Digital Warehousing Improves Retailer Logistics by 40 Percent

Mexican retail companies have improved their logistics processes by up to 40 percent through the digitalization of their distribution centers and warehousing, according to data from the infrastructure solutions provider Panduit.

The pandemic shifted client expectations regarding online shopping delivery times and in turn, retailer’s capabilities to meet these demands. Even though customers are now beginning to return to in-person shops as COVID-19 inches closer to becoming a controlled endemic, retailers are looking to maintain some of the advantages found during the peak-pandemic’s increase in online shopping.

Among these are the benefits of increasing digital solutions that turn in-person shops into warehousing centers, which can be used for online shopping through the incorporation of technology into the business’ infrastructure. To remain competitive in today’s market, it is vital for retailers to incorporate technological solutions into their infrastructure, as many market players have found and betted on during the past two years.

“To meet consumer needs for delivery times during confinement, physical stores were used as warehouses to develop “pick up” and “same day delivery” services. Now, with consumers returning to physical spaces, the trend is to develop smart in-store warehouses to continue to provide these services,” said Erick Carmona, Technical Systems Engineer, Panduit. “Today's consumer requirements imply a deployment of technologies and devices that demand robust infrastructure to ensure proper communication between all sales channels and enhance the shopping experience."

According to Panduit, requests for technological solutions to build smart warehouses rose by 70 percent over the past two years. Logtech solutions have boomed in popularity since the pandemic started, as limited contact expedited the process of connecting to customers digitally.

“Prior to 2020, online shopping was an additional service that received little attention. As demand for these services increased, third party digital shopping platforms were used. With the pandemic, the services of these platforms saw a spike in costs, making them no longer a viable option,” said Marco Damián, Manager of Mexican Accounts, Panduit.

Panduit expects retailers to continue developing Edge Data Centers throughout 2022 to continue maximizing information processing trends on-site, as well as incorporating IoT devices and AI solutions to optimize delivery times and achieve an efficient administration of products.

A more robust physical infrastructure is necessary for retailers to have a connection network for online shopping services. Keeping with this, Panduit found infrastructure investment by retail companies with online commerce options to have risen by 35 percent in 2021. In distribution centers, a 30 percent year-to-year increase was observed.

Throughout 2022, Panduit expects a 70 percent increase in requests of smart warehousing solutions, with the most requested being those that increase connectivity in the warehouse floor to better monitor different processes in the distribution center. These are joined by robust data centers. Challenges the sector will face include low budgets, low degrees of technological adaptation and a lack of knowledge regarding these technologies.