Urban Logistics: How Traditional Retail and Logistics Companies Can Survive and Conquer e-commerce

  • Logistics companies operations are constantly being pushed further from urban areas
  • E-commerce growth will reach $4T in 2020 with customers expecting their products delivered with increasing speed
  • Retail stores are experiencing difficulties with new shopping habits and increasing rents

This year London is releasing around 100 hectares of industrial land for other uses such as building new housing. That is a rate three times higher than the 37-hectare annual target set out in 2010 by the London Mayor’s team. It is a move that will have a direct impact on logistics and retail companies. 

The repurposing of industrial land in London and throughout Europe will push warehouses and logistics companies further away to the periphery of cities, making it difficult to meet the growing demand for e-commerce ($4 trillion worldwide by 2020). It will also drastically increase the cost of last mile delivery which already accounts for 50% of the total supply chain costs in Europe.

At the same time, consumers now expect their products delivered faster and cheaper. So, how can retail and logistics companies adapt to these changes and demands from consumers?

Amazon is leading the charge, allowing long tail e-commerce shop owners to compete with bigger brands. Traditional retailers, on the other hand, are struggling to adapt. Due to increasing rents and customers turning more and more to e-commerce, we are seeing the decline of high street shops. As a result, traditional retailers are beginning to look at their real estate and contemplate store closures.

Marks & Spencer, long a stalwart of the British High Street, announced earlier this year that one in four of its three hundred clothing stores will be shut down, relocated, or remodelled to remove excess space.

Retail stores will need to evolve if they want to survive, and logistics companies will need to find a way to be closer to the customer to satisfy their expectations.

A solution beneficial for both parties would be to decentralise warehouses in vacant retail spaces across the city and connect them using the already existing networks of distribution serving bricks and mortar high street shops.

To do this, cloud platforms for distributed inventory, IOT integration, last mile delivery solutions, and other digital tools to acquire new customers and refine delivery experience will need to be implemented.

The race is already on and only the fastest to innovate and understand the complexity of constant evolving technology will succeed.

Does your company have the tools, skills, mindset, and speed of execution necessary to cope with the e-commerce revolution?

Come to our round table to discuss how Rainmaking can help you innovate and provide you with support and tools to help your company thrive in the race for urban logistics domination.

Senior corporate leaders are invited to join us in London on June 13th for a roundtable discussion to learn from Rainmaking's experience building new innovative ventures. 

You can learn more about the event and request a ticket here. Please keep in mind that spots are limited.

By Nico Meriot

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