Ship-to-Store Strategy Gains Popularity Among Retailers

Ship-to-Store Strategy Gains Popularity Among Retailers

ship-to-store

February 2016

Buy it online. Pick it up in the store. This new twist on e-commerce is taking hold with many retailers, but is it working? A new report from Retails Systems Research/SPS Commerce reveals that a growing number of retailers — including giants like Walmart, Lowes, Home Depot and Target — are offering customers a buy online, pickup in the store service.

According to the report — reviewed by Bisnow here — 61 percent of retailers offered a ship-to-store option as of September of 2015. That’s an even larger majority than the 53 percent of retailers who offer a 2-day delivery fulfillment option.

For retailers, the benefit of this strategy is twofold. The shipping fees for delivery of online purchases can be enormous, even for high-volume retailers. A ship-to-store option can bring those expenses down. It also gets customers in the door of a brick-and-mortar store, where they are more likely to make impulse buys.

Consumers appear to be warming up to the idea. A survey by UPS found that 38 percent of shoppers will now choose a ship-to-store option. That’s an uptick of 3 percent from 2014, with the potential to grow even more in the years ahead.

The Dangers of Ship-to-Store

Ship-to-storeThe Ship-to-store strategy is not foolproof, however.

Just last year, a JDA Software Group Inc. survey of more than 1,000 U.S.-based online shoppers revealed some troubling numbers. Of the 35 percent who opted for a ship-to-store option in the previous year, 50 percent reported having problems retrieving their purchases.

This approach only works if it is convenient enough that it doesn’t drive customers away. The ship-to-store strategy can be an excellent tool, but only if the stores are staffed to handle the additional volume.

Capital continues to enter U.S. real estate market

Capital continues to enter U.S. real estate market

new-capital

New capital is entering the real estate market. Where will it end up?

Dec. 2015

Money is flowing into the U.S. real estate market, and that trend is expected to continue in 2016. The big question: Where will all that new capital go?

Total acquisition volume for the 12 months ending June 30, 2015, was $497.4 billion (up 24 percent year-over-year), according to the 2016 ULI Emerging Trends Report. That type of growth isn’t likely to be sustainable, but the fact remains that investors will have capital to spend in 2016.

As we try to figure out where that new money could flow, here are a few options:

  • Secondary markets: We’ve written about the rise of 18-hour cities before, and this seems to be a likely place for investors to spend capital. Markets like Austin, Denver, San Diego, and San Antonio are “cool,” “hip” and starting to grow.
  • Outside the box: Investors may rethink their definition of real estate, or at least expand it. ULI highlighted the expansion of Real Estate Investment Trusts (REITS) to include cell towers and outdoor advertising. The market could grow by offering investors more opportunities to invest in infrastructure.
  • Comeback story: Old properties are becoming new again thanks to the popularity of renovation and redevelopment. Consider the number of companies that are re-thinking the design of their office spaces. In some cases, the current demands of millennial workers can make rehabbed industrial space even more desirable than new Class A options.
  • Going alternative: Properties that have traditionally been of interest to a small number of investors (medical offices, senior housing, data centers, labs) may find themselves in demand on a larger scale.

Clearly, CRE investors will be looking at their full range of investment options in 2016. The U.S. market offers plenty of choices, and now investors have the capital to match.

E-Commerce Continues to Push Supply Chain

E-Commerce Continues to Push Supply Chain

8.26.2015

E-commerce sales continue to grow—by an estimated 4.2% in the second quarter—while overall retail sales grew just 1.6%, according to the Commerce Dept. Online sales still only make up 7.2% of total sales; however, this shifting in consumer behavior and supply chain usage has retailers and CRE developers rethinking how to reach those powerful consumers. Here’s a look at current trends:

Third-party logistics providers see strong demand due to chanchi_saddle_creek2a_CenterPointges in the supply chain. 3PLs are in big demand right now for transportation, warehousing, and fulfillment services, particularly in the next-day and same-day delivery arena. 3PLs are in the highest demand in dense metro areas like Chicago, New York, Dallas, and New Jersey. Click here for more on where this is headed.

E-commerce boosting sales of traditional retailers as some successfully tap into the supply chains. Big U.S. retailers such as Home Depot, Target, and Wal-Mart are building fulfillment centers to package and ship goods to consumers more productively and profitably. Home Depot and Target saw their online sales grow by 25% and 30%, respectively, in the second quarter. Click here for more.

Westfield renderingBricks and mortar retail redevelops to compete.  Westfield Corp. will spend millions on LA’s Century City Mall to compete with local retailers and the rapid growth in e-commerce. Click here for more on their attempts to make the mall an irreplaceable “lifestyle center” (which cannot be duplicated online). 

Millennials: Climbing Walls and Open Space

Millennials: Climbing Walls and Open Space

collab space generic2

Millennials are the hot commodity these days, but what do they want in office space? Scott-Spector, principal of New-York-based architectural firm Spector Group, describes how to appeal to Millennials in workspace design:

  • Amenities. And more amenities—Bring on the fully stocked kitchens, the pool tables and the health clubs in the building.
  • Collaboration spaces –so they can share ideas and work in flexible group arrangements
  • Flexibility—to move desks around, pull up benches, etc.

What NOT to include?

  • Private/enclosed spaces
  • Poor lighting
  • A shortage of free food! (A good salary and an awesome climbing wall are not enough, apparently).

See this story for more on Millennials. And, still more on this topic out of Atlanta.

(Pictured above: an open office in the UK, not affiliated with the referenced articles)

Millennials Are Shaping Multifamily, Office

Millennials Are Shaping Multifamily, Office

Atlanta

Strong multifamily growth supported by urbanization and continued job growth. Atlanta is reflecting the national trend of city migration. Millennials desire long-term renting in the city with access to trendy amenities and nearby city entertainment, and Baby-boomers are following suit. According to a CBRE report, the apartment vacancy rate is 4.8% with a home-ownership rate of 63.4%–the lowest since 1967.  Popular Atlanta submarkets for Millennials and other renters include Buckhead, Midtown, Old Fourth Ward, and Inman Park. Find out more here

Millennials are a target for this Buckhead development in Atlanta

Find out more on this Buckhead multifamily development. 

Orange County

Next-generation office developments are the trend in city centers like Orange County.

Irvine Co. is developing six next-generation office structures. Nicknamed “next-gen” office buildings, these developments intend to balance productivity and efficiency along with modern collaborative features in the workplace—features including cafes, wellness-centers, and other indoor and outdoor activities. The developers say the campuses they are building are not totally unlike college campuses. The “amenities race” is not limited to multifamily. Check it out in this office development story.

Retail: E-Commerce Beyond Amazon?

Retail: E-Commerce Beyond Amazon?

Retailers are following you online—and here’s why that’s good. Forbes’ writer Erika Morphy moves us past Amazon and digs into how technology, such as SmarterHQ, can help online retailers predict buying patterns and serve up online options accordingly. Check out this e-commerce and overall retail story. 

Coastal markets hot for retail investment–As retail rebounds post recession, Real Capital Analytics looks at what markets are hot. Seven of the top 10 are coastal, with Chicago, Dallas and Houston the exceptions. The top? Manhattan, which accounted for 42 percent of the total investment sales. Click here for more.