What is the impact of multichannel trading on distribution? It’s a tough question to answer, but there are clear trends emerging.
A new Deloitte report on the evolution of distribution suggests that the location of warehouses is becoming ever more important as demand for shorter delivery times grows. For retailers who aren’t able to rely on a network of stores to help them fulfil orders quickly, this could involve building more distribution points – but not always large regional centres.
Small urban logistics facilities are growing in importance, Deloitte’s report says. “They have become recognised as a way to facilitate the drive for convenience and faster delivery times. Located on the doorstep of both residential and business customers, the urban industrial building will increasingly serve as an integral part of the ‘last mile’ delivery process,” the report says.
However, urban warehouses will need careful planning if they are to work well, especially in very built up areas. Plus, they are likely to be expensive to rent or buy – well-located urban property is not easy to come by in some cities.
It may be that not many are needed – just a couple to ease the load on the bigger DCs. Strategically placed regional distribution centres will remain the lynchpin of a retailer’s distribution network. Smaller city hubs, however, could become an important part of their delivery arsenal.