The New Demand for Physical Warehouse Space

One of the major economic shifts caused by the rapid growth in online shopping is the new demand for physical warehouse space. As more and more consumers shop online as opposed to in brick and mortar stores, retailers are learning that they need to allocate more resources to storing their goods as opposed to displaying them at physical store locations.

This new demand has only increased since the start of the COVID-19 pandemic. As lockdowns and fears of the virus have pushed even more consumers than usual to shop online, many businesses are struggling to obtain the warehouse storage required to meet their needs. A flexible workforce could be a key component that allows the warehousing industry to accommodate this rapid growth.

Storage Needs before and during COVID-19

E-commerce accounts for a large portion of industrial leasing in the United States. In recent years, up to 35 percent of all warehouse space was dedicated to e-commerce businesses. According to CNBC, at least half of all industrial leases have been tied to e-commerce during the Coronavirus pandemic. Some industry experts project that billions of square feet of storage space will be required in the coming years.

Brick and mortar stores, particularly shopping malls, are facing the risk of widespread closures in coming years. Some property owners are working to address the loss of retail renter income by meeting e-commerce storage needs. In multiple locations, former outlet stores and shopping malls are being used as logistical hubs and warehouse storage spaces for the same brands that used to have a retail presence in the building. While this option sounds appealing on paper, there are a number of logistical challenges, such as local regulations, lease terms, and zoning laws.

Addressing Seasonal Storage Needs

As with many industries, retail is seasonal. The months leading up to Christmas represent the busiest time of the year. For that reason, many e-commerce companies have a large but short-term need for additional warehousing and fulfillment options.

For a warehouse operator, it can be difficult to meet these seasonal needs under the best conditions. The additional business requires expanded staffing that will no longer be necessary after the holidays come to an end. This leaves employers in a tough spot: either they expand their staff now, knowing they will need to reduce it again shortly, or face the high volume of the holiday season understaffed.

Flex labor could be a viable solution. When warehouse employers rely on experienced gig workers to fill gaps during the high-volume holiday season, they can reduce additional staffing costs that come with hiring and training new employees. When the holiday rush slows down, a warehousing manager can simply reduce the number of gig workers they bring on.

Use Flex Labor in Response to the New Demand for Physical Warehouse Space

If you are unsure about how to address your workforce needs during this unusual time, HapiGig is here to help. Our platform connects warehousing companies with the skilled flex workers they need to meet holiday demands. We carefully screen every worker to ensure they have the skills and background necessary to suit your company well. If you would like to know more, schedule a consultation with HapiGig right away.