The future of eCommerce warehouse software: Jonathan Bellwood’s predictions part 3/3

Jonathan Bellwood's predictions for the future of eCommerce warehouse software
Jonathan Bellwood's predictions for the future of eCommerce warehouse software

Predicting future eCommerce trends is no easy feat. Software for managing the warehouse is advancing faster than we can keep up with and the way businesses operate changes about as often as the sun rises. Our founder, Jonathan Bellwood, has specialised in warehouse operations and by keeping his ear to the ground he has compiled a couple of predictions for the future of eCommerce warehouse software.

[Related: The future of data interpretation and segmentation: Jonathan Bellwood's predictions part 1/3]

1) Warehouse Control Systems (WCS) eating into Warehouse Management Systems (WMS)

A Warehouse Control System provides full automation within the warehouse, using robotics to carry out all functions; a considerable step up from a Warehouse Mangement System which uses a barcode system but still relies on humans to operate. Currently, only large eCommerce companies, making about €500 million in revenue per year, are implementing them because a WCS is a significant investment.

‘Throughout the year sales generally tend to run at an even pace,’ Jonathan says, ‘until the peak dates when, hopefully, orders rocket. While a fully-automated warehouse system at peak is ideal, eliminating any margin for human error during the most critical period, they don’t offer much of a return on investment during the slower times when you add in the cost of maintenance.’

That said, Jonathan predicts that we will see a lot more of these larger companies phasing out their current warehouse management software in favour of using a WCS instead.

[Related: 3 reasons to automate your warehouse]

2) Enterprise Resource Planning (ERP) is creeping in

eCommerce warehouse software
eCommerce warehouse software

Five years ago we said that ERPs were dead. Why would Pure-play eCommerce companies need an ERP such as Microsoft Dynamics Nav? However, a new generation of ERPs have evolved in the form of companies like Netsuite who are offering a Pay As You Go, Software as a Service based system with low upfront costs that acts as the management core for purchase orders, accounts and Customer Relationship Management (CRM).

Currently, Netsuite’s reach in Pure-play eCommerce is low but their software is becoming more and more suitable for them.

‘Up until now,’ says Jonathan, ‘the website passes orders through to the eCommerce warehouse management system which communicates with the carriers. What we are beginning to see with retailers and brands is orders coming from the website or marketplace or stores and being passed to the central ERP first, and then on to the WMS and carriers. This is a major change that we will start to witness more and more of over the next three to four years.’

[Related: The future of eCommerce warehousing: Jonathan Bellwood's predictions part 2/3]

3) Cloud WMS being implemented by bigger companies

SaaS has evolved for non-mission critical applications and year by year it starts to penetrate into mission-critical. Distributors of medical devices that save people’s lives will likely stay with on-premise solutions as they cannot afford to lose connection at any time. Medical diagnosis, however, can happen in a SaaS environment as it is not mission-critical at the time.

‘In a warehouse,’ Jonathan says, ‘being able to operate online and offline with the arrival of 4G, we’re seeing devices capable of operating at a faster speed than current web-based connections. With 4G growing in popularity and becoming a fail-safe for the internet, big companies are starting to question whether they should purchase a server or simply implement reliable 4G-ready devices which can be turned on and used immediately.’

[Related: Should eCommerce be bracing for 5G?]

Got any thoughts on Jonathan's predictions?