Marketing & Communication
In the past few years, consumer expectations have risen steadily. Starting from free shipping, through speedy deliveries we’ve come to the point where shoppers expect their parcels to arrive even on the same day or in a matter of hours with an excellent customer experience and accurate tracking options. Retailers know that it’s important to adapt to the customers’ ever-changing expectations, to avoid becoming irrelevant.
The process of providing an excellent customer experience begins in the warehouse. The inventory needs to be accurately labeled from the start so as not to lead to a scenario where inventory is out-of-stock, fulfillment is delayed and customers are unsatisfied. Both with the rise of the demand for same-day delivery and the increasing lack of warehousing space, warehouses need to adapt and move closer to the consumer – to the cities.
More retailers adopt the ship from store model, where the brick and mortar shop doubles as a smaller-sized warehouse where the consumer can easily pick up online orders or have items shipped from the city center to increase the speed of delivery.
Micro-fulfilment has the potential to transform last-mile logistics, solve pressing fulfillment issues of space and changing consumer expectations. Along with this, warehouse automation is becoming more popular among retailers. Chinese JD.com opened a smart warehouse last year, of around 1 km2, which employs only 4 people. It combines AI, robotics, as well as image scanning to sort up to 16K packages per hour. In the future, we could see the number of retailers leveraging in micro-fulfillment and warehouse automation increase, as it’s an effective way to streamline e-commerce fulfillment supply chains. This, combined with the growing number of small-format stores in city centers worldwide, could suggest that these urban micro-fulfillment centers may eventually merge with small urban stores in the upcoming years.