A new report from Colliers predicts the future of retail and logistics in Europe. With spare logistics space in European cities at an all time low and growth in online shopping at an all time high, massive warehouse space has become a crucial part of supporting modern life.
The European Retail & Logistics Insights report says that multi-storey warehouses, deep-sea ports and fewer, bigger shops will make up the future of retail as millions more shoppers head online around the world.
The report has highlighted six key predictions for the years ahead.
- High street face-lifts: Regional and sub-regional centres will be revamped with cafes and leisure outlets, parcel collection points and shared work-spaces filling vacant shops.
- Super-sized warehouses: Increasing land costs mean developers will find more floor space by building upwards. The ability to store closer to people’s homes gives retailers better use of their supply chains and retail outlets as pick up locations. In Japan, ProLogis Parc Narita III is a 61,400m2 giant industrial facility spread over seven floors. Europe Could soon get its own skyscraper sheds.
- Deep water ports: Container vessels now hold more than 25 times as much cargo compared with 1970 and ports need to evolve to make room. Global logistics and shipping industries have evolved to capture and facilitate growth in trade, making deep water ports a necessity. Examples of this increasing demand for large ports can be found in the port of Rotterdam (such as the second Maasvlakte).
- Digital urbanites unite and take over: Research shows that urban-based, digitally-literate consumers will dominate countries’ populations over the next two decades having a profound impact on how retail is shaped and delivered.
- Delivery methods will change: Despite the buzz around drone deliveries, current airspace regulations could keep drones grounded. Retailers could, instead, make better use of existing last mile delivery methods such as pedal bikes and Uber taxis. A trend you can already see in the meal and food delivery services in the Netherlands. Combined with the increasing concern over the environment, bicycle couriers or electric cars could well become a totem for sustainability minded retailers.
- Show rooming pays: ‘Show rooming’ is jargon for when shoppers look but don’t buy, purchasing the product online instead. This has been one of the drivers for companies reducing retail space and shifting capacity to more cheaply priced warehouses, which can deliver straight to people’s homes.
Retailers across the globe are increasingly adapting and shifting from the high street to warehouses to save money on rent and create more efficient supply chain models.
Read Europe Real Estate’s latest Retail Minds with Dmitry Kostygin, the chairman of the board, Ulmart, discussing the shift in the retail market and the necessity to adapt to survive.
Download the full report here.
