On-line retail growth forcing change on logistics providers

Patrick Kurowski CBREAre the crowds any thinner in the shopping malls this year? Most would take that as a highly negative sign, but a more nuanced approach should take into account whether on-line retailing isn’t finally having an impact on how long you wait at the counter. Whatever the answer, a recent study by CBRE suggests that on-line retailing is definitely making itself felt in the product supply changing.

‘Online retailing is an established activity across much of Europe and expected to grow further over the next few years,” says Patrick Kurowski, Director of Industrial Department in CBRE. “It is already a significant driver of logistics market activity, and its future growth will introduce significant challenges and opportunities for the logistics networks needed to support it. This is not merely a case of increased demand for generic logistics space.”

There’s no question about it: technology is disruptive. And adapting to new shopping trends turns out to be just as important for trucking companies as it is for retailers, points out Kurowski. “It will also require the development of higher specification logistics buildings tailored specifically to the needs of online retailing, and capable of handling higher levels of mechanization and process complexity.”

Across Europe 40% of 16-65 year olds use the internet to shop and 47% browse for goods online. Both behaviors are significantly more prevalent in northern and western Europe (Sweden, Germany, UK and France) than they are in southern Europe and CEE.

Retailers expect the online proportion of their total sales to double from 5% to 10% over the next two years. While 70% currently regard themselves as primarily traditional “bricks and mortar” retailers most have begun the process of evolving into multichannel retailers, with 63% expecting to be fully-integrated multichannel retailers over the next two years.

Overall internet access in Europe has risen by nearly 400% since the year 2000, and credible estimates put the rate of future growth in online retailing in Europe at 12-15% per annum over the next five years.

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