Four Retail Distribution Trends to Watch in 2015

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Retailers, consumer goods and e-commerce companies are driving nearly 40 percent of all industrial real estate demand. A new JLL report on global e-commerce points to four major 2015 retail distribution trends:

E-Commerce1)      Hello, Online Grocery Shopping. Grocery shopping as we know it is changing. Boston Consulting Group (BCG) expects the global online grocery market to increase from $36 billion in 2013 to $100 billion by 2018. This expansion from an industry with highly perishable goods requiring quick delivery and near-proximity will add urgency to the already overly-saturated demand for logistics facilities near major U.S. population centers.

2)      Customers demand full channel integration.  Delivering a seamless customer brand experience means using all channels—stores, websites and mobile platforms that must work together. And so should their real estate.Outdated distribution centers that don’t support an integrated, omni-channel strategy will require updating or even eliminating. Likewise, stores must support e-commerce transactions without cross-channel glitches.

3)      Sophisticated logistics strategies reshape real estate. Creative logistics strategies are pushing retailers in new directions. Amazon’s ‘anticipatory shipping’ threatens to take consumer expectations about convenience to the next level. Another potential  new development is the introduction of the ‘click and collect’ concept, where retailers partner with third-party logistics (3PLs) companies to allow customers to pick up online orders from convenient locations such as train stations, convenience stores or airports. As these strategies play out, both retail properties and distribution networks will change.

4)      Flexibility = profitability. Location has long been a prime success factor for retailers, but it takes on a much broader scope in the new retail landscape where the location of store fronts, fulfillment centers and warehouse distribution centers all take on equal importance. To keep up with rapid changes to the market, retailers must plan their distribution networks and buildings with flexibility in mind. For instance, more retailers are using stores to help fulfill online orders, which may require adjustments to store layouts, dedicating more space to the backroom.

Download a copy of JLL’s Global Omni-channel Revolution report here.

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