Gap stores announced late last week that it is entering the fulfillment market as a 3PL, in partnership with Ware2Go, a unit of UPS focused on flexibly leasing space to shippers.

Supply Chain Digest Says... The announcement, however, left many questions unanswered. What do you say? Click here to send us your comments Click here to see reader feedback

The new partnership will focus on small and medium-sized businesses (SMBs).

In fact, the companies question whether small and medium sized businesses will want to manage their own distribution centers.

“The future of fulfillment looks like SMBs owning zero warehouses,” said Steve Denton, CEO of Ware2Go. “Our merchants want to remain focused on growing their business and product portfolios, and not worry about the ins-and-outs of their inventory placement or building up a labor workforce to support peak season. This collaboration makes it easier than ever before for SMBs to outsource their fulfillment while still accessing incredible customer support and deep transparency into their inventory placements and delivery times.”

The move by Gap is similar to moves made by rival American Eagle, which in Q1 2022 announced it was building out what amounts to third-party logistics capabilities even rivals retailers can used. (See American Eagle Chief Supply Chain Officer Says Time for Retailers to Collaborate On Logistics.)

American Eagle similarly said at the time that it is difficult for mid-size smaller retailers to compete with the giants on logistics effectiveness, necessitating something like American Eagle is doing to drive scale.

The partnership is formally between Ware2Go and the Gap’S GPS Platform Services division, combining the Gap’s world-class supply chain network, customer insights, technical, and digital capabilities with Ware2Go’s own supply chain technology relative to acquiring warehouse services.

The two companies say the collaboration allows even the smallest businesses access to enterprise-level supply chain capabilities through a flexible, asset-lite “co-warehousing” solution.

What is co-warehousing? A fancy term for offering multi-shipper storage and fulfillment services.

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Ware2Go and GPS Platform Services say that together they can provide SMBs access to world class fulfillment centers, where advanced technology, automation and robotics can deliver a scalable network that provides as fast as one-day click-to-door fulfillment.

The combined footprint includes more than 35 warehouses and distribution centers. They also say the combined solution will enable apparel and footwear companies to focus their energy on areas such as marketing and product development rather than logistics and fulfillment.

The arrangement also provides international companies seeking to launch in the US a path to easily enter the market, the companies say.

The announcement, however, left many questions unanswered, such as what the split of activities between the two companies will be, what the joint go-to-market strategy will be, how does Gap have excess current capacity to take on potentially a lot more volumes and more?

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