October 5, 2016
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The growing trend of e-commerce significantly influencing the industrial market is not expected to abate. Online sales are expected to increase 72% by 2020, and that will also fuel the growth of reverse logistics.
New research by CBRE reveals that managing unavoidable product returns is a ‘must have’ need that savvy e-retailers now recognize can drive customer retention and sales.
CBRE’s Petra Durnin says, “The current brick and mortar to e-commerce ratio will shift; brick and mortar locations will shrink and e-commerce distribution locations will increase, allowing smaller distribution facilities in markets that previously couldn’t accommodate them.”
- Return policies strongly influence a customer’s decision to shop with an e-retailer again, thus e-retailers adopt more return-friendly policies that benefit customers
- Top product return categories are clothing (27%), computer software (20%) and books (15%), due to easy re-packaging and being mail-friendly
- Growth of returns is expected to create opportunities for SoCal industrial CRE market
- Logistics footprints will expand to handle returns
- Outsourcing sales and returns to 3PLs will drive occupancy gains
- So far in 2016, 3PL users accounted for more than 11.3 million square feet of leasing activity in SoCal, roughly 17% of the total leasing activity
For comments, questions or concerns, please contact Dennis Kaiser