Five innovations shaping retail logistics

Five innovations will influence retail logistics by 2020 according to global real estate advisor CBRE.

With e-commerce expected to comprise 20 per cent of all retail sales in the next three years, predictive ordering, 3D printing, personal outsourcing, ‘your home as a store retail’ and cherry picking will be the most critical innovations for the industry to embrace to meet accelerating consumer demand.

CBRE reckons that that 12.8 billion consumer devices will be able to connect to the Internet of things by 2020. The data will enable household appliances to learn habits of homeowners and place predictive orders. This technology will take away the pressure brought by next day or same day delivery demands for a huge amount of household products. As a result, logistics providers will be able to plan more efficiently and won’t need to focus as much on being as close to the consumer as possible. This will alleviate the costs usually undertaken by purchasing assets in the last mile.

CBRE predicts the increase in ability of 3D printing and reduction in cost will result in household penetration of circa 25 per cent in the next decade.

The ‘your home as a store’ approach is the developing solution to the growing rate of online returns, which has drastically affected profitability for a number of retailers in the last decade. The shopping concept encourages returns. The retailer sends out a selection of items and allows the consumer to select what they want and send the remainder back. This means that consumers have even fewer requirements to visit a physical shop. This will initially impact the logistics market with an increase in the volume of deliveries, however, after a few orders the retailer will have a better understanding of consumer taste and fewer but larger parcels of tailored products will be delivered to the home.

Personal outsourcing be it to people, or artificial intelligence and robotics as opposed to companies to undertake deliveries of groceries, clothing, gifts etc. is another trend to watch.