JONES LANG LASALLE
How are new shopping trends impacting your DC network?
Is your DC network omni-channel ready?
JONES LANG LASALLE
65% of U.S. shoppers research products on a PC before making a
purchase in store
JONES LANG LASALLE
Shopping habits are changing
40% of shoppers consult 3 or more channels before
purchase
89% of consumers think it’s important for retailers to make cross-channel shopping easy in store
Yet…7 of 10 retailers are still analyzing and
defining their omni-channel strategy for 2015 to 2017
implementation
JONES LANG LASALLE
Retailers are defining their omni-channel strategy… and omni-channel strategy is redefining retail real estate
E-Commerce sales are growing faster than sales at brick-and-mortar stores
JONES LANG LASALLE
*includes retailers with $25+ billion in 2012 total U.S. sales that have physical and e-tailing presences
Sources: NRF Stores & Internet Retailer
E-commerce sales growth vs. comparable-store sales growth among major brick & mortar retailers*
JONES LANG LASALLE Source: Accenture
Customers are in the driving seat – they choose how they want to shop
BUY IN-STORE SHIP TO HOME
BUY ONLINE PICK UP IN-STORE
BUY IN-STORE CARRY HOME
BUY ONLINE HOME DELIVERY
50 -
40 -
30 -
20 -
10 -
% of respondents who are doing more of the following activities than a year ago
JONES LANG LASALLE
What does an “Omni-channel” DC network look like? ?
JONES LANG LASALLE
The omni-channel ready DC: Yesterday vs. Tomorrow
@
3PL
Traditional e-commerce model “Best of Class” omni-channel model
DCs close to air hubs for next day or 2-day service
Low cost workforce
DCs 500k – 900k SF
5-10 year real estate lease
Same day delivery capability
DCs close to ground sortation hubs
Business and economic incentives
Build-to-suit DC 1M+ SF
Own or 15-year+ ‘credit’ lease
JONES LANG LASALLE
Local delivery depot
Ground sort hub
Local collection depot
Retailer NDC/RDC
Customer
Shop
@ Retailer
e-fulfillment center
3PL
Supplier goods warehouse
Dock to Doorstep OR Ship to Store? The new DC approach
JONES LANG LASALLE Source: Jones Lang LaSalle
What does your DC need? Building a better mousetrap for today’s omni-channel users
JONES LANG LASALLE
Baltimore
New Jersey
Philadelphia
St. Louis
NorCal
Phoenix
Dallas/Fort Worth
Memphis
Columbus Chicago
Indianapolis
Tampa
Seattle/Puget Sound
Cincinnati
Salt Lake City
Sacramento
San Joaquin
Inland Empire
U.S. e-commerce demand concentration
Houston
Atlanta
Los Angeles
Minneapolis
Transactions 2013 -
200K sf+
Charlotte
Richmond
Boston
2.1 to 3M sf
200 to 999K sf
1 to 2.0M sf
3.1M sf+
‘Clicks’ are translating to ‘bricks’
Demand
February 2014
JONES LANG LASALLE
This year, omni-channel retailers will turn to Urban Logistics models to win the delivery war, facilitated by six newly-defined facilities …
What’s next?
Urban Logistics
JONES LANG LASALLE
E-commerce facility Main building attributes Main location attributions Mega e-fulfillment centers - Very large (50K sf to 1M sf+)
- High bay (15m) to accommodate mezzanine floors - Often cross-dock configuration - High level of employee parking to accommodate full-time
and seasonal staff
- Close to parcel hub - Close to labor supply - Does not need a traditional
“center of gravity” location
Parcel hub/sortation center - High length to width ratio - Low site density - Cross-dock configuration with extensive loading for lorries - 360-degree circulation around the building - Highly automated internal operation involving sortation systems
- Center of gravity location to feed local parcel delivery centers in “hub and spoke” network
Parcel delivery centers and urban logistics depot - High length to width ratio - Low site density - Cross-dock configuration with extensive loading for lorries - 360-degree circulation around the building
- Edge of major cities and urban areas for home delivery to collection points
Return processing centers - Typically bespoke, depending on operation - Located to return items to e-fulfillment centers
Dot.com warehouse for online food fulfillment - Specification reflects type of operation – e.g. degree of automation
- Bespoke loading provision for vans - Extensive yard area for trailer and van parking and ample
parking for high number of staff
- Edge of major cities and urban areas where online food order volumes are highest
JONES LANG LASALLE
Is your Omni-channel Strategy Real Estate Ready?
Real Estate’s role in retail success