The post-COVID retail challenge
COVID’s impact on the UK’s business and economic activity has been profound and few sectors have been more challenged than retail, with the industry having to adapt rapidly to online shifts in consumer behaviour driven by social-distancing and repeated lockdowns.
In the midst of the pandemic, eCommerce has experienced years’ worth of growth, with Zara, Nike and John Lewis all predicting that online sales will account for more than half of their revenues within the next two to five years.
Online grocery sales are up 80%, with 20% of households ordering groceries online, while the BRC-KPMG Retail Sales Monitor showed online penetration had jumped by a third.
According to the 2020 Korn Ferry UK Retail Chair survey, 35% of leaders expect to reduce their store portfolio over the next 12 months, with 8% planning to shut all stores entirely and move to an online-only business model.
Online sales are projected to account for up to 32% of total retail sales by 2024, which will massively ramp up demand for warehousing space, to support extensive picking and packing operations, driving overall additional requirements of 92 million sq ft, according to Knight Frank, while the British Property Federation (BPF) predicts that 69 sq ft of additional space will be needed per home to fulfil online deliveries.
Supply chains have been under massive pressure since earl last year, as logistics and warehousing serviced a country through ongoing lockdowns, with 85% of warehouse occupying companies reviewing their supply chain network specifically and 31% increasing inventory to avoid shortages.
As demand for warehousing space accelerates, this scarce resource is becoming increasingly rarer and more expensive.
Despite unprecedented disruption, retailers have demonstrated their resilience. Opening up and expanding new sales channels, while adapting and reconfiguring supply chains at pace, to meet their customers needs.
With vaccines now being rolled out across the country and optimism rising, it is time for retailers to secure their future and build resilience into their procurement and sales channels, by building supply chains that are capable of serving their omni-channel needs, with scalability, from source to consumer, to support continued and accelerating growth.
Decisions focused on infrastructure that brings the customer closer and supports innovation, will give them the sustained competitive-edge to act on every opportunity.
Strategically located to the east of London, Noatum Logistics’ ePoint Medway is 378,000 sq ft of scalable space, dedicated to super-efficient inventory management and eCommerce fulfilment, so that retailers and fashion brands can grow this critical channel, however quickly demand spikes.
‘Turn lockdown survival into post-COVID success – Download the White Paper’
