Every action has an equal and opposite reaction. This is Newton’s third law of physics and it is quickly becoming the golden rule for e-commerce retailers. The action, and popularity, of Amazon Prime’s two-day delivery is forcing online outlets to reconsider how they are investing in and organizing their distribution centers. The reaction is an increased dedication to enhanced technology and a proliferation of facilities that are closer to large geographic concentrations of customers.
These fulfillment centers are designed to offer quicker responses while also lowering costs and improving distribution operations. This also isn’t a short term fad, or a quick fix. A recent survey done by Zebra Technologies Corp. shows a commitment from warehouse operation professionals to make quicker, cheaper delivery a staple for their companies. In fact nearly half (48%) plan to increase the number of warehouses in their network this year. This expectation exceeds three-quarters (76%) by 2020, showing the industry-wide dedication to this strategy.
At the same time, more traditional strategies like expanding warehouse size and scale are decreasing. While 61% of the survey respondents do plan for current facility expansions within the next 4 years, that is a decline from the 65% that are currently planning on expanding.
Speed and efficiency is the overarching theme of these shifting strategies.
- Last year’s survey showed that 50% were planning to introduce modernized WMS platforms in order to manage additional locations and meet the challenges of omni-channel fulfillment. Now over 75% of respondents plan to have this same technology by 2020.
- How will these warehouse and footprint improvements be judged? Over 40% state that shorter delivery time will be the key performance metric.
- By 2020, these respondents plan to invest in these tools and processes:
- 76% - Increased shipping volume
- 68% - Bar code scanning
- 62% - IoT (Internet of Things)
While the demand for free and/or fast delivery will vary from customer to customer, e-commerce retailers and their supply chains are taking strides to make answering both of them more efficient. Technology and a strategically placed fulfillment footprint appear to be the answer for meeting the challenges of omni-channel fulfillment and growing competition.
For over 75 years Barrett Distribution Centers has developed customized supply chain solutions. Barrett creates customized e-commerce fulfillment solutions for a variety of industries including health & beauty, cosmetics, apparel and footwear, consumer electronics, food, consumer packaged goods and automotive parts. With deep experience in the direct to consumer and retail omni-channel sector, Barrett can help businesses meet these new challenges.