How New Global Storage Trends Influence Retail Business Models

Published on 2020-04-15

Not so many years ago, the stock of a small business was resolved with a warehouse where to keep the surplus of merchandise and to stock up on the necessary material when the seller ran out of stock in the store.

However, with the advent of electronic commerce, consumers can now purchase items directly from the warehouse at a click of a button, which has forced retailers to drastically change their traditional methodology for more global ones and reformulate their business model towards another more focused on online sales.

This change has made the small business owner have to adapt to the new times and be more competitive. You will also need to improve your order and supply chain management, as well as your responsiveness to customer demands, to meet, for example, product lead times.

Key trends in global storage

The digital transformation also affects the retail trade and therefore its storage and sales procedures. It is necessary to take this into account if we do not want our business to be left behind. Some steps are being put in place to make the small business order system, supply chain and shipping process faster and more efficient.

And most importantly, all of them consider the needs and economic capabilities of the retail entrepreneur and are key to meeting the demands posed by customers:

• Digital warehouses for fast shipments adapted to customer needs. When a customer places an order or an online purchase on the web, he wants to receive it as soon as possible. You are no longer willing to wait weeks for a product. You want to have it at your destination in a few days and even hours if you hire a premium service. Therefore, working with traditional warehouses and standard employee shifts is no longer an option. We must bet on digital and automated processes that allow 24/7 customer service and attention.

• Local warehouses in various locations and 24-hour professionals. Rotating work shifts and warehouse diversification provide more consistent, faster, and more efficient customer service, as distances and times are significantly reduced.

• Convert your store into an order centre. This means that your retail business would have to be a store and a warehouse at the same time. In this way, you can deliver products directly from the store or have the products on hand so that the customer who has placed the order online can pick it up at the store if they wish.

From Naeco, previously Nortpalet, we recommend you in any of the above options: Use sustainable and efficient logistics and packaging solutions in the warehouse. To manage storage and inventory in an efficient, sustainable, and environmentally friendly way, it is necessary to convert the warehouse into a greener space. For this, packaging and transport logistics solutions can be used that rely on recyclable and reusable materials such as Naeco's plastic pallets for stock storage up to sustainable packaging for shipments to the end customer. 

How is supply chain management changing?

The digital marketplace has transformed the traditional business model. In relation to supply chain management. These are some of the consequences:

• Immediate ordering process and ongoing fulfilment. Distribution companies and retailers that sell online are required to be available 24 hours a day, as delivery is often required overnight or early the next day. This means that there must be a digital system capable of processing orders and shipments immediately to comply with the delivery plan requested by the client.

• Achieve more intensive management and better inventory control. Distributors will have to hire more management staff and use state-of-the-art logistics software generation. It is the way to ensure that the supply chain continues to function quickly and effectively.

• More technology and automation. Automation is key. Thanks to it, supply chains can carry out faster shipping and delivery processes. Betting on technology is essential to always keep up to date with orders.

• Larger warehouses. Companies that are forced to find or manufacture a new product must ensure that they have larger warehouses or have enough warehouses to hold all their merchandise.

• “Last mile” logistics. One of the great challenges of the supply chain has always been to efficiently travel the last stretch of distance between the local receiving centre and the recipient to deliver the requested product on time. To solve this logistical problem and gain agility, it will be necessary to find new and innovative ways that allow us to cross that "last mile" without setbacks.

• Reverse inventory and logistics dynamics. L, the current dynamics has taken a 180 degree turn with respect to what has been done. Nowadays, the trend is to offer products found in other warehouses and to manage their own logistics system to obtain products and take them to their destination.

All these measures are key for retailers with an online presence that want to improve their warehousing processes, accelerate their supply chains, and revolutionize their order delivery and shipping system.