Last-mile delivery drives warehouse locations

Industrial properties are thriving and continue to evolve based on consumer demand. The desire for same-day delivery and the need to get products into consumers’ hands sooner helps drive innovation, from investments in last-mile distribution complexes to drones.

“There is a natural limit given physical congestion concerns—unless we build much wider and better built highways,” said Victor Calanog, Head of CRE Economics at Moody’s Analytics. “The game is about dominating both physical and online channels. That’s why Amazon bought Whole Foods. Whole Foods and competitors such as Walmart and Target have that physical distribution complex that a pure online seller simply does not.”

• Shifting warehouse locations: Last-mile delivery is a requirement for all retailers. To fulfill the delivery demand, industrial properties are looking for ways to expand, and retailers are moving fulfillment spaces to the center of the country.
• Adaptive reuse of malls: Vacant B and C class malls and big box stores can make ideal warehouse and fulfillment center locations; they’re centrally located, with lots of open space and parking. Many also have dock doors and clear heights compatible with warehouse use.

The rise of experiential retail

Many retailers exist only online and don’t have plans to create a physical presence. Other businesses that began as brick-and-mortar stores have made the shift to online-only operations in recent years.

Then there’s a third group of brands. Most of them got their start online and are now adding physical stores, usually in select locations. Their stores aim to deliver a unique, in-person experience. For example:

• Savage X Fenty “celebrates fearlessness, confidence and inclusivity.” In keeping with this theme, the lingerie brand’s brick-and-mortar stores feature soft lighting in multiple colors, mannequin replicas of the brand’s models in a range of sizes and genders and Fit Xperience technology to help customers find the best fit.
• Tecovas’ brick-and-mortar locations offer personal appointments so customers can have their measurements taken and try the brand’s cowboy boots in a variety of sizes and styles. They can either purchase directly from the store or have their boots shipped. The store also offers embossing on all leather goods, plus complimentary boot shines and beer, bourbon and other beverages.

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