Are small warehouses the future of retail?

The head of the retail technology company Fabric, Jonathan Morav, has predicted that small warehouses are the future of retail.

Amazon pioneered the use of massive fulfilment centres but is rethinking its strategy and looking at opening smaller warehouses. Spaces such as basement parking garages, empty retail stores and former coffee shops can be converted into micro fulfilment centres.

Jonathan Morav says:

“It turns out that bigger isn’t always better. Smaller facilities can fit into spaces closer to city centres, shortening delivery times for local customers.”

 

Retail floor areas can be reduced in size so that larger inventory areas are in the back of the building. This can decrease the number of deliveries required from the retail company warehouse. Inventory can be localised by customers using apps that gather information on what they are interested in buying, enabling inventory levels to better match demand.

Small fulfilment warehouses or micro fulfilment centres (MFC) need to be highly efficient. A storage racks supplier can provide high-density storage systems for smaller warehouses that fit more products in a smaller area by building racks from wall to wall and up to the ceiling. Jonathan Morav estimates that high-density storage rack systems can increase storage space by up to four times compared to traditional warehouse storage systems. To pick inventory from all areas, automated picking robots are required to assist human workers.

E-commerce customers will continue to desire fast delivery times and good service. MFC’s could be the key to meeting their demands.

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