CHICAGO—With the worlds of retail and logistics converging, Cushman & Wakefield saw the need for an integrated advisory offering. Enter the firm's newCommerce platform, announced Tuesday with a view toward integrating Cushman's retail services with logistics, industrial and e-commerce offerings to provide clients with strategies for growth and advancement.
John Morris, Americas executive managing director for logistics and industrial services at Cushman & Wakefield, says the new platform is designed “to help longstanding bricks-and-mortar retailers, eCommerce-only organizations and companies in between adapt to the new landscape.” The advice provided by the newCommerce team can prove valuable “whether you're building a physical bricks-and-mortar presence or choosing between self-perform fulfillment and third party,” says David Gorelick, the firm's recently named executive managing director and head of retail services for the Americas.
On the website for newCommerce, Gorelick and Morris cite “new rules” that retailers must play by. First of these new rules: “It's not about the store of the future; it's about the customer of the future.”
Going by present-day shopping behavior, that futuristic shopper is going to put a premium on immediate gratification, even as he or she continues to value a physical shopping environment. “Consumers crave new retail experiences that meld an engaging bricks-and-mortar store—where they can pick up a product and gauge its quality, while experiencing the brand in a unique way—with the convenience of online shopping,” Gorelick and Morris write in a blog posting on the newCommerce website. “For retailers looking to reduce their physical footprint while boosting online sales, those remaining stores will prove to be more vital than ever.”
In order to better position themselves for success in this environment, companies must employ technologies such as artificial intelligence, deep learning, facial recognition and personalization to help them better understand and respond to customer behavior, according to Gorelick and Morris. “Harnessing big data can be an expensive proposition but it's essential—particularly as retailers court coveted millennial consumers who seek experiential physical spaces and personally-tailored digital media experiences.”
The second fundamental rule: “It doesn't matter where a sale is made, as long as it is made. It can be made at-home, in-store, or on a mobile device. Today the 'store' is always open.”
To be able to compete in the evolving retail sector, Gorelick and Morris say companies must make “cost-effective, innovative decisions that exploit the unique synergies between retail and the industrial, logistics, and e-commerce sectors.” They cite recent Cushman & Wakefield research showing that between 22% and 25% of US industrial leasing is tied to e-commerce, with overall vacancy rates at their lowest point in three decades.
US industrial finished the third quarter with an overall vacancy rate of 5.2%, compared to the 10-year historical average of 8.3%. Accordingly, Gorelick and Morris write, “The most agile retailers must re-evaluate traditional brick-and-mortar footprints and consider greater investment in industrial property, logistical systems and supply chain improvements.”
They cite Walmart, Home Depot and Target as examples to follow. All three have “aggressively revamped their real estate strategies to favor greater investment in online fulfillment, distribution centers and the technology necessary to facilitate same-day and next-day shipping. We expect these trends to continue, as retailers push to keep pace with pure play e-commerce-only contenders.”
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
