As July marks our entrance into the third quarter of the year it is tempting to look back on the past eighteen months with a heavy heart. Yet, despite the gloom that surrounded 2020 and so far, most of 2021, it has been a year and a half that has provided us with many new opportunities too. Digital transformation has reshaped retail as global eCommerce has grown exponentially, contactless technology has kept us all safer in public spaces, and robotics and automation systems have become responsible for routine labour which not only saves businesses time and money but also protects human workers from unnecessary risks.
As this global technological revolution continues to evolve, the Supply Chain Network (SCN) team have taken time to review the current climate and assess just how much these recent changes have influenced the world of warehousing. From navigating supply chain uncertainty to understanding and meeting the stark changes in consumer behaviour, below are SCN’s top three favoured leading trends in warehousing in 2021 so far.
Immunity and Resilience to Changes
Lockdowns and mandatory shielding during the pandemic created a world within which people came to rely on shopping online and having items delivered via covid- safe means, straight to their doorsteps.
According to Statista, “in 2020, as much as 87 per cent of UK households made online purchases within the preceding 12 months, making this the highest online purchase penetration rate in the country in the past 11 years. Clothing and sports goods were especially popular purchases made online."
This rise in eCommerce as opposed to more traditional retail routes created a surge in demand for facilities to support this. Market Research from Drapers reports “total eCommerce sales across Europe increased by 150% over the last five years, with online sales rising from 7% of the total sales market in 2015 to 13% of the market in 2020. The UK is predicted to need an extra 60 million sq. ft of warehousing space by 2025.” Supply chains have, therefore, had to show resilience and flexibility in their approach to meeting this sudden change in consumer behaviour to develop an immunity to this seismic shopping shift.
One brand which has worked well under these unprecedented new circumstances is fast-fashion retailer Boohoo which purchased Debenhams to expand their portfolio and online offering, recognising the demand for eCommerce over high-street retail and the opportunities this provided.
Others include those who have made the best use of micro-fulfilment services and last-mile delivery. These include dark kitchens or delivery only food restaurants and courier companies such as Deliveroo, Just Eat and Uber eats. These are companies that have succeeded despite the panic and changes because they have continued to provide a satisfactory service for their consumers as well as insightfully preparing for any further changes within the retail landscape.
Super-Fast Delivery and Micro-Fulfilment
Imminent delivery and instant gratification are specialities for a company like Amazon. One day and same-day delivery are the norms for this company and its expectant consumers. Amazon has a reputation for trusted and reliable products and accurately tracking order deliveries which have successfully built their loyal consumer following, and to this end, allows Amazon to monopolise the eCommerce arena.
This has sparked fierce competition within other retailers who have, both previously and during this pandemic sought to launch their own super-fast delivery service. Tesco’s Woosh delivery service is a prime example that promises you can "get all your everyday essentials and little luxuries delivered within 60 minutes.” An independent offering, Tesco stands out as it is one of the only FMCG retailers to bravely offer their own food delivery service, in contrast to Waitrose, Morrisons, Asda, Aldi and Co-op who have partnered with and outsourced this service to couriers such as Uber eats and Deliveroo. Other independent retailers have joined in too, with Majestic, Cost-cutter and even petrol station shops available.
According to the Grocer, Demand for micro-fulfilment has also surged on the back of this boom in new pressures for ever-faster delivery. This is forcing online distribution centres into smaller, urban spaces, referred to as micro-fulfilment facilities. It is a combination of these smaller more accessible units and last-mile logistics which are enabling the consumer to get what they want when they want it. A trend that is enabling many businesses to thrive and survive in these unprecedented times.
Averaging 180,000 sq. ft, while these micro-fulfilment warehouses currently satisfy the increasing pace of eCommerce demand, many may question whether they are a sustainable business model for the future. However, it seems that for now they are here to stay, and according to Interact Analysis, In the UK it is predicted there will be 80 MFCs in the UK by 2023.
Safety in Social Distancing
Hands, face, space has been the motto for many during the past eighteen months. As has the acronym, Work From Home (WFH). For many in businesses in offices, with a good internet connection and a reliable internal comms system, this was an attainable reality. However, for those in more manual jobs including logistics, engineering, construction, and warehousing there were a few more constraints that needed addressing for these workspaces to facilitate safer, socially distanced operations.
Specifically, within the warehouse sector, while social distancing was necessary, people were still required to be physically present in facilities to complete operations. It seems the pandemic was a catalyst for change and accelerated plans to swap socially distanced humans for robots and automated systems that complete the same work without risking Covid-19 contamination. According to new research from Deloitte on robotic and intelligent automation, two thirds (68%) of business leaders used automation to respond to the impact of the COVID-19 pandemic.
Despite the recently celebrated ‘Freedom Day’ on July 19 2021, the most recent updated advice from the UK Government was published on 14 July 2021. In this, it states that social distancing, hand washing and self-isolating are all still valid procedures to follow within any place of work.
Become a supply chain leader in 2021
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.