3 Reasons temporary distribution operations are becoming a permanent fixture in E-commerce

By Joe Farrell, Vice President of International Operations at PFS

Thanks to affordable short-term leases and advances in technology, the concept of pop-up facilities in retail is presenting brands in the UK with an agile alternative to traditional commerce operations. Whilst retailers large and small have been embracing the modern pop-up since 1999, the concept of the pop-up distribution centre is still a fairly new one. Here are 3 reasons temporary distribution operations are becoming a permanent fixture in E-commerce.

1. Increased flexibility

With service level expectations only getting harder and harder to meet – having a flexible approach to order fulfilment is crucial. For the majority of consumers, next day delivery is a standard requirement and retailers who can’t keep up with this risk losing out to the competition.

Due to their flexible nature, non-traditional fulfilment methods such as pop-up distribution centres and space-on-demand warehousing could provide a flexible and cost-effective solution to this. Pop-up distribution centres can be deployed anywhere across the globe and help online retailers get their products closer to the customer. Current ambiguity over the effect Brexit will have on cross-border trading, means that it is more important than ever for brands to be agile and able to respond quickly to the growing needs of today’s consumer.

2. Quick to implement

Alternative fulfilment technologies can also be extremely effective when scaling up. Whilst the rise of social commerce has offered brands an easy and quick way of reaching their customers, it is also transforming current expectations in relation to delivery. If customers can order products at a click of a ‘Buy Now’ button, then they expect the delivery experience to be just as quick and seamless.

Pop-up shops in this instance could be the answer for brands who may not have the right infrastructure, ability or expertise in-house to react to customer demand. The flexibility of this solution can also allow growing brands to test the waters in new geographies and approach new audiences without having to commit to a permanent facility, reducing initial capital outlay and representing better value for money.

3. Perfect for peak

Keeping up with peak demand and seasonal events such as Christmas, Black Friday and Cyber Monday can be extremely challenging for e-tailers. Often brands will find that their current facilities will not support peak volumes and that extra warehousing will be needed. Designing and implementing another permanent facility can be costly and extremely time-consuming and often brands will find themselves with very little time to react. Pop-up distribution centres take little time to implement and at a low cost can be tested during off-peak periods.

Whilst it could be perceived as a ‘short-term’ or ‘temporary’ solution to online order fulfilment, the pop-up distribution centre is a very necessary tool for the multitude of businesses looking to compete in the current volatile retail landscape. Due to their flexible and low-cost nature, retailers embracing pop-ups will be able to enter new markets without the need for permanent investment. By doing so brands can serve customers quicker and more accurately, resulting in increased customer retention and a strong ROI.

Implementation of non-traditional fulfilment methods, underpinned by technology, will be key to success in today’s fast-paced and competitive retail landscape. Ultimately, being able to reach customers quickly and efficiently will be key to successful growth in the retail sector.

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