Adapting to a changing landscape
I recently had the pleasure of attending the UKWA National Conference in Chesterfield, which provided the perfect occasion to catch up with old acquaintances and to debate the current trends dominating the industry. During the two-day event, I was pleased to take my place on a specialist panel alongside John Munnelly from John Lewis and Lucas Dawe from GIST, for a session exploring the evolving nature of the relationship between the retail and logistics industries and adapting to a changing landscape.
It proved to be a thought-provoking session where we examined and debated a number of issues and I thought I’d take this opportunity to share some of the key highlights:
Land is at a Premium
During the discussion it was agreed that warehouse space, and suitable land for building new warehouse facilities, is currently at a premium. In turn, this could eventually have a negative effect upon industry growth as existing capacity reaches its natural limit. We also heard that many 3PLs are now going head to head with property developers for the same land. Unfortunately the builders are equipped with more substantial budgets and are therefore outbidding many logistics providers – which will only exacerbate the problem even further.
Location, Location, Location
A key takeaway from the panel discussion was the ongoing shift in the marketplace with regards to the location of warehouses. It was agreed that the Midlands remained the obvious destination of choice, in terms of convenience, an ability to quickly reach for North and South within a couple of hours, and strong transport links – however the North West is now growing in popularity for both retailers and logistics providers alike. There is currently more availability across the area and the North West also has quick access to a number of busy ports and motorways. Warehouse space is slightly cheaper across the region too, which is advantageous at a time when retailers are being affected by tight margins. Growth in demand in the North West has recently seen my organisation invest £1.7m in a new high bay pallet racking system at our warehouse in Wigan, which effectively doubled the capacity to 34,000 spaces.
A One-Stop Shop
Outsourcing was also high on the agenda during the conversation, especially with regards to how retailers and manufacturers are moving away form operating their own warehouses in favour of a “one-stop shop”. For instance, many retailers are now benefiting from outsourcing their storage, fulfillment and delivery functions, including a reduction of costs and having access to specialist knowledge and innovative technology and software. We are seeing our customers enjoying added flexibility around storage and volumes with the option of value-added services, all without the strain of extensive capital outlay.
Awaiting Good News
Delegates also heard that the retail sector and consumers are waiting to hear some positive news regarding Brexit, and once that arrives there is a general feeling that consumer confidence and inflation will grow for the next two to three years.
In conclusion, there was a general theme throughout the conference that retailers and their logistics providers must continue to evolve and adapt their operations to remain as efficient and profitable as we navigate this prolonged period of uncertainty – and both industries can benefit from closer collaboration.
By Adam Jones, Business Development Director, ArrowXL