Wednesday, December 11, 2019

Warehouse availability has been shrinking across the U.S. for 35 straight quarters, driving up prices and further complicating quality sourcing. Last year’s frontloading coincided with the e-commerce boom, generating a “largely unprecedented demand for warehousing space,” and seller inventory continues to grow at the fastest pace in six years.

Making efficient, on-time last mile delivery even more complicated this year is the tight window between holidays. Because Thanksgiving fell at the very end of the month, delivery companies only have 23 days until Hanukkah and 26 days until Christmas to deliver the over 2 billion packages ordered online. The last year these holidays were so close together was 2013, when U.S. consumers were spending half as much on e-commerce as they do today.

Amazon is responding to these challenges by introducing Amazon Storage and Replenishment, an inventory service that allows sellers to store inventory at additional warehouses near Amazon’s delivery operations. Sellers’ inventory can be quickly and easily replenished as needed, avoiding a potential loss of sales from understocking but preventing Amazon facilities from overcrowding. The inventory solution is being initially introduced in Ontario, Canada, but the online retailer has plans to expand it nationwide. Follow STORD on LinkedIn and on our blog to stay up to date on Amazon’s inventory solution and other warehousing and last mile trends.