How to Prepare for E-Commerce Sales Despite Lack of Warehouse Space

Fully stocked warehouse inventory

As more consumers shop online, retailers work to keep inventory stocked and ready to ship at a moment’s notice. But for many retailers, finding available space to stock inventory is a growing challenge. The availability of warehouse space has been shrinking for several years, and in the third quarter of 2018, it fell to 7.1 percent.  That’s the lowest it’s been since 2000, according to research published in the Wall Street Journal.

If retailers don’t have appropriate space to stock inventory, their companies can’t meet customers’ demands for quick fulfillment and shipping. As a result, their retail stores are likely to miss out on the potential for e-commerce sales.

Even though warehouse space is shrinking, there are other options for retailers who want to stay on top of the e-commerce trend. With portable storage solutions, savvy retailers can store exactly the inventory they need at any time, at their locations, without the costs and hassles of off-site storage.

Where Did All the Warehouse Space Go?

If you’re a retailer seeking to boost or maintain online sales, you understand why warehouse space is scarce: Increased online shopping means increased demand—and more sales. For instance, Best Buy increased its inventory online and in stores by 9 percent in 2017, and watched sales grow more than 7 percent, reported Retail Wire. The percentage of items purchased online has risen steadily each quarter in the past decade, according to the U.S. Department of Commerce, with a 3.1 percent increase in the third quarter of 2018.

Not only are more consumers buying online, but they also expect to receive their goods quickly. Eight percent of online shoppers say the speed of order fulfillment is more important than price, and 63 percent say that delivery within three days is their expected standard, according to the 2018 Consumer Trends Report from Kibo. A separate study from Retail Touch Points showed that 61 percent of online shoppers want faster delivery than they’re getting.

Increased online purchases with the expectation of rapid home delivery creates unique logistics demands.  Retailers must keep their goods stocked in areas that are convenient to population centers so that orders can be fulfilled quickly —and in many cases, the available warehouse space is not in close proximity to residential areas.

But growth in e-commerce isn’t the only reason for the decline in available warehouse space. Because retail and residential space command higher rents than warehouse space, owners and developers have converted some former warehouses to other uses. Available land is usually transformed into uses other than warehouse space. Since 2010, approximately 15 percent of the existing industrial properties in Silicon Valley have been repurposed for residential and office uses, according to real estate professional services firm Jones Lang LaSalle.

Easy Inventory Storage Solutions

Retailers who want to cash in on e-commerce growth must develop new solutions for having inventory at their fingertips. Portable storage units offer an ideal way to solve this problem, whether you want to stock up in advance of an online sales push, prepare for a seasonal rush, or maintain more inventory on an ongoing basis. A portable storage solution like PODS is actually preferable to renting warehouse space for several reasons.

Consider these four advantages:

  • Use what you need, when you need it. Why pay monthly rent on a storage facility or warehouse if you only need the extra inventory during your busy season or while you’re offering a special online sale? With portable storage, you can keep inventory stored for as long as you need to, and have the storage container removed when you’re not using it.
  • Save time. Rather than spending time traveling between your retail site and your storage site, PODS containers allow you to store inventory at your location so it’s always available. A container fits inside a standard parking space. If you don’t want a container on site, you can call and schedule drop offs and pick-ups as needed.
  • Keep inventory organized. When customers place orders online, they expect delivery fast. To do so, retailers must locate the items and fulfill the orders quickly. With portable storage units, you can use a different container for each type of product, so it’s easy to find your stock. You can also store shipping supplies in portable containers to free up space in your store, ensuring that boxes, bubble wrap, padded envelopes and other items are at your fingertips but not cluttering aisles or back rooms.
  • Minimize staffing needs. Retailers who rent warehouse space apart from their brick and mortar stores may need to hire additional staff to keep the warehouse stocked and organized, and to fulfill online orders as they come in. For smaller retailers, extra manpower can eat into delicate profit margins. With a PODS container on-site, you may be able to avoid hiring extra staff or paying current staff to travel back and forth between a warehouse and your main location. Instead, current staff members may be able to handle order fulfillment during slow periods or by coming in early or working late.
PODS for Business Container on site parking lot

Rather than relying on off-site warehouse storage — which may mean stalling your e-commerce growth or paying more for travel and staff — consider on-site storage solutions that are available when and where you need them. For more information about how PODS can be a valuable partner in growing your e-commerce business, learn more about our retail inventory management solutions.

Discover Moving & Storage Solutions For Your Business

Was this article helpful?