Warehouse boom: comment from Infosys Consulting

In response to news that the demise of the high street is leading to a boom in giant warehouse demand, Sachin Jangam, Partner for Retail at Infosys Consulting argues that the only way physical stores can compete with e-commerce is with a radical rethink of physical space, and highlights the opportunity dark stores hold for brick and mortar warehouses.

“The latest figures show warehouses, particularly ‘super sheds’, are proving a resourceful option for businesses trying to keep up with online demand. As retailers navigate the age of e-commerce, the only way physical stores can compete is with a radical rethink of physical space.

“In response to this demand, dark stores and malls pose a significant opportunity for retail expansion. These are traditional retail stores converted into local fulfilment centres and warehouses and would be a major step in supporting the struggling High Street. This is possible for retail businesses which are omnichannel in nature and able to take on orders against local store inventory. This is an effective solution for retailers faced with the decline of in-person shoppers by being able to serve them better online. If it’s widely adopted, the evolution of brick-and-mortar could help retailers win back their share in the sales boom for years to come.

“Whilst dark stores have begun to rise in popularity, dark malls – shared warehouses that provide the same variety of retailers as the traditional shopping centre experience – are the next development. Traditional shopping malls should be supplemented by e-commerce channels, involving mall operators, retailers and logistics suppliers in order to retain business going forward.”