E-commerce drives industrial change
The growth of online retail has changed the industrial and retail landscape, increasingly blurring the lines between the sectors amid supply chain fragmentation, according to CBRE’s annual Perth Market Outlook presentation.
Christine Miller, CBRE’s senior director for supply chain services, said the drive for efficiency and extreme convenience in retail was shifting the goal posts.
“Previously, decisions were based around product and price, however, now we want everything customised and we want it today,” Miller said. “It’s those preferences that are enabling automation to come into the supply chain, while at the same fragmenting it completely.”
Miller said traditionally, retail products have been housed in large warehouses and distribution centres, however, the focus on same-day/immediate delivery is seeing more companies fragment their locations closer to end users.
She said the mall experience is also expected to change dramatically in future years, as delivery services become increasingly sophisticated.
According to Miller, e-commerce giant Alibaba’s recent pursuit of a mall operator in China signals a major shift in the landscape of retail and how the lines between online, bricks and mortar and the industrial sector are being blurred.
“What this means is that you can go to a mall, make your purchases, have them delivered to your home right there and then, and then go on to enjoy all the amenities the mall has to offer without having to worry about carrying around all your packages,” she said.
Richard Cash, CBRE’s director of retail in Perth, said it was imperative retailers embraced online if they were to remain competitive.
“The internet has enabled customers to become more informed than ever. They now research the products online, visit a store to touch and try the product and then make the purchase at home,” Cash said.
Speaking about investment in Western Australia, CBRE’s head of research for Australia, Stephen McNabb, said Perth was an attractive destination for those with a five-year investment horizon.
“For every year we spend above trend, the cycle tells us we spend one year below trend. After five years above trend, Perth is now in its fourth year below trend,” McNabb said.
“Capital injection in Perth is expected to increase over the next five years as yield compression reaches its peak in Sydney and Melbourne, and investors now focus more on relative income yield as the main motivation for investment.”
CBRE also said their latest Investors Intentions Survey highlighed 30 per cent of Asian investors list Australia as their preferred APAC destination for investment.
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