An active or on-demand warehousing strategy is an online warehouse marketplace that provides a pay-as-you-go model, meaning leasing the required warehouse space for the duration needed. This can be a company's entire warehousing strategy or can be used to complement existing long-term warehousing contracts. In either case, it allows retailers to easily adapt to ever-changing demand and cost conditions.

Retailers pay per-unit costs for the services they use, thereby avoiding operating and capital expenditures. This system is useful in e-commerce, where retailers are often subject to high demand uncertainty. It allows e-commerce retailers to lease small-capacity units in multiple locations, thus quickly reaching a large portion of their customers.

As an online warehouse marketplace that connects those in need of warehouse space with warehouse providers, Park Palet implements the active warehousing system in Turkey.

E-Commerce and Warehousing

Warehousing is an integral part of retail operations and serves to efficiently distribute goods to where demand exists. Retailers use their warehouses as distribution centers to supply their own retail stores. In this traditional retail model, final consumer demand is met from the retail stores.

With the emergence of e-commerce, the traditional warehousing model is proving insufficient. E-commerce is growing rapidly in the retail sector: online retail sales, which accounted for 7.4% of all retail spending in 2016, are projected to capture an 8.8% share in 2018. While the leading countries in e-commerce are the United Kingdom (15.6%), the US (7.5%), and China (13.8%), Turkey is still at the beginning of this transformation with 3.5%.

Moreover, according to Öget Kantarcı, General Manager of GittiGidiyor, who states that Turkey is among the countries with the greatest potential in the e-commerce sector with a 58 percent internet penetration and 65 percent smartphone penetration, the retail e-commerce volume in Turkey could easily double and reach 35 billion TL in 2019, with the significant contribution of cross-border trade. (TÜSİAD's 'The Driving Force of the Economy in a Digitalizing World: E-commerce' Report).

Differences Between Traditional Retail & E-Commerce

E-commerce is also changing the structure of the warehousing industry. Because they do not have physical stores, e-commerce retailers must carry more stock in warehouses. Consequently, along with the demand for warehouse space, the need for efficient warehousing services and distribution strategies is also increasing.

The active warehousing system is the most suitable system in such cases; it allows the retailer to adjust the warehouse space on demand, meaning they can lease as much warehouse space as they need, in the region they want, for as long as they want.