Retail's Shift to More Warehousing and Less Brick and Mortar Stores

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Retail's Shift to More Warehousing and Less Brick and Mortar Stores

Is Retail Going To Be a Thing of the Past?

Doubtful.

With some retailers closing stores, downsizing, and moving to warehouse distribution with online only stores, how will this truly affect the supply chain?

Rather than manufacturers importing containers of goods and then breaking them out into 10-20 different retail stores, they instead send the goods to 2-4 regional distribution centers.  It’s a cost saving operation on the front end, but there’s more to it from the back end.  They need to integrate their technology and shift their labor strategy to accommodate those smaller orders for their buyers.

Are they still saving money in the long run?

From the logistics side relating to truckload and LTL only, distribution and transportation will be much easier since they will only have one or two warehouses to deliver the goods to. The challenge, of course, is that they now must have increased labor, top-notch technology, larger warehouse space as well as regional distribution centers (something they may not have had in the past) to meet the clients’ needs in getting the products swiftly and cost-effectively.

The difference between shipping a handful of large shipments and hundreds of smaller shipments is a logistical shift retailers may not have faced before.

When shifting from a brick and mortar store model to an ecommerce model, retailers who’ve never had to deal with large amounts of small packages will have to cope with the change – and quickly.  Those retailers will need to negotiate rates with the small parcel players, or find a third party who can help lower the overall costs.

3PLs have buying powers that smaller retailers simply can’t, due to the scale at which they are able to negotiate rates.

Will the shoppers actually accept a store that moves to an online-only model?

Another issue will be whether or not shoppers actually continue to enjoy online buying only – will they accept not seeing the products in hand for an immediate purchase?

There will always be a need for retail stores that are located throughout the United States.  I don't ever see retail completely going away – and I’m not alone in thinking that.  Ken Morris, at Boston Retail Partners, says “

[Brick-and-mortar] isn’t dead, it’s evolving.”  

The common thread among many larger companies with physical locations is that stores need to provide an integrated shopping experience.  This is one reason for Amazon, the largest ecommerce company in the US, to have opened up their own brick and mortar stores.

Retailers today can only remain competitive if they provide consumers with a modern buying experience.

As retailers continue to try to determine what consumers want in their current buying patterns, they will have to have a large shift in the way they do business.

Implementing modern technology through the use of a TMS platform for LTL truckload and expedited shipments will be mission critical for the success of those retailers.

At Diversified Transportation Services we use our technology and implement our TMS into other provider’s WMS, such as SAP or Oracle. This helps our clients automate their processes, by which they can partner with 3PL's and Supply Chain innovators such as DTS.

I don't believe retail will ever truly go away as people like to shop.

Manufacturers and shippers of goods must continue to chase the way consumers purchase goods in today’s highly integrated world.

At the same time, retailers need to partner up with technology innovators (such as Diversified Transportation Services) who can help them manage the process regarding drayage of containers, truckload distribution into their distribution centers and of course LTL between distribution centers.

For more information regarding what DTS can do for you, reach out to us at 310-521-1200 xt 170 or email us at sales@dtsone.com

What Can DTS Do For You?

Whether you're a company looking to improve one facet of your supply chain, your entire supply chain, or simply looking for a transportation and logistics consultation, we can help.

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