Myer announced NDC system to accommodate $1 billion online sales

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One of the most renowned department store retailers, Myer Holdings, has finally announced its newest automation distribution centre in Melbourne. The newly build automated national distribution centre (NDC) will manage more than $1 billion in online sales as soon as it is inaugurated.

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Myer Holdings already secured a 40,000 sqm facility located at the industrial estate in Ravenhall. The property agreements and paper were signed for a 10-year lease. The distribution centre is expected to be the main contributor to Myer’s online sales which are rapidly growing to $424.1 million or 47.5% for the second quarter this year. The idea emerges from the company CEO, John King, so that the business could reach more customers with an F2C (Factory to Consumer) based business strategy.

By the time NDC operates, it will host more than 200 AI robots to ensure that the order process could be done efficiently and productively 24/7. The result is whether Myer Stores or customers would be able to get their items faster and accurately with the help of the system. The NDC will also be the biggest AI-based distribution centre in the southern hemisphere.

“Our supply chain will be transformed by our NDC to meet online demand and maximise inventory flow to our stores in a fast, efficient, and profitable way,” says King.

“This is a crucial component of our Customer First Plan, and it will ultimately benefit both our consumers and our stockholders.”

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The NDC will be handling both Myer stores and online sales for more than 100,000 SKUs (stock-keeping units) as soon as it begins to operate next year. The NDC is also planned to provide 20% of the facility’s energy requirements with solar power, achieving a non-certified 5-star Greenstar rating.

According to Tony Carr, executive general manager of supply chain at Myer, the NDC is essential for the company’s rapid e-commerce sales growth.

“It will let us stock our stores with the data-driven decisions, allowing stores to draw from the NDC as need dictates rather than the push model of the past. Ensuring Myer’s would continue to fulfil the stores more effectively to satisfy customer demand.

“Myer will gain great income from the NDC system. It will make sure that online purchases are handled even more quickly and efficiently through automation.”

Aside from handling and managing the online sales, Myer has expected that the NDC system would meet the demands of anticipated sales growth through online channels, Myer anticipates that the new NDC will produce enhanced profitability while offering expandable capacity.

Myer’s business model had grown nearly quadruple in size over the last four years and the company recently has claimed the throne of becoming the biggest online retail business in Australia.

Myer currently makes up nearly 28% of sales in online stores, and the company is getting closer to meeting its goal of $1 billion in online sales annually as a result of recent half-year and current half growth. Myer’s online sales were mentioned as outperforming both multichannel retailers and pure online plays when King revealed a sharp increase in the company’s net profit in the first half of FY22.

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