MHD PROPERTY FOCUS
REDEFINING THE WAREHOUSE
Colliers has released its new white paper: The Industrial Propety of the Future.
Drive-thru warehouses, crowd shipping, drone deliveries and micro-fulfilment centres are all considered in Colliers recently launched The Industrial Property of the Future whitepaper. MHD sits down with the lead authors of the study to find out more.
T
he consumers of today look very different to ten to 15 years ago. Technology has enabled shoppers to purchase items at the click of a button from a mobile phone, desktop, shop or tablet. Millennials are savvy online consumers, and they know what good service looks like. They have demanding criteria around choice of delivery, speed of delivery and flexibility. This has placed increased pressure on supply chain and logistics. According to Malcolm Tyson, Managing Director – Industrial at Colliers International this shift in consumer behaviour has caused the biggest transformation in the industrial sector in 15 years. “This consumer trend is continuing to grow, and businesses have to respond. It’s put huge pressures on supply chains that have simply never been felt before,” Malcolm says. Considerations around where a warehouse should be, how it should perform, what technology should be introduced are all decisions that are more critical than ever, Malcolm says. At the heart of this shift in requirement for industrial property, experts from the industrial team at Colliers have come together to produce a deep dive into what this means for the future in their new white paper The Industrial Property of the Future. While the initial concept of the paper goes back 18 months, Malcolm 56 | MHD JULY 2020
says COVID-19 has accelerated the radical change in the industrial sector. “Disruptions around COVID-19 have shaken up the supply chain again, and we’ve found many of our customers in this space are looking to gain further efficiencies from their property assets,” Malcolm says. It has also highlighted the need for resilience. “COVID-19 started to squeeze every drop out of the supply chain. It was more important than ever to be able to pivot quickly and ensure that you could adapt your operations, and property plays a huge role in this,” Malcolm says.
IS ONLINE SHOPPING HERE TO STAY? With online shopping set for year-onyear growth of upwards of ten per cent even before COVID-19 hit, Monica Velez, National Director, Logistics and Supply Chain at Colliers International says this change in consumer behaviour is here to stay. However, she says the challenge for many businesses is how they manage to orchestrate the physical product flows to get the product to the customer wherever they may be. “The consumer can shop from anywhere now, from both physical and digital points of contact. So, the retailers have to ensure the customer has the choice while the internal processes need to be set up to meet customers’ expectations. This is challenging and as companies are trying to shift to a truly
interconnected omnichannel operation, they are exploring different technologies and infrastructure to cope with this increasingly complex environment” Monica says. Technologies such as blockchain and machine learning come into play to ensure visibility and stock efficiency in the supply chain. “To gain a meaningful integration between digital and physical worlds, machine learning can offer interpretations for what inventory needs to be held where and can offer very helpful solutions to predict demand fluctuations” she says. For Tim Edwards, National Director – Victoria at Colliers International, COVID-19 caused online shopping to move from a discretionary service, to an essential one. “People were forced to use online for basic needs. When bricks and mortar stores closed, online was the only way to go. This has shifted how people will continue to shop. It’s no longer about discretionary spending, but now about using online for essentials like groceries and household goods,” Tim says.
WHAT DOES THIS MEAN FOR PROPERTY? If consumer habits are transformed, what will this mean for the future of the warehouse? Monica says that warehouses will need to become increasingly customer friendly. “The warehouse is really reinventing itself as an asset. We
