With increasing volumes of online purchases, and the ability to source products from across the globe, e-commerce businesses are having trouble finding enough room.

These businesses must either rent or buy more warehouse space or add on to an existing location. More importantly, to reduce costs, the warehouses need to be located closer to the end customer. 

In this e-commerce age, distributors and retailers are running out of space in their current warehouse environment. Worldwide retail e-commerce orders have consistently risen, with sales of $2.3tr in 2017, and predicted to rise to $4.88tr by 2021. With the growth in orders, comes the need for more warehouse space to store more items. 

But, the cost of the land, building and machinery, plus the staff to operate the warehouse can amount to a significant amount of money. Therefore, more companies chose to boost their existing warehouse without adding any real estate by streamlining the picking operations, increasing inventory turns, and implementing equipment that maximizes space utilization. 

Other businesses are creating warehouse space from existing brick-and-mortar retail stores because these locations are closer to consumers. Being closer to end users helps to get the products into the hands of customers faster, and for less cost because transport costs are less. These new warehouses are outfitted with many of the same systems found in dedicated warehouses spaces — order picking solutions, conveyors, storage shelving and more. 

Dynamic storage solutions and carton flow systems can consolidate space requirements while organizing products. Carton Flow Systems free up valuable space in the warehouse by condensing inventory, allowing warehouses to increase the number of SKUs per location. Using systems that fit between beams or columns can fill unused space with inventory, helping to maximize the usage of space as much as possible. 

To streamline the picking process, warehouses should keep the pick face full in an inventory storage location, which means that order pickers don’t have to push inventory forward to be able to reach it for picking or climb onto a shelf to get a box or carton, which can slow picking and possibly put the picker in danger. Using shelves that have rollers so products flow forward, speeds the picking process and helps keep the pick face full, especially if the shelves are tilted forward. 

Now, with the rise of the volume of e-commerce orders comes the Amazon effect where purchasers want their orders the same day or next day. Warehouses can’t be built overnight so retailers are converting former brick-and-mortar establishments into warehouses and distribution centers located closer to consumers. This cuts down on transportation costs and uses space that would otherwise sit empty. These locations can be retrofitted with dynamic shelving, conveyors, picking systems, etc.to augment fulfillment operations. 

The Outlook

E-commerce growth will continue to put a squeeze on warehouse real estate, so store-based fulfillment is the wave of the future. More distribution centers/warehouses will be created out of retrofitted brick-and-mortar space and located closer to consumers. These fulfillment environments will use modular, dynamic, high-density picking and processing systems to ensure maximum flexibility and visibility.

Brian Neuwirth is president of UNEX Manufacturing.