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Savills releases Logistics Megatrends report

Released at: 14:16, 04/04/2017

Savills releases Logistics Megatrends report

Photo: Vietnam Logistics Institute

Report notes changes to online distribution channels.

by Ngoc Lan

Evolving technology, combined with changing consumer habits, will transform the way e-tailers distribute and deliver products to European shoppers, meaning that increasing amounts of warehouse space will be required across the continent to service demand, according to Savills’ latest report.

Ecommerce News and the Centre for Retail Research reported that despite copious discussions of the impact of online on the high street and logistics, currently only 8 per cent of retail transactions take place online across Europe.

With experts forecasting this to rise to 25 per cent of total retail by 2025, greater disruption in the sector is yet to come, according to Savills in its Logistics Megatrends report.

Director of Savills commercial research team, Mr. Kevin Mofid, said that technology is set to cause further disruption to the warehousing and delivery world. “However, variations in retail business models, legacy supply chains, approaches to technology and the penetration of online retail country by country means there will be no single solution that can be applied to warehouses and distribution across Europe,” he added.

The research predicts a number of key factors that are likely to impact the European logistics sector to 2030. First, retailers and manufacturers may relocate warehouses to take advantage of cheaper locations and labor as drone technology will enable deliveries to be made from areas previously inaccessible to lorries.

Warehouses will get taller as robotics allow stock to be racked more efficiently, with automation enabling products to be retrieved from greater heights. Warehouse workers may also be supplied with robotic exoskeletons to assist them in the loading and packing of deliveries.

Second, with a reasonable price, globalized shoppers will purchase more products from retailers based abroad when delivery is not too expensive.

Cross-border e-commerce could grow by 25 per cent annually, which would have a major impact on where retailers and manufacturers place distribution hubs. There may be more warehouses closer to borders and more steps and locations in the delivery chain to manage custom and border checks.

Third, advances in battery technology and autonomous electrical vehicles will lead to a proliferation of night time deliveries as they will no longer contravene noise restrictions. Consumers may wake up to their deliveries having already arrived. 

Finally, for retailers with physical stores, improved tracking of stock will mean that deliveries can be shipped from existing shops if they’re closer to the customer, rather than from warehouses. This will cut down both costs and the time deliveries take to reach customers.

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