Need for Delivery Speed Driving Ecommerce Distribution Investments

The need for speed in ecommerce distribution, driven largely by Amazon Prime’s two-day promise, is behind increased investments in distribution center technology as well as a trend toward more smaller, forward-based facilities closer to the customer, according to a new study from supply chain consultants Zebra Technologies Corp.

According to the study, 48% of the 1,400 global IT and operations warehouse professionals polled said that as of 2015 they planned to increase the number of warehouses, while this figure jumps to 76% by 2020. At the same time, 61% said they plan to increase the size of their warehouse facilities by 2020, down from 65% currently.

This finding aligns with a study last month from CBRE, which found a trend toward smaller “quick response” fulfillment operations, in areas near demand centers, typically in urban areas, driven by omnichannel demand.

Some other topline findings from the survey:

  • More than 40% of respondents cited shorter delivery times as a key measure requiring warehouse investment.      
  • As of 2015, 50% of those surveyed planned to move to a more modern, full-featured warehouse management system, a figure which will jump to 75% by 2020, to help them manage the increased locations and items shipped.
  • In 2015, 51% of those surveyed expected increased investment in real-time location systems that track inventory and assets throughout the warehouse last year, a figure that grow to 76% in 2020.
  • Executives anticipate an increase in inbound items using bar codes in the next five years, from 66% in 2015 to 82% in 2020.
  • By 2020, respondents cited plans to make investments in the following processes and tools: increasing volume of items shipped (76%), equipping staff with technology (73%), bar code scanning (68%), tablets (66%) and Internet of Things (62%).