The need for speedy delivery and the last-mile problem are only beginning, reminds Strasmann, who says that ecommerce has only been dominating the retail world for the last five to 7 years. “We are only in the first inning of this,” he adds. “The segment of the population that purchases online is only growing, and this has a long way to go.”

LOS ANGELES—Shippers are rapidly shifting from delivery and logistics strategies with multiple infill centers, according to a new study from CBRE. With the push for online retailers to deliver goods purchased online as quickly as possible, retailers are finding that multiple infill center locations in an inner city are the best solution to solve for the last mile.

“Traditionally, you had big box fulfillment centers that you would place your orders in, and they would get the order to you in three to five days,” Kurt Strasmann, senior managing director at CBRE, tells GlobeSt.com. As this industry has matured and is evolving, speed is used as a very important component of retailer's strategies. The most efficient means to get the customer products faster is to locate closer and closer to where your customers are located. What has happened is that these retailers are slowly migrating to infill centers in inner cities to achieve same-day delivery. They have very strong analytics to determine where their customers live, what they are buying and what their purchasing powers are. Slowly, these companies are leasing small 20,000 to 100,000 square feet of space in the inner city.

While leasing smaller infill storage facilities is a great solution to the last mile logistics issue, in Los Angeles, the supply for these spaces is limited at best. In some submarkets, like the South Bay, there is sub 1% vacancy rate. As a result, these facilities, especially quality facilities, are difficult to find. “In the Los Angeles area, there is a low vacancy rate already. It is highly difficult to locate a class-A facility,” adds Strasmann. “It is possible to locate a class-B and class-C building, but they are not always very efficient buildings to operate out of. Due to the low availability of this product type, these retailers are taking what they can get and will make due with what is available. Retailers are using speed as a competitive weapon, so retailers are taking what is available.”

There are other solutions as well, including pick-up lockers and multi-story warehouses. While lockers have also been tested, the report shows that 76% of millennials want to receive their online shopping purchases at home, rather than pick up in the store. “Lockers are out there now, but in reality, people want their product overnight or same day delivery,” says Strasmann. The ecommerce concept has evolved so that people want their product the same day. It is a fine line between speed of delivery and cost of service. Obviously, the more facilities that you open up is going to cost you more money. Right now, the customers are telling people that speed is the most important component.

The need for speedy delivery and the last-mile problem are only beginning, reminds Strasmann, who says that ecommerce has only been dominating the retail world for the last five to 7 years. “We are only in the first inning of this,” he adds. “The segment of the population that purchases online is only growing, and this has a long way to go.”