In 1936, The New York Times claimed, “A rocket will never be able to leave the Earth’s atmosphere.” In 1943, the chairman of IBM said, “I think there is a world market for maybe five computers.” Advances and tools that once seemed impossible are now commonplace – from flying in a commercial airplane to holding a device as powerful as a computer in the palm of your hand.
At CRE.Insights: The Last Mile, speaker David Schwebel, senior director of business development with Swisslog Technology, began his session on the automated age of industrial with these premises:
- Change is constant.
- Things don’t always go as you expect them.
- You will be wrong more than you are right.
- When you become right, it changes the world.
“It’s not the strongest that survive; it’s those who adapt,” Schwebel said, citing an unknown sage.
A few key players disrupting business as usual: Amazon, which is digitizing the act of consumerism and making us into the product; Walt Disney, which plans to deploy driverless shuttles at Walt Disney World; and Walmart, which seeks to integrate seamlessly its online and in-store operations.
No discussion of current e-commerce trends would be complete without addressing the commanding influence of millennials, 80 million strong in the U.S. and wielding $600 billion in spending power annually. Surveys show that this generation shops differently than its predecessors: 67 percent make their purchases offline; however, 76 percent research online before purchasing.
Like their parents, almost 80 percent of millennial shoppers are influenced by price, even as they value authenticity, local sourcing and other qualities. “Nothing beats a discount,” Schwebel said, noting that millennial consumers spend an average of three minutes searching for coupons before they buy.
How can companies meet consumer demand when nearly a quarter of consumers are willing to pay for same-day or instant delivery? Forward-thinking companies are planning outside the traditional delivery truck to solve last-mile challenges. Drones could provide same-day delivery to rural areas, autonomous ground vehicles with lockers could serve less-dense urban areas, while very dense urban areas could receive deliveries via droids or bike couriers. Or, warehouses could fly, deliveries could arrive via parachute and drones could be self-defending to protect packages from interference on the last-mile journey.
The future of retail could include synergies between the brick-and-mortar world with online retail, maximizing sales by making goods accessible to the consumer wherever and whenever they are. One model for the future of retail, the Amazon Go store in Seattle, opened to the public this January after more than a year of beta-testing with Amazon employees as the only customers. “Amazon Go is supposed to be lineless, but I stood outside to get in the store, so we’re not there yet,” Schwebel said.
Wheelys Café’s Moby Mart provides an autonomous, staffless mobile store, open every hour of every day. The solar-powered, data-driven Moby Mart currently operates in Shanghai and is expected to launch in Sweden later this year. Customers can locate the closest Moby Mart via app, call it to their location and shop for everything from fast food to shoes. The company website specifies that it is neither a retailer nor retail chain, but provides retailers with the technology and hardware they need to serve their customers. “Moby Mart is to the traditional small store what the car was to the horse. In the nearest future, there will be tens of thousands of mobile stores all over the world.”
While robots are unlikely to ever fully replace humans in industrial facilities, the increasing importance of harnessing automated technology to serve the needs of e-commerce businesses can’t be denied. Commercial real estate owners and developers must anticipate current and future technology in creating or repurposing e-commerce centers, making these facilities ready for humans and robots to work collaboratively.
In one example, Schwebel examined how a fulfillment center could be located within a mall. Two employees could run the facility using racks and sort everything into branded shopping bags that could be handed right to the customers
To circle back to his initial premises, dreaming big can backfire – or it can pay off spectacularly. Instead of saying why something can never be done, Schwebel asked, start thinking “why can’t we?”
Marie Ruff is Communications Senior Manager at NAIOP.