The world of retail is continually evolving. So too is the world of retail logistics, where I have worked for more than three decades.
In the U.K., the high street has faced pressure for some time, with many proclaiming that the pandemic would be the nail in the coffin. Indeed, in the years since, we’ve seen the demise of several retail darlings. Yet, in the post-pandemic world, there are clear signs that retailers are developing new ways of working. Rapidly.
Perhaps the most significant change to the retail dynamic is the dramatic increase in collaboration and shared resourcing — from warehousing to retail space. There are clear benefits to this approach for retailers, logistics companies and customers — especially right now. That’s why the launch of GXO Direct, one of the largest shared-space warehousing offerings in the U.K., is particularly timely.
Shared warehousing is in demand
Now more than ever, companies are seeking the unique benefits and economies of scale that a shared-space solution provides — agility to respond to changes in demand, costs that flex with growth and access to technology and services at lower cost. This, in turn, means the consumer can be served more efficiently and affordably while keeping overhead low. For warehouse logistics companies like GXO, it brings a new channel of growth, expanding the breadth of companies it serves.
This model is already taking off. Since its introduction in the U.S. in 2018, GXO Direct has grown exponentially, adding millions of square feet each year. And we see interest in and demand for shared-space warehousing increasing in the U.K.
Retail collaboration requires a highly efficient operating model
A scan of today’s retail landscape shows that many of the largest brands in the U.K. are sharing resources. For example:
- Marks & Spencer has developed its “Brands at M&S” model, whereby recognized brands with a complementary offering can sell their products in M&S stores and online.
- Sainsbury’s has rolled out a similar concept, introducing Sosandar, the popular womenswear brand, as part of the growing list of complementary brands invited to the partnership.
- Waitrose offers “Waitrose Connect” at its stores as collection points for brands, such as Sweaty Betty and Boden, whose customers see this as additive to their shopping experience and journey.
These partnerships enable smaller brands to benefit from the infrastructure and ways of working of larger players to mutual benefit. Yet collaboration and shared resourcing require highly efficient operating models. Operations must flow at pace and be able to handle the outbound activity to the store and customer as well as process returns in a timely manner to ensure resale at full margin.
Simply put, for these integrated collaborative ideas to work, companies need solutions like GXO Direct that offer retailers and brands of all sizes a true end-to-end capability — bringing unparalleled retail and ecommerce-focused facilities, rapid IT deployment, low-cost start up models and world-class returns management systems.
Looking ahead, I expect we will see the high street accelerate its natural evolution and the collaborative economy take even greater hold of the ecosystem. It’s not surprising in a world in which we share private transportation (taxi pooling), accommodation (shared living), holiday stays (Airbnb) and more. Far from dying a slow death, the high street is evolving once again leveraging offerings like GXO Direct that meet the moment.