INDUSTRIAL
LOGISTICS IN A SOUTH AFRICAN CONTEXT
In South Africa , where e-commerce has also boomed since the Covid-19 lockdown period , many retailers have used their existing retail locations to build operations that serve omnichannel customers better . But using current retail space as mini-DCs comes with the high cost of retail rental space and far higher operating costs than warehousing . This is often the only option because this space allows retailers to remain closer to customers demanding decreased delivery time at a lower price .
Although there is a wide spectrum of operating models that retailers can choose from to build fulfilment capability in-store , for example , repurposing the back-of-house or dedicating
space to house a packing and shipping room with lean operations , the challenge for retailers using their stores as mini DCs is that they need to keep a lot more products instore to fulfil the customer ' s need for immediate delivery . This means retailers must be able to analyse market data to improve forecasts for stock keeping units ( SKUs ) with strong omnichannel demand , be able to determine the optimal cadence for replenishing products to mitigate the need to redirect inventory at the end of a life cycle and build rules to route customer orders to optimal store nodes .
Other challenges include hiring more staff for in-store fulfilment with specific fulfilment-focused profiles or automation experience and major adjustments to the store ’ s operating hours
134 AUGUST 2022 SA Real Estate Investor Magazine