A retail revolution caused by the growth of internet shopping is transforming the way goods are distributed to customers, says Jones Lang LaSalle.
A retail revolution caused by the growth of internet shopping is transforming the way goods are distributed to customers, says Jones Lang LaSalle.
With online sales predicted to almost double in the first half of this decade, e-tailing is creating new demands for warehouse space, including mega sites of over 100,000 m2, specialist distribution centres and smaller, local delivery depots.
In total, JLL estimates that European retailers will need up to 25 million m2 of additional logistics space over the next five years. This equates to five million m2 of logistics space each year - enough to more than cover the whole of New York’s Central Park - for each of the next five years.
JLL predicts around three million m2 of specialised space will be needed for dedicated e-fulfilment centres, dealing solely with online demand. Another 22 million m2 is needed for store replenishment, though retailers are increasingly moving to a fully integrated 'omni-channel' customer offer, whereby customers buy in-store, online or via mobiles and either have their purchases delivered to their home or pick up from stores or dedicated delivery centres.
'While traditional retailing is still driving demand for retail infrastructure, the growth of online is fundamentally changing the size and shape of distribution centres and where they are located,' said Paul Betts, head of EMEA Logistics & Industrial at JLL.
He added: 'Many retailers have outgrown their existing supply chain infrastructure and are having to work out the best logistics model to service the growth of multi-channel retailing. Their strategy will depend on the type of products, the volume of internet sales handled and the speed at which these are growing.'
