SECTOR REPORTS SOFTWARE & TECHNOLOGY
BY JOHN R. YUVA
RETAIL AND LABOR TRENDS PAVING NEW PATH FOR WAREHOUSES Q&A with Fortna reveals how warehouse operators can adapt to evolving marketplace.
Stores are experiencing much more individual fulfillment.
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arehouse and distriPersonal shopping. Traditional bution center (DC) grocery distributors and wareoperators have much to house operators are accustomed contend with in the marketplace. to shipping pallets and full cases The role of the wareof product to the store house and DC is quickly where it’s put on the shelf changing as consumer for customers to purchase. preferences and channel That’s now changing. Stores expectations are evolvare experiencing much more ing. This means that individual fulfillment—pertoday’s warehouse and sonal shopping for grocery S WA RT Z DC operators need to where online orders are find ways to reduce order ready for pickup at the lead time, become more efficient store. Online and in-store pickup and control costs. changes the dynamic inside the To gain additional perspective on stores, and that reverberates back what warehouse and DC operators to the DC and grocery wholesaler, can do in light of these changes, Food requiring more prepacked and kitLogistics spoke with George Swartz, ted foods ready to go. It’s the Blue vice president at Fortna, where he Apron model, but in a grocery store leads the wholesale industrial distrisetting. Amazon’s own Amazon bution sector. Fresh and its purchase of Whole Foods is placing greater pressure The Amazon Effect’s on traditional grocers to adopt the Widening Impacts same model. What changes are we And these trends are impacting likely to see from grocery delivery models as well. Whethwarehouse and DC operators er it’s Amazon, Whole Foods or as a result of the Amazon now Target (with the acquisition purchase of Whole Foods? of Shipt), more customers want
Q:
FOOD LOGISTICS | JANUARY/FEBRUARY 2018
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product delivered to their door. It will be really interesting to see how it all plays out. Daily delivery. Because of changing demographics and how people are ordering, grocery wholesalers are seeing requests for smaller, more frequent orders. Grocers don’t want one big truckload rolling in once a week and produce arriving every other day. To be nimbler and keep their inventories stable, grocers are now looking for daily, smaller deliveries, with a higher focus on fresh. Liquor industry could be disrupted. With the purchase of Whole Foods, Amazon acquired more than 300 liquor licenses across 41 states. That now gives Amazon the ability to establish a distribution model and compete effectively with industry powerhouses like Southern Glazer’s Wine & Spirits and others that have owned that marketplace. I think this will drive more innovation from other players. Competition rallies. With Target’s acquisition of Shipt, it’s clear that Amazon is not the only company driving new distribution models and strategies. Many companies are looking to compete with Amazon. Shipt is in 70 cities, so Target can begin its own home delivery grocery service for customers. Target can also now scale-up its e-commerce operations to better compete with Amazon Fresh and Amazon Prime. Private labels expand. With about 40 private brands, Amazon will bring more private labeling into the food marketplace with the Whole Foods purchase. This is going to put additional pressure on food retailers because prices are www.foodlogistics.com
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