In this paper, we first examine the stochastic behavior associated with storage/retrieval process under COL policy, and give analytical results such as the limiting distributions of the number of items in the system and the expected travel distance. We also investigate the phenomenon of natural zoning, that is, the tendency of similar items to group themselves together, when two types of items with different turnover rates are stored and retrieved. Natural zoning refers to this grouping occurring under the seemingly unbiased policy COL. We show that zoning can occur naturally with batch arrivals to the storage system.