One of the key drivers behind the surge in smaller orders is consumers taking advantage of free shipping thresholds offered by local retailers, such as Landmark Group, Apparel Group, and Alshaya to compete with offshore e-commerce providers. Previously, consumers in the Middle East had to purchase additional items they didn't necessarily need to avoid shipping fees. But as offshore e-commerce providers such as Amazon, Shein, and Temu began to offer free shipping at lower thresholds, local retailers had to adjust their minimum order values for free delivery to compete. As a result, customers have tended to place smaller, more frequent orders. This has allowed local retailers to differentiate themselves with faster delivery compared to offshore e-commerce providers, who often have longer delivery times.

This rise of “quick commerce” has found its way into other retail sectors like grocery. Companies like Noon Minutes in cities like Dubai are reshaping how often people shop online by offering grocery deliveries in as little as 20 minutes. This allows consumers to order smaller quantities as needed, rather than doing a big weekly shop. Noon Minutes' model relies on smaller stores or dark stores that stock a limited range of approximately 4,000 fast-moving items for much quicker picking and delivery. By reducing the assortment and focusing on efficiency, these stores can fulfil orders and deliver them in under 20 minutes for near-instant delivery.

This shift toward smaller, frequent orders creates significant challenges for local supply chains. First and foremost, it increases the need for operational agility. Retailers must be able to process and deliver smaller orders at a much faster pace, often within hours of the order being placed (or much less in the case of groceries). The more frequent these orders, the more pressure there is on logistics to keep inventory moving quickly and efficiently.

Frequent smaller orders also mean more pressure on inventory management. Retailers need to ensure that their warehouses or small/dark stores are consistently stocked with enough fast-moving items, which requires more frequent replenishment from central distribution centres (CDCs). The traditional supply chain model – bulk deliveries and larger order sizes – must now adapt to handle the complexity of unit picking and just-in-time restocking.

This trend also puts a strain on retailer bottom lines. While consumers enjoy free shipping and fast service, the cost of fulfilling these frequent small orders is high. Without the right automation and optimisation, this could cut into profit margins, especially as local retailers already face fierce pricing competition from global e-commerce giants like Amazon, Shein, and Temu.

These international retailers offer competitive prices in the Middle East by minimising order fulfilment costs by investing in robotics and automation as well as by leveraging lower shipping costs and avoiding significant import duties on smaller shipments. However, as local governments consider tightening import regulations and imposing stricter duties on cross-border e-commerce, this pricing advantage could diminish. If such policies take effect, local retailers who are closer in proximity to their consumers will have an opportunity to capture more market share by providing faster, more efficient service.

To meet the growing demand for smaller, frequent orders, retailers in the Middle East are rethinking their supply chain strategies. Automation is playing a critical role in helping local supply chains to adapt. Dematic, a global and Middle East leader in logistics automation, provides advanced solutions that help streamline retail store and online fulfilment operations:  

• Multishuttle goods-to-person (GTP) solution:
  This solution integrates advanced picking workstations with the Dematic Multishuttle®. The Dematic Multishuttle stores and retrieves products for seamless delivery to pickers at workstations for both store and online order fulfilment. With exceptional throughput capabilities, this solution offers the highest pick rates among all GTP systems, exceeding 600 order lines per picker. Retailers in the Middle East, like Landmark Group, are turning to automation solutions like this to enhance their fulfilment efficiency. In Landmark’s premier distribution centre, one of these solutions handles 288,000 active storage locations and achieves up to 7,200 picks per hour, significantly streamlining both online and in-store fulfilment operations.

• AutoStore™ GTP solution:
  This is an ultra-high-density automated storage GTP solution that uses robots to retrieve inventory from a compact cubic storage grid and deliver it to picking workstations. This solution is ideal for optimising space and increasing accuracy, especially in operations with limited floor footprint. Retailers such as Benetton and Aster Pharmacy have embraced AutoStore technology to optimise their logistics hubs. In a Benetton facility in Italy, the solution has reduced storage space by 85% while dramatically improving picking accuracy. Aster Pharmacy similarly relies on AutoStore’s precise fulfilment capabilities, allowing them to efficiently manage the surge in smaller, frequent orders while maintaining space efficiency.
  
  
• Autonomous Mobile Robot (AMR) Bin-to-Picker GTP solution:
  This solution uses AMRs to retrieve bins with inventory and deliver them to picking workstations. This solution offers flexibility, scalability, and accuracy. Each picker can pick up to 400 order lines per hour, making it ideal for handling fluctuating order volumes. A Radial logistics centre in the Netherlands is a great example of this Dematic AMR solution, processing up to 12 million orders annually. The scalability and flexibility of AMRs enable retailers to manage fluctuating demand – including the recent rise in smaller, frequent orders – without compromising operational efficiency.

• Crossbelt sorter solution:
  This solution features a high-speed, high-accuracy sorting system that provides precise item sorting to specific destinations, making them ideal for managing the complexity and volume of smaller, frequent orders. Global fashion retailer Zara depends on crossbelt sorters in its distribution centres, which can handle over 100,000 items per hour. This solution allows Zara to meet the growing demand for fast fulfilment of smaller orders while ensuring both speed and accuracy, essential for maintaining competitiveness in the fast-paced apparel market.

Additionally, Dematic automation solutions can help retailers scale their operations without significantly increasing labour costs. This is crucial for maintaining profitability in a market where frequent small orders can otherwise increase operational expenses. Minimising labour also reduces congestion in order fulfilment operations, which can negatively affect inventory management, operational efficiency, and picking accuracy.

By embracing automation, local retailers can not only streamline their supply chains to meet the demand for smaller, frequent orders but also compete more effectively with global e-commerce players.

As local retailers in the Middle East increasingly handle smaller, more frequent orders, their supply chains must adapt quickly. The combination of strategic small and dark store placements and advanced automation technologies from companies like Dematic are helping them meet this demand while maintaining efficiency and profitability. In an evolving market where price, speed, and service are key differentiators, the ability to process smaller orders rapidly and accurately at the lowest cost is crucial for future success.