California Centers

SEP 2017

California Centers Magazine serves retailers, developers, shopping center owners, investment sales brokers and tenant representation firms throughout the state of California.

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34 California Centers Magazine | September 2017 C C Cushman & Wakefield took a simi- lar approach as it set out to tackle the supply chain challenges that can oc- cur on the industrial side, retail side and all points in between. The firm announced its new group, newCom- merce, this past July with the goal being to bridge the gap between om- nichannel shopping, back-end supply chain functions and bricks-and-mor- tar experiential retail. David Gorelick, head of Cushman & Wakefield's retail services for the Americas, feels this is the right time to focus on the retail-in- dustrial marriage as the consumer ex- perience has moved not from stores to online, or online to stores, but to stores and online. "Where a sale is made no longer matters," he notes. "Today's custom- ers want their shopping experience to be efficient and consistent, regardless of where they shop and how they ul- timately make a purchase. The combi- nation of real-time inventory and ef- fective customer service is imperative to attract, satisfy and retain their loyal- ty. Now more than ever, retail profes- sionals need to make cost-effective, in- novative business decisions and craft smart strategies that take advantage of the unique overlap between the retail, industrial, logistics and e-commerce sectors." LOGISTICALLY SPEAKING One of the largest drivers in this shifting retail landscape is the change in delivery models, according to Jeff Badstubner, senior vice president in JLL's San Francisco retail practice. As the borders between ecommerce and brick and mortar continue to blur, so, too, have the methods of payment and delivery. "With the rise of e-commerce and consumers gravitating to more of a 'delivery culture,' greater emphasis has been placed on the last-mile fulfill- ment side of retail logistics, and that's where the true symbiosis between the industrial and retail sectors is today," he says. "It's not just about getting product out of the warehouse and into the retail store anymore — that's just one leg of the journey. It's also about getting that purchased product to the consumer's office or front door. That's a leg of the journey that many retailers are having to grapple with. Consum- ers are also demanding faster delivery, so that means retailers increasingly need fulfillment warehouses closer to their stores and closer to their major trade areas." Managing a customer's service ex- pectations, including delivery time and ease of payment, can be challeng- ing, Gorelick notes. This is particularly true as an appreciation for technology and the lure of the urban core live- work-play lifestyle has altered the tastes of Millennials and others. "Service level and delivery expec- tations have increased dramatical- ly over the past several years," he explains. "That shift, coupled with changes in urban migration patterns, has had a dramatic impact on the ex- pectations of retailers' supply chains and the numbers, types and locations of buildings required to meet those requirements. And, in our incredibly tech-driven society — where smart- phones and tablets allow customers to have near-instant gratification — it's vital to address all points of the retail distribution and delivery network." When experts from the industrial and retail sectors work collaborative- ly, they're able to successfully identify logical locations for warehouse and distribution centers that can accom- modate that "last-mile" fulfillment part of the omnichannel equation. CBRE notes these center generally have to be situated within a few miles of the retailer's majority consumer base for them to be effective. "Determining the ideal location and facility for that last-touch function is an intricate decision involving consid- erations around transportation costs, customer traffic patterns and buying behavior, warehouse-labor availabil- ity, inventory management and other factors," Famous says. Today's retailers are also laser fo- cused on opening the appropriate amount of stores in the appropriate Indochino is a retailer with a significant online presence that also has brick-and-mortar locations. Pictured is the Indochino Store at 61 Post Street in San Francisco.

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