How are new shopping
trends impacting your
DC network?
Is your DC network omni-channel ready?

JONES LANG LASALLE
Shopping habits are changing

65% of U.S. shoppers
research products on
a PC before making a
purchase in store

89% of con...
Retailers are defining their
omni-channel strategy…
and omni-channel strategy
is redefining retail real estate
E-Commerce ...
E-commerce sales growth vs. comparable-store sales
growth among major brick & mortar retailers*

*includes retailers with ...
Customers are in the driving seat – they choose
how they want to shop
50 -

40 -

30 -

20 -

10 -

BUY IN-STORE
SHIP TO H...
What does an
“Omni-channel” DC
network look like?

JONES LANG LASALLE

?
The omni-channel ready DC: Yesterday vs. Tomorrow

Traditional e-commerce model

“Best of Class” omni-channel model

3PL
@...
Dock to Doorstep OR Ship to Store? The new DC approach

Retailer
NDC/RDC

Shop

3PL
Supplier goods
warehouse
Customer

@
R...
What does your DC need?

Building a better mousetrap for today’s omni-channel users

JONES LANG LASALLE

Source: Jones Lan...
‘Clicks’ are translating to ‘bricks’
U.S. e-commerce demand concentration
Seattle/Puget Sound

Minneapolis

Boston
Philade...
What’s next?
Urban Logistics

This year, omni-channel retailers will turn to Urban Logistics models
to win the delivery wa...
E-commerce facility

Main building attributes

Main location attributions

Mega e-fulfillment centers

- Very large (50K s...
Is your Omni-channel
Strategy Real Estate
Ready?
Real Estate’s role in retail success

JONES LANG LASALLE
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How are new shopping trends impacting your DC network?

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Shoppers are rewriting the rules on how and where they want to shop, many choosing to buy online. How are retailers able to meet their needs? Through a seamless omni-channel strategy that incorporates the right warehouse and distribution space. What should retailers know and how can they succeed to meet the consumer’s ever-increasing delivery demands?

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How are new shopping trends impacting your DC network?

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

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