Is my online shopping affecting the real estate industry?
I admit, I love purchasing things online. It can be anything, a fine silk tie or a bag of dog food, it doesn’t matter as long as it’s available via app. Quite frankly, if it’s not available online, I probably don’t want it anyway.
As a father to six and with an ever increasingly busy professional schedule, I probably make three online purchases per day, and like magic my order usually arrives swiftly (2 days with Amazon Prime of course) and I’m a happy customer.
But how is this possible? What really is involved with driving this new online first model and how has it affecting the real estate industry?
At ULI’s Mid-Winter Conference earlier this year, Jim Tompkins, CEO of Tompkins International and a global supply chain expert, explained that E-commerce continues to have a profound effect on the real estate industry as a whole. A much larger impact than I had originally thought, and things like warehouse location and design are an integral part of the magic.
With the advent of Omni-channel and tailored Omni-channel models, there is a more seamless approach to the customer experience across all available shopping channels. In turn, the design requirements and locations of warehouse and retail space seem to be changing rapidly. Combined distribution, fulfillment, returns, and liquidation centers are now becoming the norm and locating centers close to consumer hubs is paramount.
Additionally, the volume of online B2B business will soon exceed B2C; and the major e-commerce players are already ahead of the curve in capturing both markets. Product differentiation and brand management are more important than ever as online shopping makes it easier than ever to compare products.
With e-commerce giants, including Amazon, securing local distribution center space at a swift clip and entertaining the option of securing retail space via acquisition; it seems a good time to revisit those long vacant grocery stores and ex-big box stores that are located in the right target markets. Just maybe, the continued rapid acceleration of e-commerce will make once neglected space desirable again in the near future, and will certainly continue to sustain my ever increasing online shopping habit.