Businesses throughout the UK have experienced unprecedented disruption over the last 12 months. None more so than the warehouse & distribution sector. Whilst measures such as wearing masks, social distancing, and remote working are expected to be temporary, new government regulation and consumer behavioural habits look like they are here to stay.
Reports suggest an increase of 77% in online sales in the last 12 months.
Adherence to these measures has had a devastating impact across the UK and EU, causing significant disruption throughout the supply chain. The ripple effect has seen transportation delays and warehouse closures which have resulted in missing or delayed supplies, whilst with some companies, the opposite has happened, and they have been left with excess inventory.
Businesses we work with throughout the UK have been quick to react and are now preparing to embrace the new “normal” and are even future-proofing their business with Green initiatives and the governments super-deductions initiative. We’ve been able to assist financially with stabilising supply chains enabling warehouses to implement short term adjustments and meet consumer demand to the best of their ability.
Whilst some consumers are keen to return to normality; research suggests that the way people shop will look very different to pre-pandemic levels. A survey carried out by Bizrate found that 32% of people who would typically buy in-store will now favour online shopping. This consumer trend is evident that a new landscape is evolving faster than previously expected.
We look at three of the immediate changes that are expected to occur across the warehousing and distribution sectors throughout 2021 and beyond.
Increased warehouse capacity
As the demand for prime office space has declined over the last 12 months, the demand for warehouse space has increased tenfold. Companies have adapted to the change in consumer purchasing behaviour and the disruption to supply chains; the result has seen businesses being forced to hold more extensive inventories. Space has become a vital part of many businesses continued expansion plans, particularly whilst adhering to social distancing.
While already forming part of many modern warehouse facilities, automation is an area where we see companies adopting even faster due to new legislation and working conditions. Automated storage and retrieval system (ASRS) and inventory management software are two areas we are talking to clients about and assisting with their financial plans as they look to invest and develop their projects.
Smaller decentralised warehouse locations
To deliver on consumer expectations, same day or next day delivery is becoming more and more common. Manufacturers and retailers are taking a more strategic approach to their storage and distribution channels to reduce the risk of supply chain issues. Investing in strategic locations or hubs across the UK will help reduce transportation costs whilst lowering their carbon footprint.
We’re continuing to assist our clients with their expansion plans and financing requirements to reflect the future of warehousing and distribution for 2021 and beyond.