Widespread same-day delivery won’t be viable this year or next for most retailers. Why the delay? Especially when topics like drone-delivery have become regular dinner table talk?
It all comes down to the logistics networks that currently support the majority of retailers. These systems, with few exceptions, were based on a model developed before the e-commerce revolution. To achieve widespread same-day delivery and achieve their omni-channel supply chain goals, retailers need a new underlying logistics strategy. Here are some ways that omni-channel retailing is influencing distribution center network location and design:
1. Proximity matters: When success is measured by achieving faster dock-to-doorstep times, the simplest answer is to reduce the distance between product and customer. There will be a higher price tag for real estate in hot markets close to large customer bases, but the added go-to-market agility may be worth the expense.
2. Emerging facility types: Speedy deliveries also depend on efficient and specialized systems, from order processing, picking, and packing, to delivery. Retail logistics can become even more productive, ultimately increasing the value of real estate investments and strengthening the entire logistics supply chain. This infographic details the emerging facility types, along with key building and location attributes.
3. Flexibility: Logistics strategies should reflect emerging customer buying patterns. For example, online grocery orders are expected to grow, driving demand for multi-temperature e-fulfillment centers.
While actively tending to long-term logistics strategy updates, major retailers are using existing networks to bridge the distance between product and customer. For example, several big box retailers are already using bricks and mortar stores as miniature online fulfillment centers.
Is your distribution center network omni-channel ready? For ways to reconfigure your supply chain to meet customer’s needs, click here .
By: Kris Bjorson, head of JLL’s retail, e-commerce and distribution division