employed to strengthen the customer experience. Traditionally, returns were viewed as a nuisance and administrative burden that had to be dealt with, accounted for and tracked.
Now, many retailers are treating them as a customer benefit, a competitive advantage and an opportunity to upsell. They refined their distribution centers, systems and processes so that returning an item is as easy as taking it to the post office where all you do is hand it off for the QR code to be scanned. The hassle of boxing and mailing an item back to the retailer is increasingly not a concern for consumers. And for many retailers, you simply return the item to the nearest brick-and-mortar store. It’s yet another example of where we see retailers taking advantage of the fact that consumers are increasingly omnichannel buyers.
The supply chain crisis is another outgrowth of the pandemic. Can you share a few examples of what retailers are doing to pivot because of the bottlenecks caused by the supply chain crisis?
First and foremost, retailers are adapting. Some are using air freight when maritime shipping is problematic, while others are modifying the products they sell. Retailers continue to be as proactive and flexible as they were last fall. When supply chain bottlenecks threatened the traditional peak holiday shopping season, many encouraged customers to begin shopping early and significantly extended the return period for gifts. Because of this many of the shortages initially predicted did not occur.
How do you think we should reimagine our supply chain to prevent this from happening again in the future?
It’s important to understand that many underlying supply chain issues were already present. However, a combination of macro and micro trends, including many outside of their control, have accelerated the need to address them. For example, COVID-19 outbreaks during the pandemic exacerbated the talent shortage, prompted delays in manufacturing and contributed to port closures.
While there is no one single solution or set of solutions to prevent this from happening again, efforts are underway to grow domestic manufacturing capabilities. For example, in the U.S. and Europe, plans for the building of microchip manufacturing plants are being considered. Even so, it’s clear that we must evaluate warehouse and supply chain vulnerabilities and identify where we can support better overall resilience and flexibility, enabling retailers to weather acute challenges and align with shifting long-term trends.
The use and application of automation, for instance, needs to increase in areas where labor shortages, such as those that result when employees are ill, have the potential to impact supply chains. Simultaneously, in other areas there is a significant need for recruitment. In an update issued in October 2021, the American Trucking Associations predicted that up to 400,000 new drivers could be needed in the U.S. alone between now and 2030 as a result of retirements. Clearly, the trucking industry greatly impacts supply chains.
In your opinion, will retail stores or malls continue to exist? How would you articulate the role of physical retail spaces at a time when online commerce platforms like Amazon Prime or Instacart can deliver the same day or the next day?
There will always be people who want to touch and feel products before purchasing them, especially high-end goods or those that cannot be easily returned. However, the pandemic has revealed that consumers are comfortable shopping across multiple channels. It’s not an either-or proposition. For example, with groceries you might buy dry goods online for home delivery or pick them up at the store for convenience. But you still may choose to buy your produce in store so you touch and feel it before making a selection.
Returns of course also shape customer satisfaction. In the Verint Customer Experience Index: Retail report, Amazon received the highest satisfaction score for online purchases and returns, by enabling its customers to return products to its Whole Foods stores. That kind of synergy between online and brick-and-mortar channels is very powerful and a differentiator that consumers will continue to value.
Still, others will use some of their existing store locations to support their micro-fulfillment and e-commerce efforts. In some areas retail stores may become fulfillment operations in the truest sense — locations where patrons don’t shop, but pick up online orders or alternatively, employees pick the requested items and in effect shop for customers.”
The so-called “Retail Apocalypse” has been going on for about a decade. While many retailers are struggling, some retailers, like Lululemon, Kroger, and Costco are quite profitable. Can you share a few lessons that other retailers can learn from the success of profitable retailers?
I wouldn’t call it an apocalypse, but rather a shift. The world has changed. It’s not so simple anymore. A store that might have done very well in a small town 20 years ago now has to compete with innumerable options online. Of course, many retailers are excelling across channels, but they are doing so for different reasons. Each one, including those you listed, has found and developed a formula that addresses their customers’ desires and needs. There are many lessons other retailers can learn from them, but all of them have succeeded at being creative. They’ve adapted to change rather than fight it and delivered what their customers value on imperatives like price, convenience and quality.
Amazon is going to exert pressure on all of retail for the foreseeable future. New Direct-To-Consumer companies based in China are emerging that offer prices that are much cheaper than US and European brands. What would you advise to retail companies and e-commerce companies, for them to be successful in the face of such strong competition?
I actually don’t think the competition from low-cost alternatives will be as dramatic as some believe. Low cost items across multiple product sectors, and from numerous regions, have been available for many years. Consumers know that cheap isn’t necessarily great and have shown that they are willing to spend more for higher quality when it makes sense for them.
In reality, there’s room for both. Consider bicycles. You can purchase one from a chain store inexpensively, yet premium brands offered from specialty retail stores and online also sell phenomenally well. Both options — low cost and lower quality, and high cost and higher quality — are viable options for consumers who have different needs.
For retail and e-commerce companies that compete against lower-cost alternatives, it’s imperative that the entire customer experience reflects the superior quality of the product they offer. The e-commerce experience for more expensive bikes should reflect that focus with a web presence that enables the customer to really examine the product through detailed descriptions, photos that can be zoomed and manipulated to show different viewing angles and reviews. Order fulfillment should be consistent with that experience, too. That remains true after delivery as well. Assembly instructions if they are required, should be high quality, as should the packaging. Customer service and returns processes should also be fast, easy to access and effective.”
Based on your experience and success, what are the five most important things one should know in order to create a fantastic retail experience that keeps bringing customers back for more? Please share a story or an example for each.
I recently purchased a rowing machine made in America. The price was very reasonable and the buying experience reflected what I would say are the five most important things retailers should know to create a fantastic experience.
- First, remember that it’s not just about price. Most consumers are willing to spend more for higher quality;
- Be creative. Great retailers in every channel communicate and offer something special or unique as part of the customer experience regardless of what channel it occurs in;
- Highlight the use of local labor and materials when it makes sense. While it’s not true in every product segment, there is a trend towards the localization or regionalization of products and the synergy between brand attributes and operational imperatives like sourcing and labor;
- Consider every element of the purchasing process. The retail experience should be consistent not only in every channel, but in every step in the purchasing process from the time a consumer first peruses their options, to when or if they choose to make a return; and
- Back it all up with great service. Every interaction, whether it’s with the sales representative on the store floor, the customer service representative at the call center or the chatbot on the website, should send a shared message: we want you to enjoy a fantastic retail experience and we want you to come back for more.
Thank you for all of that. We are nearly done. Here is our final ‘meaty’ question. You are a person of great influence. If you could start a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)
If we could motivate everyone to return all of their plastic packaging back to its source to be reused we could tackle one of the greatest environmental challenges facing the planet. Those in the materials handling profession are increasingly aware of just how much plastic is used needlessly in packaging. One study with a more conservative finding — research with the Alfred Wegener Institute Helmholtz Centre for Polar and Marine Research commissioned by the WWF — found that the amount of plastic debris in our oceans will quadruple by 2050. Other studies point to a more dire scenario. Regardless, we know plastics are harmful for humans, plants and animals, although we don’t really know what the long-term impact will be. It’s imperative that we take action now.
How can our readers further follow your work?
The News & Insights section of the Vanderlande website includes the latest developments about the products our team is developing, our work with the world’s leading retailers and e-commerce companies, and the exciting world that those who oversee and manage distribution centers work in. Feel free to also follow me on LinkedIn.
This was very inspiring. Thank you so much for joining us!