3PL, dynamic supply chain, Fulfilment services, logistics, on demand, overspill
Warehouses are constantly searching for new customers, as the nature of their business requirements continues to evolve. The demand for warehousing in the UK has grown considerably over the past few years and in the UK, available warehouse space is at a record low. According to CBRE, vacancy rates were just 1.5% in Q321, versus 5% in the same quarter 2020.
It’s not hard to see which actors are gobbling up the capacity. Back in 2015, high street retailers were the dominant occupiers of bricks and mortar, but in 2021 the leading occupier group is 3PLs, with increased occupation levels of 42% and online retailers, who have increased warehouse occupancy by an astonishing 614%.
One billion square foot of new warehousing space has been built globally over the last decade, according to CBRE. This growth can primarily be attributed to the rise of e-commerce, and for every 1 billion pounds spent online, an additional 1 million square foot of warehousing is needed to service that demand. The increase in demand driven by e-commerce, means that it makes sense for warehouse operators to acquire customers through digital channels especially since this has become the norm for customers looking for warehousing solutions.
Traditional warehouses are being replaced by a new wave of fulfilment centres. A fulfilment centre is a warehouse where incoming orders for e-commerce are received, processed and filled. Once a fulfilment company receives a customer's order, they process the order for shipment before dispatching to customers. To stand out from the competition, warehouses must not only offer quality services but they must also be open to adopting new and innovative methods in an effort to acquire customers.
It is important to understand what methods have been used by warehouse operators in the past to acquire customers. First, we must look at how useful these channels are in the modern-day digital economy?
Traditional Warehousing Marketing Channels
Some of the marketing methods used by the warehousing industry include:
- Customer referrals
- Company websites
- Agents / brokers
- Adverts in newspapers
- Print media
- Networking events
- Street signage
Logistics has been dominated by human relationships for decades, where agents/brokers and customer referrals have been a large part of the industry’s success. Customer referrals are an important part of warehouse customer acquisition, given the additional credibility of a referral from an existing customer. Other popular avenues pursued by warehouse operators were newspapers and print media. This was an effective marketing channel used in the past, however, there has been a significant decline in newspaper readership, despite transferring print media content online.
According to the BBC newspaper circulation figures have declined up to 28% since 2013, and these figures are predicted to decline further in the next few years. This illustrates how traditional media methods are not getting warehouse operators/logistics companies in front of the correct audiences for successful customer acquisition.
Agents / brokers have traditionally been used by logistics companies to acquire customers, but how do customers know if they are getting the best deal?
How can warehouses use digital tools to acquire new customers?
Some of the digital tools used by warehouses to acquire customers include:
- Company website
- Search Engine Marketing
- Email Marketing
- Social Media - e.g. Facebook, Twitter, Linkedin
Many warehouses and logistics companies are using more digital channels of marketing to acquire customers. Warehouse operators are increasingly using email marketing campaigns and Linkedin email campaigns in an effort to acquire customers. This includes deploying ‘push’ and ‘pull’ marketing strategies and creating tailored content to engage target customers. Search engine marketing or optimisation (SEO) tools have also become increasingly popular, for example, Google analytics provides insightful data metrics on the number of clicks, and visits to company’s website, and other detailed metrics related to customer engagement.
Most warehouses today have a company website, however, warehouse operators require a certain amount of brand awareness to drive customer traffic to their websites to generate a sufficient number of enquiries. Most companies need to hire a marketing resource, in addition paying for adverts across various digital marketing channels, both of which are costly and have an unknown return on investment. Not all warehouses can afford to spend thousands or millions of pounds per year on marketing, and there is not a ‘one size fits all solution’. This presents a high risk for warehouses, a risk not all logistics companies can afford to make.
The Stowga Marketplace
Stowga has created a marketplace that solves many of these issues.
Stowga has been designed to help owners and operators of warehouses to get the most out of their assets. Suppliers consist of 3PLs as well as retailers who have excess capacity for parts of the year (known as greyspace). The platform allows suppliers to list their space on the Stowga marketplace. Stowga then advertises all over the world to bring in customers to fill that space - allowing their suppliers to get on with business, without spending precious time and money.
Suppliers are not using Stowga just to save money; they are using Stowga to make money. Household names like ASDA are using the platform to optimise their portfolio and bring in extra income on what would otherwise be redundant space. The platform was launched in 2016, and has matched customers from every corner of the planet with warehouses up and down the UK, bringing in millions of pounds worth of additional income to its suppliers.
Rob Symons, Commercial Operations Manager, from ASDA comments:
“Using the Stowga Platform helps bring opportunities that we would otherwise never see, and it allows us to market our space, on our terms, to make the most of our warehousing assets."
Based in London, Stowga is the largest On-Demand Warehousing Marketplace servicing the UK and global markets. Its clients include 3PLs (Third Party Logistics), industrial property owners, and partners with vacant space within existing commercial warehouses.
But the main aim is to add new operational functionality to the marketplace that ushers in the era of fully flexible and efficient logistics services for customers worldwide. What this means in real terms is a streamlined Control Tower type functionality with an intuitive dashboard and collaborative end-to-end fulfilment tools for customers to optimise operational efficiency and control costs, whilst maximising Customer Service delivery.
Marketing is expensive and is an unknown return on investment. As more and more people go online to search, access and buy goods or services; businesses have to have an online presence if they are to compete in the new digital economy. Digital marketing requires a niche skill set and so unless you are prepared to build that expertise in-house, it makes sense to leverage a marketplace designed to aggregate supply and demand. An online marketplace that is a free marketing channel. There is absolutely no downside.
There has to be a behavioural shift in the methods warehouses use to acquire customers, and the competition within the industry is fierce. The demand driven by e-commerce retailers means the effectiveness of traditional marketing methods used to acquire customers once upon a time has diminished and become less effective. Digital channels are effective, but they are expensive to use, and not all logistics companies can afford to dedicate significant amounts of money on a marketing budget. It makes much more sense to use a platform with one sole purpose - to match customers with warehouses.