Focus on Distribution and Logistics Infrastructure

Shoppers are becoming more and more savvy and difficult to reach through traditional media. Consumers are paying attention to the internet, social media and on a smartphone in addition to in stores and mass media like television and radio. While growth in e-commerce is not a new trend, its impact on how retailers get the right products to the right customers at the right time for the right price is becoming more substantial. Retail environments are going from bricks-and-mortar (single channel) to online (multi-channel or omni-channel). Consumers can order online and pick up at the store, visit the store and order at a kiosk, visit the store and order through mobile phone, visit the store or online and price compare and purchase at lower-priced store, and any other combination of options.

In a recent Deloitte study, survey respondents expected the percentage of sales generated by bricks-and-mortar stores to plummet in the next five years from 91% to 63%. Traditional retailers may end up staging showrooms for consumers to feel and touch the product. Online retailers have leveraged this trend to siphon customers away from category killers such as Best Buy.

As the world becomes smaller and smaller through the speed of and access to technology, goods are moving in and out of markets more quickly and easily than ever before. Retailers are turning their focus away from a solely domestic enterprise. Turning toward a global world of cross border sales retailers are looking to sophisticated global consumers, providing access to millions of new customers every day. Twenty two percent of online shoppers made their first online purchase within the past year. AND, these consumers are expecting fast, if not immediate delivery …..and some retailers are promising this!

Our point in sharing this is the demand for “big box” real estate is turning to distribution and warehousing operations. The “just in time” philosophy has taken hold due to the recession (retailers don’t want to hold significant amounts of inventory on their shelves) and the high demand for quick turnaround on orders to consumers. State of the art big box industrial development is trending toward 36’ clear heights so multiple mezzanine levels can be utilized to stack goods.

Communities with vacant, shovel ready land on rail and near highway infrastructure will see activity and interest in large parcels increase into the second half of 2013. With steady growth in domestic intermodal volumes and continued investment from railroad companies, access to rail remains an important factor driving the market.

Maintain and enhance your community’s logistics infrastructure so it can capitalize on the coming demand for distribution expansions.

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