Last-Minute Brown Boxes and the White Hot Industrial Sector

The Holidays are upon us and there are a few items our cherished loved ones have requested multiple different times.  There was a list that was given two weeks ago or even more, maybe you have forgotten about it or delayed for whatever reason on the purchase of said items.  Now the time has come where you realize there is only a few hours left before a big event and now you must procure those perfect gifts and time is of the essence! You rush to the nearest mall that carries the majority of the items on your list.  You realize the mall is packed while you drive around for almost an hour trying to find a parking spot. Once inside the mall you fight through the throngs of people and shop every store that will carry your items.

After pursuing the purchase of all of your gift items, you are forced to realize that the majority of the items are already either sold out, the wrong size or color.  Your go-to plan: go get the most expensive item (within your budget) on something that was similar but NOT quite the right gift and hope the recipient will love the thought and effort of your ill-fated holiday shopping trip. Thus, you end up feeling awful, especially knowing that your loved ones will knew you waited until the last minute to get your shopping completed and you did not come through. My friends tell me this is horrible, but I wouldn’t know…

The Rise of Exclusive Online Holiday Shopping

I am an exclusive online shopper, no matter the weather or how lengthy the list, the shopping can be completed safe and secure online, and expecting non-descript brown boxes to show up on your doorstep within two days, and for some items on the same day. Although it has been around for a little over a decade, it is still an emerging and ever-changing. In 2016 there were 209.6 million online shoppers and there is an expected increase to 230.5 million in 2021.

The United States is a world leader based on online shopper penetration (statista). This was recently highlighted by a survey completed by analytics and economic forecasting firm comScore and found that online purchasing has increased to 51% of all purchases online in 2018.  This is a 3% increase from 2015 and this number does not include the highly anticipated holiday shopping frenzy that the majority of everyone participates.

This is creating exciting and lucrative opportunities for any company that can help facilitate the delivery of the online purchases such as industrial owners, users and providers of those delivery services.

Where do the Brown Boxes Come From and How Did They Get Here so Quickly?

The continual increase in online consumption vs traditional retail brings on a new set of challenges for suppliers, manufacturers, warehousing and logistic companies. This model puts enormous pressure on the dated brick and mortar retail establishments that once dominated the retail landscape.

There has never been from my recollection a more dynamic time in the industrial sector, especially in Atlanta. This “click & consume” purchasing methodology has spawned a new and exceedingly strong demand of industrial use and will continue to increase the demand and consumption of warehouse, logistics, and 3PL companies that all play a key role in facilitating these transactions and deliveries. There are a number of lucrative opportunities for any company that can help facilitate the delivery of the purchase on the challenging “Last Mile.”

The Last Mile and Atlanta’s Robust Industrial Market

If you are not familiar with the term “Last Mile,” it is essentially the logistics of delivering products from warehouse to end user or final destination. This is considered to be the most expensive and inept areas of logistics and delivery of products.  Some estimates put the cost of the last mile upwards of 25%-30% of delivery costs. With the significant increase of online purchasing consumers are requiring expedited delivery times. Due to the increased package volume we are experiencing, the last mile can only be enhanced with increased warehousing and companies that deploy fleets for doorstep delivery. That has led to one of the most robust industrial markets in recent memory in the Atlanta SMSA.

As per Costar, currently in Atlanta we are experiencing a 6% vacancy rate in the warehouse/logistics sector and a strong 3.6% in the NW Corridor.  We are only expecting around 10M SF of industrial product to be delivered within the 1st and 2nd quarter of ’19 in Atlanta as a whole and the demand will continue to strengthen over the coming years. The industrial sector is as strong as it has ever been and with the proven consumption patterns it will only increase.

So when those brown boxes arrive at your doorstep, think about all the individuals, companies and families you helped to support this holiday season.

By |2018-12-05T17:58:17+00:00December 5th, 2018|Buildings, News|