3. Expansion of Logistics Networks
Retailing is more than selling goods on store shelves. To be successful, a modern warehouse network must be in place in order to fulfill orders from all channels. The industrial real estate sector has recently been one of the biggest stories in commercial real estate, with record-low availability, prodigious rent growth, and a robust development pipeline. The primary driver of this performance has been retailers occupying more warehouse and fulfillment space. Retailers have been responsible for 35% of industrial leasing in 2022, year-to-date, when factoring in the food and beverage and general retail and wholesale categories.
Some retailers have mastered their supply chain to the point of marketing their services to others. Gap Inc. has begun offering its logistics network to others as an additional source of revenue, which they call GPS Platform Services. With 13 distribution centers and more than 9,000 employees in their network, they can fulfill same and two-day delivery, as well as international shipping. In addition, they offer reverse logistics services, which is critical around the holiday season as detailed in CBRE’s 2022 Holiday Trends Report.
Although many still aren’t sure of the metaverse as a sales channel, several retailers are investing in virtual worlds to plant strong roots for what could emerge as the next step in the evolution of the omnichannel process. We have already seen music events, fashion shows and the release of branded virtual goods in the metaverse, so what will be the next step?
Retailers are building metaverse-based touchpoints through activities such as games and meet-ups. Some may view these efforts as a novelty, but retailers are viewing them as a critical foundation to establishing their next-generation digital presence. McKinsey & Company predicts that the metaverse could generate $5 trillion in value by 2030.
Conclusion: Although not all retailers will master the omnichannel approach, the term “omnichannel” may be retired in favor of simply “retailing.” As we observed during the pandemic, retailers that master the multichannel approach will find themselves more resilient to market conditions and more successful in the long run.
Brandon Isner is head of Retail Research for the Americas at CBRE