A good litmus test for the recovery in domestic sales has always been the fashion industry.
Within this market the increase in small batch sizes and single item delivery has begun to show real growth over the past 18 months.
Typically a very tough and cost inefficient sub market to process, the marketplace now demands cost efficient (often free to end consumer) deliveries, typically on a next working day time frame.
The Batch Size Issue
Across domestic UK markets online sales of none food products have increased again to 17.4% of revenue up from 16.2% in 2014. One off sales making up almost 22% of these sales (almost 4% of all sales online and offline)
The challenge for retailers is twofold. Firstly, is their existing warehouse space set up to physically store a larger range of products in smaller batch sizes. Bay size and product handling challenges might be potential problems for them to overcome here. The issue is smaller batch sizes and many more deliveries required over ever decreasing lead time.
Alongside this, can their administrative and stock control systems deal with an increased number of transactions.
In other words can systems and workplaces designed to cope with large UOM, repeat deliveries of a smaller range of repeatable products now deal with a much larger data set which, while still including these large scale repeaters, also needs to cope with rapidly expediting a high number of one-offs?
We are seeing one of two solutions to this problem being adopted typically.
To increase the viability of small scale deliveries, the ideal of pairing up with manufacturers servicing the same outlets and sharing delivery facilities offers obvious cost savings. This might extend to collaborative warehousing and the need for integration between inventory control systems.
Third Party Delivery Services
At the smaller end of the market, the trend seems more towards relying less on developing individual delivery networks of vehicles and routes and replying on third party delivery companies who specialise in small batch, next day delivery.
Whichever options are used, the need for the stock control system and those using it to evolve and develop to handle these new processes is apparent