The Future of Retail: Online Shopping and Pop-up Warehouse

A Story by Sara Griffin | Updated 02/12/2019 12:00pm


Let’s face it – Amazon and other online retailers have changed the way consumers shop forever. Household necessities like groceries and toilet paper and big-ticket items like couches and mattresses can be selected, added to a non-existent “cart”, and shipped to your door within at least one business day. The internet has offered a one-click solution to consumer wants and needs.

But at what cost? Consumer expectations have been altered in terms of how and when they will receive their items. Consumers expect immediacy which, in turn, impacts purchasing decisions. In fact, a 2018 consumer insights survey reported that 62% of consumers expect their purchases to be delivered within two days of ordering while 65% value perks like free return shipping and 50% value same-day delivery. Additionally, 23% of consumers are willing to pay for same-day delivery.

Therefore, businesses who offer fast shipping are more likely to gain and retain customers. The problem is that offering expedited shipping is not always easy for most retailers. To combat this, some retails are exploring new warehousing solutions by creating temporary pop-up warehouses – similar to retail pop-up stores.

Retailers found that they can reduce transportation costs by moving merchandise closer to their customers and utilizing warehouse space on an as-needed basis.

Pop-up warehouses help retailers cater to their customer base while cutting shipping costs. The retailer will stock items for peak season in peak areas ahead of time and use these warehouses as a temporary solution in a temporary location. All of this works so well because the cost to rent and stock a small warehouse is exponentially less than the cost of shipping from one or two large centrally located facilities. For some, pop-up warehouses can even combine storage with on-site retail and pick-up, thus eliminating the cost of shipping completely.

You may find these pop-up warehouses in un-leased spaces within malls or shopping centers, or spaces that cater to short-term lease agreements for businesses such as Halloween stores. These spaces are typically centrally located, near existing infrastructure and have plenty of foot traffic.

Business like Warby Parker, mattress company Caspar and furniture seller Wayfair have adopted this model to offer buyers the convenience of online shopping and the touch-and-feel experience of traditional brick-and-mortar retail. Launching a pop-up costs an average of 80% less than opening a new brick-and-mortar store.

The retail industry as a whole is moving toward a more flexible model for sales and shipping. Innovative solutions for streamlined delivery have become a necessity in our on-demand economy. There are several challenges businesses may face with the pop-up model such as finding a property owner that accepts a short-term lease agreement, determining a good location to set up their pop-up, and hiring temporary staff to organize, ship and sometimes sell products.

Whether incorporating retail sales into pop-up warehousing locations or simply creating temporary storage spaces closer to customers during periods of high sales volume, pop-up warehouses offer retailers flexibility and allow them to trim delivery and overhead costs at the same time.

If you’re looking to buy or lease a warehouse or any other commercial businesses (retail, etc.), I’m here to help you with all of your commercial needs. Don’t hesitate to contact me, Sara Griffin with the Associates Realty Group, at 951-220-4491 or by emailing me directly atsarapassion4sales@gmail.com.

Original post by George Healy

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