Evolving E-Commerce

Internet purchases make up only about 9 percent of all retail sales, but their impact far outstrips that deceptively modest share. The rapid growth of online shopping is creating a palpable demand for specialized delivery streams, which are expanding steadily as retailers experiment with the best ways to serve their customers. Meanwhile, Amazon is unrelentingly tightening delivery windows, further challenging retailers and their fulfillment providers to devise dependable yet cost-effective solutions to compete.Sue_New_Headshot

The complexities of e-commerce fulfillment are requiring developers to raise their games, as well. Supplying conventional bulk warehouses entails no shortage of know-how, but the sheer numbers of people and packages that must be accommodated by the new breed of specialized fulfillment centers raises the required skill set to a new level.

Increasingly, developers are even being asked to finance the costly equipment used to process orders—an issue that would not even come up in developing a traditional bulk distribution facility.

And that’s only the industrial sector. Retail real estate, too, is being transformed. Far from yielding to online sales, many retailers are reinventing their stores to provide new means for both electronic purchases and local e-fulfillment.

Since online purchases promise only to keep growing, developers and brokers alike would do well to provide more properties and innovative solutions tailored to the new realities of e-commerce. Indeed, some are already heeding the call. Later this month, NAIOP is launching E.CON, a new e-commerce-themed conference. Last fall, industrial brokerage firm Binswanger and retail advisory firm The Shopping Center Group formed the Retail Logistics Group, a joint venture that advises retailers on e-commerce site selection and logistical issues. And as CPE continues to address the e-commerce phenomenon through a variety of content, this month we present our E-Commerce Special Report, an in-depth look at the impact on both the industrial and retail real estate sectors.

Seeking Top Deals, Properties and Strategies
Don’t forget to submit your top transactions and strategies of 2013 to CPE’s fourth annual Distinguished Achievement Awards! The deadline is March 29. An independent panel of judges will offer awards in the following categories: Best Lease, Best Sale (both for Single Property and Portfolio), Best Financing, Best Development/Redevelopment, Most Effective Repositioning/Turnaround Plan, Most Effective Property Management Program and Most Innovative Corporate Strategy. Last year’s winners included Brookfield Office Properties, Jones Lang LaSalle Hotels, Vulcan Inc., CBRE Group Inc., Cassidy Turley, Hines, Wells Fargo Multi-Family Capital and Berkadia Commercial Mortgage. This year, it could be you!  

Suzann Silverman, Editorial Director