There are few bigger areas of change than the retail sector. Change, however, equals opportunity for the logistics sector and UKWA, says the Association’s CEO Peter Ward.
There is opportunity for UKWA and its members in a world that is changing rapidly. We should be aware that change derives not only from within our sector but also from political, cultural, environmental, technological and demographic trends.
Social and economic changes within the UK’s fast growing population are driving an exponential shift in consumer behaviour, which is providing challenge and opportunity within our industry.
Smaller households, longer working hours, and reducing food waste are playing to the strengths of convenience stores as shoppers look to shop little and often. In 2014 the convenience market generated £37.4bn in sales. This represents a year-on-year increase of just over 5%, and IGD (The Institute of Grocery Distribution) research shows an increase of 451 convenience stores by the multiples, a growth of 13.6% year-on-year.
The shift from traditional supermarket to convenience calls for smaller and more frequent deliveries as we move from the traditional national and regional distribution centre model towards a multiplicity of localised fulfillment centres. This principle of ‘little and often with small picks’ not only challenges many of our members but also the materials handling solution providers to move from technology and processes geared around bulk and palletised logistics.
We have already started down this path thanks to the massive influence of the huge game changer that is online retail, driven by the consumer’s insatiable appetite for greater convenience and shorter delivery lead times.
The UK leads in the overall proportion of retail sales that are conducted online at just over 12%, which is predicted to grow to 21.5% by 2018. This is bolstered by a strong grocery market, which makes up 19% of the total e-commerce sector in the country. Logistics also faces the considerable challenge involved in managing escalating numbers of non-food returns.
Wherever there is change there is also opportunity – particularly for UKWA members who are in prime position to provide the agile logistics services required.
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