Over the past year or so, we have seen an increase in faster delivery times, which puts pressure on retailers to keep up with customer expectations. With these changes, the idea of on-demand space within warehouses is gaining traction.
On-demand warehousing has the potential for businesses working on a local scale as well as those within international distribution networks, who are looking to reduce their capital expenditure or to rebuild their network in certain areas. Smaller retailers might consider stripping back their occupancy to a “core network” and using on-demand facilities more. It could also support the growth of smaller businesses, in particular e-commerce firms, who have lower budgets but still need to meet customer expectations for fast delivery times, in order to compete.
Larger retailers would be able to use on-demand warehousing to supplement rather than to replace their existing facilities. “Retailers need to be able to scale up and down and have highly variable requirements – be that Black Friday, Christmas, or sales season”, says Jon Sleeman, EMEA Logistics & Industrial research director at JLL.
Warehouse owners, as well as companies, could benefit from more flexible space solutions. Warehouse owners could find their assets more utilized with the ability to lease out empty, underused space in their portfolios. While there are risks involved, such as “pay-as-you-go” lease models and practical issues such as the mixing up of stock from multiple tenants, new technologies are being introduces to help manage the risks better.
More Than Just Warehouses
This on-demand concept could also extend to other essential components of the supply chain in the years to come, with innovative solutions such as truck booking offering a solution for those in a hurry. German company TIMOCOM offers both warehouse and freight sharing solutions. In Australia, the CLIK Collective is a new co-warehousing concept with a co-working space attached, designed specifically for local e-commerce business in Melbourne. We can expect to see more concepts like these popping up around the globe.
While on-demand warehousing may not have gained traction in South Africa just yet, there is no doubt that this trend will filter down to us soon. Make sure your logistics department is up to scratch so that you can compete within the industry. For technology and expertise to keep you in the game, email email@example.com.