Retailer hit tipping point for future warehousing needs

A new survey of the top 100 retailers by TLT Solicitors into the effects of online shopping states that retailers have hit the tipping point and now face unprecedented pressure to adapt their warehousing and logistics to meet changing demands from consumers.

The report entitled ‘Retail Agility Full Speed Ahead: Meeting the delivery challenge in Uk retail’ said: “Consumer motivations are many and varied, but three quarters (74 per cent) of retailers say expectations around rapid delivery are driving investment in logistics. While having the right product and the right price will always be important, this suggests that speed of delivery is now also a deciding factor for consumers when making a buying decision.”

For the current 62 per cent of retailers offering next day delivery or faster, competition will increase with 83 per cent saying they will offer this in future. An increase int eh numbers promising same day delivery is also set to increase from 19 per cent to 29 per cent.  This is leading to 25 per cent increase in the amount of money spent on logistics up from 9 per cent on average to 12 per cent of total revenue.

In terms of warehousing retailer are expecting to need to increase their total warehousing by 15 per cent over the next five years with some looking at up to a 42 per cent increase in warehouse floorspace.
With the top 100 UK retailers having on average just four central distribution centres in the UK and the number offering same day delivery options expected to increase, two-thirds of those surveyed believe urban warehousing (66 per cent) and urban lockers (67 per cent) will become a genuine trend.

The majority (64 per cent) of top retailers expect urban warehousing to take place in retail parks. With many retailers frustrated by a lack of suitable warehouse space per se (38 per cent) many are considering to enter sharing arrangements with other retailers and non-retail business. The proportion investing in their own warehousing to improve logistics and fulfilment is expected to drop from 42 per cent to 19 per cent while the proportion investing in shared user is expected to rise from 14 per cent to 20 per cent.