I will not be talking about futuristic garden sheds, much to the dismay of the green-fingered and DIY enthusiasts among you. Instead, I would like to highlight warehouses, in particular those that are used by retailers. These 'silent beasts' behind retail businesses are coming to the fore as the rapid adoption of digital technologies is transforming the way consumers learn about products, make choices, complete purchases and ultimately expect to receive goods as discussed in Deloitte Real Estate's latest report, The shed of the future'.
As consumers we now expect to access products rapidly and conveniently, anytime, anywhere – rather than just in 'traditional' shops. Retailers are responding to increasing consumer expectations with flexible and more immediate pickup and delivery options. In the race for convenience retailers hope to win both customers and their loyalty. Therefore, it is the supply network that must adapt and warehouses in particular are expected to play a pivotal role.
The characteristics of the real estate that forms part of the
optimal distribution network will vary depending on the type of
retailer and its particular goals and challenges. A growing
appetite for personalised goods from computers to T-shirts will
require a greater degree of final stage production taking place in
the warehouse, putting further pressure on space and the need for
additional staff. Our report highlights several considerations
including location, size, flexibility of space and product
returns.
The impression that some people have of warehouses is of great big
buildings on the side of motorways and on industrial parks. While
huge warehouses won't disappear from the landscape, the reality
is that they will increasingly work in tandem with others closer to
home to meet our growing demand for rapid delivery. We expect to
see the rise of urban sheds to further cut down the time taken to
fulfil that so called last mile to your doorstep. For retailers
that can successfully adopt this strategy, this proximity will also
give them a critical advantage over their competitors.
So, as demanding consumers, we are changing retailer's
distribution strategies. The next time you see a big shed on those
long motorway drives, or walk past an industrial park on your
Sunday stroll, don't discount them as a blot on the landscape,
but rather as a calculated location choice to better respond to the
consumer and as a means of getting those 'must-have' shoes
to you by next day delivery.
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