What is on-demand warehousing?
- On-demand warehousing offers businesses and retailers the ability to access warehousing services as and when they need them, without the need for costly, long-term commitments. Following a rise in demand, there is now a growing online marketplace that allows businesses to tap into unused warehouse space across the world.
- On-demand warehousing is also known as pop-up storage space or pop-up warehouses.
- Similar to the way in which Airbnb operates, on-demand warehousing operators match businesses who need storage space to warehouse providers who have excess capacity. Unlike traditional warehousing, on-demand warehousing allows businesses to take up smaller, more cost-effective amounts of space across a wider range of locations, at a much quicker speed.
The benefits of on-demand warehousing
- Finding on-demand warehousing is quick and simple. Often, businesses and retailers will be able to choose from a list of providers that meet their storage space needs, and storage can be arranged in just a matter of days or weeks.
- On-demand warehousing is highly cost-effective. Unlike traditional warehousing, on-demand warehousing involves no expensive startup costs or project setup fees, and operate on a pay-per-use basis, where businesses only pay for the space they need. There are no long-term leases involved.
- On-demand warehousing allows businesses to find flexible space at short notice. In the instance of supply chain disruptions, seasonal peaks, or unexpected issues, this can be extremely useful.
- On-demand warehousing gives businesses and retailers flexibility by allowing them to scale up or scale back the amount of storage space they have. This can help businesses test and trial new strategies, and optimise their plans based on what is or isn’t working, or amend strategies in locations where demand is rising or falling.
- As businesses can be selective about the geographies of their storage space, on-demand warehousing offers a cost-effective way to meet consumer expectations around delivery speeds, offset large-scale storage costs (through the pay-per-use charging model) and place specific types of stock nearer to intake centres or high-demand consumer locations.
The rise of on-demand warehousing
- Tech giants such as Amazon have rapidly changed consumer expectations. Near-instant delivery times and an ever-growing variety of delivery methods (such as next-day delivery and collect-in-store) are forcing businesses to adapt.
- In fact, Amazon recently promised Prime members one-day delivery times. In this world of ‘instant' and 'convenient', on-demand warehousing allows retailers and businesses to stay competitive, flexible and meet these new demands.
Examples of businesses using on-demand warehousing:
- In the U.S., the world’s largest hardware retail cooperative, Ace Hardware, noticed an opportunity to provide emergency support after Hurricane Harvey. The business used on-demand warehousing to store bulky items (such as generators and empty propane tanks) which were needed to support areas impacted by extreme weather during the 2018 hurricane season.
- Walmart uses on-demand warehousing to add e-commerce fulfilment centres to its real estate portfolio in order to keep up with seasonal peaks. In doing so, it has comfortably met the annual rise in demand during Black Friday and Cyber Monday events. On-demand warehousing allowed it to ship out thousands of orders during a three-month timeframe and achieve a ship-on-time rate for 99.9% of deliveries.
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