Will fulfilment centres become a local trend in the future?

Posted by Barloworld Logisitics on 23 Nov 2018 10:00:00 AM

BWL Fulfilment Centres

2018 has seen a 19% upsurge in local online sales with South Africans predicted to spend in excess of R45 billion online before the end of the year. This trend is expected to escalate even more over the coming 24 months, with an estimated complete spend of over R60 billion in 2020, which will display a 36% increase as of 2018.

While consumers demand increased convenience and quicker delivery from online retailers, ecommerce sellers would be well advised to begin conceptualising well thought out strategies to address evolving demand. One such strategy is that of micro-origin fulfilment centres, a trend which is accelerating internationally yet is still to gain traction locally.  

A micro-origin fulfilment centre is the concept of placing small scale warehouse facilities in convenient, accessible urban areas, near the end consumer. Certain micro-fulfilment centres have their own dedicated buildings, while others inhabit spaces that are part of existing urban infrastructure, for instance central car parks, basements of office buildings or stockrooms of local stores. The deployment of micro fulfilment centres will enable the fast delivery of goods, ensuring more affordable and seamless service, while assisting in relieving congestion in urban cities and crafting new opportunities within our economy.

Micro-fulfilment allows for the opportunity for individuals to monetise their excess space while assisting to facilitate logistics processes. The new trend also provides businesses with increased flexibility and finely tuned storage facilities with better opportunities to keep goods as close to the customer as possible for speedy delivery. Micro-fulfilment allows businesses to take a granular approach while offering the opportunity to seamlessly match products, storage spaces and demand tailored to specific areas.

In the bid towards delivering goods faster at a lower cost, online retail replenishment supply chains are also contemplating operational environments that move away from high racking and more towards highly condensed, mobile robotic storage on the floor with lower ceilings and single product units brought to the picker, who then selects one or two single product units depending on the order, and then sends the inventory on its way. 

Research house Frost & Sullivan anticipates global urban supply chain spend to escalate from over R34.8 trillion to nearly R83 trillion by 2020. Urban Industrial, residential, and business office owners will need to learn to work together to improve delivery and micro-fulfilment centre may be the viable solution.

Enjoy this article? Subscribe to our insights to get posts like these delivered directly to your inbox

Subscribe to our insights

Topics: Trends