E-commerce is a trend that won't be slowing down or going away. The convenience of online shopping is second to none, and online retails sales are only expected to increase. According to a study by Jupiter Research, by 2020, 13 percent of all global retail will take place online, totaling $3.8 trillion out of the close to $30 trillion spent around the globe.
But as beneficial as online shopping is, for customers and companies alike, it also poses a number of challenges to retailers. Consumers today expect their orders to be delivered to their door as quickly as possible, a service that not everyone is fully capable of providing. So, as more and more companies begin to offer same- or next-day deliveries, those that haven't yet will need a strategy for keeping up with these and other industry changes.
Amid this rapidly evolving e-commerce landscape, companies are seeking out distribution centers that are close to their core markets, often in urban locations. Certain highly populated areas have numerous warehouses available, according to research conducted by CBRE:
However, these are often the oldest buildings on the market. Consider the average age of industrial buildings in the same regions:
Aging infrastructure comes with obvious challenges, such as the need to maintain building walls and roofs. But beyond these common issues, today's retailers seek out warehouses that are constructed differently than companies of decades past. The modern distribution center should have higher ceilings, updated dock equipment and many more loading docks overall to facilitate quick inventory turnover.
Warehouses that were built in the past decade typically are much better suited to today's retailer. But these only make up about 4 percent of the nation's buildings, according to Material Handling and Logistics. Moreover, for markets in already heavily developed regions like Los Angeles, finding the space to construct an adequate distribution center from scratch is nearly impossible.
For many companies, these challenges must be met with creative solutions, such as designing multistory warehouses. In other cases, companies can come into an existing warehouse that doesn't quite meet their needs and retrofit it with updated equipment. Updating dock equipment can go a long way toward adapting a building to today's trucks. Raising the ceiling on a building that has low clear heights isn't always easy, but it's entirely possible.
Regularly maintaining a facility and its equipment is important to ensuring everything continues to be functional and valuable. NMS can help by providing an embedded, on-site Tier 1 technician who's in charge of your maintenance activities. This expert can review your assets and determine when, why and how to repair or replace your equipment. Contact the experts at NMS today for more information.