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An Eye on E-Commerce & Its Impact on Industrial Buildings in 2020

Categories:
Industrial

The current global pandemic has forced consumers to remain in their homes. As a result,what was once a 21st century luxury has now become a means of survival. E-commerce—to include grocery, home goods, entertainment, pet supplies, medical supplies, clothing, and even cars—is dominating the consumer market. The online shopping module has taken the world by storm as it has shaken up contemporary industries throughout the country—and nothing has been impacted as much as CRE’s industrial sector.

Advancements in E-Commerce

Even before it became a household necessity, the e-commerce business was booming. Prior to the pandemic, it was expected that by 2022, e-retail would become a $6.54 trillion industry. But with a 248% increase at the end of May in “buy online pick up in store” purchases, that dollar volume prediction will likely only rise higher. In the midst of this expansion, CRE professionals need to take a deeper look at the industrial sector as it’s fueling this progression.

In the last three months alone, e-commerce has been intensifying the demands placed on the warehousing industry.

The industrial sector is the muscle that facilitates the constant advances which are pushing e-commerce onto a whole new level. Quicker shipping deadlines, coupled with the seemingly unlimited access to nearly every product on the web, has forced the industrial sector to reconfigure the way it does business.

These adjustments undoubtedly affect the physical space of a warehouse. The buildings themselves are taking on a new look to accommodate both e-commerce’s rising demands and CDC and WHO restrictions and guidelines, all while taking measures to keep warehouse teams and customers safe

A Surge in Demand

In order to successfully enable e-commerce to fulfill all of its shipping and delivery promises to customers all over the country, the US needs more warehouses. In the wake of the pandemic, operators expect the demand for industrial warehouse space to only increase.

Industrial Properties are Upsizing

The industrial properties themselves need to be larger to store the incredibly diverse and extensive list of e-commerce products. The industry is maximizing in square-footage to create huge warehouse properties.

In many cases, industrial developers are trying out the multi-story warehouse module that’s successful in China, Japan, and South Korea. By building upwards, industrial sites are able to expand in cases where horizontal growth isn’t a feasible option. This globally-inspired strategy is specifically helpful within big metro areas that serve a large population of online shoppers.

Expanded Parking Options

Warehouses are incredibly busy hubs for business. Industrial sites process, package, and ship out a profuse volume of e-commerce goods every day. As a result, more pick-up and delivery trucks are visiting these sites - and everyone needs a place to park.

Industrial tenants are looking for leasing options that can accommodate the massive influx of vehicles onto the property for transporting e-commerce goods. Industrial developers are designing sites with greater parking options for both team members and truck loading zones.

What’s Next?

What a “Post-Pandemic” world will look like is anybody’s guess. But one’s thing for sure: both e-commerce and the industrial space needed for it will continue to rise.

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The Society of Industrial and Office Realtors® (SIOR) represents the world’s elite in industrial and office brokerage. SIORs are held to the highest standard by completing thorough requirements and adhering to the SIOR Code of Ethics. SIOR is more than a designation, it’s a symbol of excellence. It’s a reflection of a global network of more than 3,400 industry leaders driven by camaraderie and innovation. SIORs value the power that comes with building relationships and sharing ideas that are on the leading edge of the industry. They are the most trusted resource in commercial real estate. For more information, visit sior.com

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