As we near the end of the second quarter of 2021, the Supply Chain Network team has been reviewing the ever-impressive continual expansion of the global warehouse market. Whether it be increased eCommerce activity, new technologies, or a change in consumer behaviours and product demand, 2021 so far has definitely witnessed it all. In this week’s warehouse blog article, the Supply Chain Network Team have created a compilation of a few of their favourite trends of 2021 so far, within the warehousing and commerce industry. With simultaneous changes happening so quickly, now is the perfect time to start making the right business decisions to avoid getting left behind.
1. Major Growth in Demand for Commercial Warehouse Space
Although the pandemic has seemingly been the reasoning behind many businesses large and small jumping to adopt a more digital offering, this transition has always been an inevitability and covid simply a coincidental catalyst. However, with this increase in online sales comes the need for more businesses to begin to start investing in eCommerce warehousing space.
According to warehousing firm LondonMetric, “The FTSE 250 company, which counts Amazon and Lidl among its customers, saw the value of its property portfolio rise to £2.6 billion in the year to March, from £2.4 billion. Boosted by site acquisitions and high occupier demand for space, retailers have needed extra warehouse space in response to soaring online orders.”
More a necessity than a convenience, Coronavirus lockdowns meant that more than ever before, consumers became reliant upon being able to shop online, and have items delivered to their preferred address. According to a recent report from Savills Investment in commercial warehouse still currently stands “ahead of pre-pandemic levels with the highest volumes in Q1 since 2017”.
Despite the commencement of vaccinations in the UK “it’s likely that retail warehousing will continue to outpace traditional retail methods due to the drive-to convenience, outdoor setting and, therefore, perceived Covid safety”.
2. Increased use of Automation, Robots, and Voice-Directed Warehousing Solutions
Just as the perceived rise in eCommerce has been highly correlated with the pandemic, has the increase of automation and new technologies within the warehouse. While it is true that more robots and automation technologies have been introduced to operate facilities within safe social distancing requirements, both digital disruption and digital transformation have played very substantial roles within the warehousing industry for a significant amount of time now. Coincidentally, however, newer domesticated technologies such as voice assistants and wearable tech, have indeed started to make a more public appearance within our supply chains.
Voice-Directed Warehousing Solutions and artificial intelligence and robotics can optimise warehousing activities. Yet, While warehouse leaders understand the potential of new technology, 77% admit that they are slow to implement it.
While demand for all forms of robotics and automation continues to grow in the supply chain, the COVID-19 pandemic has emphasised the true importance of leveraging technology like robotics to protect workers. A recent Gartner report predicts that “through 2023, demand for robotic goods-to-person (G2P) systems will quadruple to help enforce social distancing in warehouses.”
3. Rise in Super-Speed Deliveries within FMCG Sector
This summer a 1-hour delivery service is planned for trial by supermarket giant Tesco. Aptly named ‘Whoosh’, Tesco aims to roll out the service across the country, following a successful trial period within selected postcodes surrounding their Wolverhampton Willenhall Express store.
While Sainsbury's similarly offers a 'chop-chop' delivery service, the monolith Waitrose has recently discontinued their 'Zoom' service and following in Co-op, Morrison’s, and Aldi’s footsteps, has instead partnered with known delivery services Deliveroo and Uber Eats to continue to provide this now highly sought-after rapid grocery delivery option.
With much uncertainty still surrounding the UK’s plans for lifting lockdown, delivery services like these have a place carved out for their success seemingly indefinitely, attributed as much to their no-contact covid-safe delivery as their speed, price, and convenience.
4. ‘Micro Fulfilment’ and ‘Dark Kitchens as the New Normal
Micro-fulfilment helps people turn their small spaces into company storage space. As an increasing number of retail spaces are repurposed into small central warehouses, deliverables can be brought closer to consumers. In turn, bringing warehousing closer to the end consumer democratises rapid delivery for companies, and improves covid safe contact-free delivery options, wherever it is possible.
Micro-fulfilment also holds the potential to integrate the sharing economy within the warehousing and distribution arena, in turn making consumers’ lives easier and reducing overheads for the associated businesses.
LondonMetric, also predicts that many more businesses may start to invest in “dark kitchens” - food preparation hubs based in commercial space. Aimed at giving restaurants and other dining firms more room to work on takeaway orders, these premises can work to minimise last-mile efforts for centralised distribution facilities, and make services like one-hour delivery a reality.
Plan for your 2021 business success
Experts in all aspects of warehouse and network design, SCN understands the importance of remaining competitive in a dynamic industry and the critical data analysis required to achieve this. Specialists in Warehouse Design and Fit-Out, the SCN team can help you reach your facility’s fulfilment potential in 2021 and beyond. Visit www.scnuk.com to learn about the work that we do and to ensure you are ready and future-proof your business plans and warehouse design.
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