As ecommerce volumes scale back to more normalised levels compared to last year’s pandemic driven peaks, demand for inventory fluctuation solutions continues to be strong among brands and retailers.
As consumers, we have transformed the way we shop from traditionally brick and mortar to predominantly online. Retailers have a range of new technologies now available that can analyse and optimise the online consumer journey for greater sales conversion rates and reduced product returns such as AI, cognitive search, and digital journey mapping.
However, the logistics network that supports this new way of shopping, failed to change with it. The rise of eCommerce made it clear that the traditional methods for managing warehousing and fulfillment weren’t going to work. As a result, an entirely new way to manage storage, fulfillment, and distribution emerged. Enter on-demand warehousing & distribution.
What is on-demand warehousing?
On-demand warehousing is an online marketplace that connects companies who have surplus warehouse space with businesses that need more warehouse space. This service is suited to businesses who only need it temporarily and are thus prepared to use the service on a pay-per-use basis.
Why is there a demand for on-demand warehousing?
Logistics networks were built to get goods to shop shelves, not to customer’s doorsteps. Retailers’ options were limited to a 3PL fulfilment service or purchasing their own warehouse. On-demand warehousing offers brands a scalable, flexible warehousing solution.
While it can be more expensive than traditional methods, it may be worth the cost. Retailers and brands can build elastic logistics strategies to support the myriad of ways customers shop today whether it is online, pop-up shop or omnichannel.
With less than 1 in 10 ecommerce brands exceeding $1M annualised revenues and fewer than 1% of brands exceeding $100M annualised revenues, on-demand warehousing and distribution offers significant opportunity for brands and retailers to scale flexibly at speed and maintain the lowest total cost.
On-demand warehousing and distribution offers significant opportunity for brands and retailers to scale flexibly at speed and maintain the lowest total cost.
For example:
- If your business experiences seasonal high demand then it does not make sense for you to commit to a large warehouse indefinitely. On-demand warehousing gives you access to short-term storage, so you have a place to put large amounts of inventory. You can scale the size and capabilities of your warehousing and fulfillment network to match varying demand and manage expected and unexpected inventory fluctuations throughout the year.
- If you’re rapidly expanding your business and don’t want to commit a large amount of upfront capital to a logistics network that you’re going to quickly outgrow, on-demand warehousing provides a pay-as-you-go, scalable solution.
- If you’re looking to expand into a new market and don’t have the resources to manage the sourcing and procurement process for every new fulfillment center yourself, on-demand warehousing lets you tap into a network of warehouses.
Will I receive the same visibility?
Yes, possibly even better. On-demand warehousing comes with advanced tracking and product supply chain management where every step of the value chain from online store to proof of delivery can be connected through API.
This connectivity spans across order management, warehouse management and transportation management systems to enable data tagging, sharing, tracking, and analysis for tailored consumer journey experiences using advanced business analytics.
We connect warehouse providers who have excess capacity and services with retailers and brands who need flexible solutions. We help retailers and brands secure warehousing and fulfillment solutions quickly and with no long-term commitments or costly setup fees.