“In the past five years, eCommerce has changed the way we shop. While online sales continue to grow at almost 50% per year, the biggest growth is coming from the online food and grocery segment,” says Chris Harper, managing director of eCommerce consulting firm FOODara.
eCommerce for warehouses, or eCommerce warehousing, refers to the delivery of goods and services in a seamless fashion. This is especially true for those warehouses that involve either the exchange of goods and services or the collection and delivery of goods and services from any online seller.
eCommerce has already changed the way people shop. The shopping experience is very simple – a shopper purchases something online, and a product is delivered to the doorstep.
This is changing the way businesses operate in the warehouse as well.
Let’s look at some key factors for success in the future of warehousing:
– 5G – The 5G network will help with future business transformations. Several startups are building purpose-built warehouses that use the latest technologies and enable greater efficiency.
WeWork and WeFactory are two startups that are doing exactly that. Warehousing is a space that has a lot of constraints. The top constraint is time. If the warehouse is slow, then it will impact your business immensely.
– Artificial Intelligence – The introduction of AI into warehousing has fundamentally changed the way as well as the speed of distribution. The software isn’t perfect, but it can handle massive orders at once.
Most interestingly, Artificial Intelligence’s ability to customize the buying experience takes advantage of clearing out additional warehouse inventory by utilizing the upsell technique in ways that customer service personnel never could.
Because it has made eCommerce a necessity in the modern-day world. Companies, regardless of their size, have realized the importance of delivering goods efficiently.
And, companies like Amazon and eBay have managed to change the way people shop online and allow them to purchase goods from anywhere in the world. And, it’s only going to get more interesting from here on out.
You see, the shopping experience for most of us, who are not major eCommerce players, is not particularly exciting. It involves visiting a website, where you get to browse through a bunch of stuff in your mind.
There is a process of selecting something, paying, and shipping. Not too exciting. And, the costs for this are usually high. This is where traditional warehouses step in.
eCommerce Is a Game Changer for Warehouses
If the past decade has taught us anything, it’s that technology is always making things simpler and faster. The digital age has made it easier than ever for us to shop from anywhere, without breaking a sweat.
We have easy online payment methods, better delivery options, fast delivery, and low costs.
An eCommerce-driven supply chain will become more sustainable. We all know that the pace at which digital technologies are evolving is huge. However, the biggest effect of eCommerce isn’t just about reducing the cost of delivering and logistics.
Instead, it’s about changing the way we design and build out our supply chain. Robotics is changing the manufacturing process and changing the way factories operate.
But at the same time, automation technology like robotics is often too expensive for the small-medium-enterprise (SME) segment of the supply chain. Enter augmented reality (AR) and the creation of virtual models which can be used to save costs and bring smart products to the masses.
While the methods used to create physical goods have changed throughout history, warehouses have remained largely unchanged over time. Warehouses are massive facilities, where products are stored and shipped for a wide range of industries.
So the need for these facilities isn’t coming from an absolute lack of innovation; rather, these factors simply mean that people are not only expecting products to be delivered quickly, but also that these deliveries will be personalized, customized, and flexible.
The reason we see such rapid innovation in eCommerce and robotics is simply that those three products are now central to the process of creating physical products.
Most warehouses are built based on the physical needs of the company, as well as the needs of the shipping and receiving process. However, the need to warehouse goods for the consumer market has changed greatly over the past few years.
Warehouses are now used by a wide variety of companies, including eCommerce firms and retailers, as well as other industries. The products they are storing, and the goods that they are moving, are much more diverse than ever and require modern warehouse systems to keep up with the demand.
The traditional warehouse is evolving, and it’s starting to look more like a lean manufacturing system (LMS). But the LMS is not enough to meet the needs of the modern shopper and consumer.
Warehouses are being converted to become the central hub for a supply chain. With this change, traditional warehouses will be more like distribution centers.
The center will control the flow and availability of the product with real-time data while supporting the entire supply chain with a single call to action.
Shops are transforming into digital ecosystems. Digital technologies and sensors are becoming increasingly important in real-world warehouse operations.
Warehouse equipment systems are increasingly becoming automated, using Internet of Things (IoT) sensors and interactive and real-time monitoring applications.
Prepared for the future today, many industrial manufacturers and logistics service providers are already using high-tech robotics to keep in line with the demands of 21st-century consumers and the rapid advancement of eCommerce.
RFID stands for Radio Frequency Identification, which is a technology that enables the automatic identification of specific objects, products, containers, or goods. Information embedded in the RFID tag can be read wirelessly via radio waves, which then serves as an identification system.
The RFID technology, or Radio Frequency Identification (RFID), has taken off in the past years, with companies like Amazon, Walmart, and Best Buy all having their versions of RFID in their warehouses.
Improving inventory management and shortened delivery times are extremely important in this industry, with a new forecast suggesting that by 2020, more than half of all shipments in the US will be digital.
When you look at the future of warehousing, many things stand out: Robots that pick goods from the shelves, warehouses that run autonomously, advanced inventory management software and RFID technologies to date have been more of an afterthought that helps retailers track inventory.
However, as eCommerce continues to grow, RFID will play an integral role in warehousing since it will help retailers fulfill orders more efficiently.
Let’s begin with a drone. You’ve probably seen them at airports. You might even have flown one yourself – but even if you have, you probably didn’t realize that the next time you fly one, it could be out at a warehouse.
What could go wrong with that? Turns out, quite a lot. “Drones come with their challenges, but they can make the difference between success and failure when moving goods around your warehouse,” claims John Haan of TripleTruck.
“The sheer speed of the movement, and its accuracy, is where they excel – especially if you’re moving enormous amounts of stock.” You might not be used to seeing a drone at a warehouse, but it’s not just the tech that’s changing.
According to the International Federation of Robotics, robots now replace more than 30 percent of the work done by humans in factories around the world. This has wide-ranging implications for a sector that has long been dominated by human workers but will also reshape warehouses as physical workplaces.
We have already seen this happen in retailing, with traditional mega-warehouses, like Amazon’s fulfillment centers, acquiring their warehouses, investing in developing robots, and leasing them out to other retailers.
Once warehouses were physical spaces with dedicated machinery and equipment that allowed for mass production. However, with the introduction of the internet and widespread internet adoption, it was quickly realized that shipping and receiving can be done more efficiently using the internet.
This led to the emergence of online marketplace platforms, which offer up online versions of the goods warehouses currently provide. These platforms allow for the sale of pre-packaged goods to be delivered almost anywhere in the world.
In fact, as of 2017, there are over 20,000 stores that offer same-day delivery, compared to the two that did at the beginning of the century. One of the more recent trends in warehousing is cloud computing.
The warehouse industry is the backbone of the entire eCommerce ecosystem. This important service is performed by a range of different employees, including inventory managers, delivery drivers, warehouse workers, maintenance and repair personnel, and more.
They’re responsible for maintaining a safe and secure environment, ensuring the highest levels of efficiency, and making sure that the warehouse is equipped with the proper stock and tools.
Today’s startups in a way offer a unique business model compared to traditional businesses. Small and medium-sized businesses as a rule of thumb rely on hard-to-access warehouse space, inventory management, and shipping that tends to be a real pain.
And “Big Business” is making it increasingly difficult for them. By providing a wide range of services, startups along with small and medium-size businesses are digging in with the hope that they will grow and expand further.
The logistics, as well as the inbound shipping and return processes, can be a nightmare for most startups, so to help solve this problem, startups are making heavy investments in warehouse space. Industry 4.0 and eCommerce are going hand in hand, read more about Digital Transformation in Manufacturing.
Artificial intelligence and robotics are changing how things are made and will change the way people shop as well. It’s being estimated that robots will be making a significant portion of all the goods that are sold on the market.
This change is thanks to a certain trend that will come to fruition:
– New “warehousing” systems – As mentioned above, eCommerce warehouses are mostly web-based. We call these web-based warehouse systems “Web Warehouses” and “Web-Scalers”.
Web Warehouses are a centralized online warehouse system that usually provides logistics software. The customer doesn’t need to know where anything is going, or which items are being shipped.
Web warehousing companies automate logistics, and as a result, they cut out the need for physical warehouses and the employees that work there.
Many eCommerce companies have gone to great lengths to streamline the buying experience, eliminating the need to visit a store. Online purchases have long overtaken those made in stores.
As more people use these new mediums to shop for the things they need, it’s led to a revolution in the way retailers handle their inventory. Instead of waiting for the right item to come in and then having to stock and stock fast, they can deliver their inventory to customers as soon as possible, often leaving it at their doorstep instead of a store.
This makes it easier to manage inventory and ensure customers always have the right item in their hands. The efficiency of today’s business model can be traced back to the rise of eCommerce.
We are in the Information Age, which has allowed us to leverage the power of the internet and become the masters of our worlds. These new-age shopping experiences have a vast array of pros and cons and require us to juggle the complicated world of online shopping with a new brand of social life.
We hope this article about how eCommerce being the game change and shaping the future of warehouses gives you some insight into what’s driving changes in the world of online shopping, and how shoppers are adapting to these changes.
Mike Patel is a digital marketing enthusiast, innovator and President of a leading Digital and E-commerce Development Agency in Dallas, Texas. Mike holds a BS, Computer Science degree from Wayne State University and is a key player in the E-commerce development and digital marketing industry since 2004. The scope of technology in his extensive experience of more than 15 years ranges from Magento, Shopify, BigCommerce SEO (Search Engine Optimization), PPC (Pay Per Click) management, E-commerce SEO, Google Shopping Ads and more.
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