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New Omnichannel Real Estate Models Are 'Secret Weapon' in Retail War

Near-instant gratification from shopping online, mobile and in-store is now a standard consumer expectation - and sophisticated real estate models are evolving to rise to the occasion. The omnichannel logistics models that make a seamless consumer experience possible are now built on a foundation of six new types of facilities, according to a report by Jones Lang LaSalle (JLL).

New Omnichannel Real Estate Models Are 'Secret Weapon' in Retail War

“The distribution of goods has gone from a bulk process to an individualized delivery model, requiring the reinvention of the supporting real estate that supports moving individual packages where they need to go,” said Craig Meyer, JLL’s president of Industrial Brokerage. “We used to talk about pallet to store. Now we talk about dock to doorstep. We used to ship one massive delivery of 100 items to one location. Now those same 100 items must go to 100 different destinations—gift-wrapped, overnight, and with a personal note.”

As the industry reinvents its supply chain to this new omnichannel model, demand is soaring for the real estate that supports the new paradigm. As part of that process, e-commerce has evolved as a distinct real estate asset class, with six newly-defined primary types of facilities that retailers are relying on to win the delivery war. They are:

• Mega e-fulfillment centers - where merchandise is stocked and picked at item level.

• Parcel sortation centers (hubs) - where parcels are sorted before being forwarded to local parcel delivery centers.

• Local parcel delivery centers - for “last-mile” fulfillment, these represent a new type of facility and consumer destination.

• Local urban logistics depots - to ensure rapid order fulfillment particularly to service major cities, these destinations may be integrated or separate from retail store locations.

• Return processing centers - to process returned items, many times these are located within mega-fulfillment centers, but typically centralized, requiring specialized inventory and materials handling needs.

• Online food e-fulfillment centers - with appropriate refrigeration and cooling, typically for grocery delivery and similar functions.

“Customer convenience is driving an evolution in e-commerce logistics – from traditional warehouses to smaller distribution facilities in strategic locations that supports retailers’ omnichannel objectives by prioritizing rapid throughput rather than storage,” said Meyer. “In the next five years, we anticipate the market for e-commerce space to correlate with population trends so that consumers can receive their purchases not only when – but where – they want. And we expect that retailers will make returning purchases just as easy: the omnichannel strategy will drive a brand new class of distribution real estate such as return processing centers.”

Source: Jones Lang LaSalle

Keywords: warehouse management, WMS, transportation management, TMS, supply chain management, logistics & supply chain, retail supply chain

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