The effect of the pandemic
E-commerce has boomed in every market sector. Consequently, there is a need for more and more warehouse space and for more and better fulfilment systems.
Whilst high-street retailers increased their warehouse occupancy by 5%, the overall warehouse occupancy grew by 32%*.
Most of the space has been taken up by Third Party Logistics companies (3PL) so that they now account for 20% of all warehouse space*.
The fastest growing sector is online-only retailers, such as Ocado and Asos. These businesses have increased their warehouse square footage sevenfold over the last 6 years.
Alongside the larger online companies are a burgeoning group of smaller online businesses that developed during the pandemic and are using the services 3PL.
Does this pose problems for fulfilment?
Online retailers should already be well versed in the rapid delivery times required by the online shopper and only have to cope with the growth in the sector.
However, the 3PL sector may well face fulfilment issues coming from the rapid online sector growth, as well as having to accommodate different demands from several disparate clients with different product lines.
It is true to say that as the volume of demand increases both online retailers and 3PL will have to re-evaluate their fulfilment operations.
What’s the answer?
Rather than trying to re-invent the wheel the online sector could turn to companies like the Logistics Improvement Group for evaluation, planning and support.
With a history of over 40 years successful logistics and fulfilment operations, LiG could bring their knowledge and experience to bear for any or all of the following:
- Warehouse Design for automation and conventional warehousing – Designing automated or conventional DCs requires specific skills and knowledge of the best fit applications to enable efficient fulfilment
- Programme and Project management – The Logistics Improvement Group has a methodology that applies to all projects. Their suite of reports is the base of what they do and can be adapted to any client’s needs.
- Distribution Centre Automation – The Logistics Improvement Group experience ranges from less than 100,000 sq ft assignments to over 1,000.000 sq ft fully automated retail distribution centres.
- Change programme running into difficulties. – For logistics companies already undertaking a change programme, which is not performing as expected. The Logistics Improvement Group have the skills and experience to turn it around.
As the pandemic accelerated the online retail sector growth so the need for the logistics and fulfilment sectors to adapt to more and more automation will continue.
In todays “new normal” efficient order taking, rapid fulfilment and delivery are as important as brand choice. Any company that doesn’t keep up will suffer as a result.
*Statistics sourced from Forbes summary of the Annual Report by the UK Warehousing Association and Savills
To discuss your plans just ring call Ellis Williams on 07968 308393 or email email@example.com and we will be happy to formulate a policy which will keep you up to speed with the developments.