Two-thirds of warehouses are being occupied by retailers, and retailers have committed to long-term leases – up to several decades long. And while it’s been possible to adjust the supply chain, the shipping, warehousing hasn’t been so flexible. Most warehouses are left partially empty, because buying space that exactly fits your needs has been almost impossible – and leaves little room for expansion or contraction. But in a very fast moving industry, it leaves retailers in an old school, inflexible, logistics model.
All around the world, people are changing the way they shop. Ecommerce has double in value over the last four years and is forecasted to keep growing and near $4.5 trillion by 2021. Ecommerce retailers that appeared not too long ago have bloomed, we all use them, they are now doing better than ever with double digits YOY growth. And customers are now expecting faster and faster delivery – with order lead time soon to be under 1h. So the need for agile supply chains has never been felt as urgently.
But the good thing is that many retailers who are long on space are now looking to monetise that spare capacity – and turn a liability into an asset. They’re renting out their spare capacity, short term and on demand. And others are redesigning their warehousing network to use more regional multi-centres, to get closer to your customers. This is warehousing as a service.
The on demand warehousing model makes sense as it allow rapid prototyping of new business models and products with a low-cost go-to-market approach. While in more uncertain times (e.g. Brexit), when volatility is higher, it gives retailer the ability to scale their operation up and down to stay in tune with their business needs.
Stowga’s warehousing as a service is a new way to approach warehousing, and not only is it a step towards the future, it also enables you optimise logistics, which can cost you around 0.5-1% of retail sales when not following best practices.