During the last 20 years, we have seen significant changes in many areas of our lives. Digital technology has changed the way we communicate, work and consume information. We have seen major shifts in the way we search for and buy products.
Today, consumers can completely avoid shopping at the high-street retail stores. They can have everything from clothes and fashion accessories to food delivered to their home or workplace. We can order goods from all over the world and receive them on our doorsteps within a day. Geography is no longer a barrier.
The Role of On-Demand Warehouses
Warehouses have also changed significantly due to the shifting retail business model. Previously, warehouses were built in remote locations, far from urban centres. They were used to store bulk quantities of products from manufacturers and wholesalers. Retailers would receive shipments from these warehouses to their store for selling to visiting customers.
These days, warehouses are designed to have large hubs where bulk goods are stored for hundreds of online and high street retailers. We also have smaller consolidation centers that are used to facilitate click and collect operations for small, online retailers. Both types of warehouses are designed to support direct delivery to customer premises.
Since very few customers visit high-street retailers these days, warehouse businesses shifted the supply model. Retail businesses started supplying products directly to the consumer’s home from the warehouse.
The phenomenon was most successfully popularized by Amazon where hundreds of online stores could store their products at Amazon warehouses and rely on the company to handle everything from delivery to bills collection.
Flexibility and Scalability
Structural flexibility is very important for retail businesses today. You can never predict demand with certainty but fixed costs for the warehouse will always be a burden on your operations.
Investments in warehouse space can be a very high cost to bear. Add to that the need for investing in technology to handle the inventory and it is easy to see why most retail stores opt to go for a third-party on-demand warehouse.
A Dynamic Solution
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