CHICAGO, IL – JLL has developed a new strategy to help retailers evolve their business models and move to full e-commerce operations following the outbreak of the COVID-19 pandemic.
To ease the pain of retailers in a post-pandemic world, JLL retail and industry experts want to help retailers who were not fully prepared to transition to online operations.
The new task force will assist in ratifying supply chains to address the new volume and last mile distribution requirements over the past six months.
"Not many retailers could have foreseen the dramatic acceleration in online spending and the business boom (called BOPIS) that the pandemic hit on retailers," said David Zoba, global retail chairman for JLL. “Retailers were caught between the operational challenges of complying with physical store regulations, which were often different for each location, while also facing increased pressures to meet the demand for online orders. We also sorted the options for product distribution into a market that didn't specify who could deliver. "
To simplify the needs of retailers as product and distribution become one, JLL has developed a blended, dedicated service model that covers the full lifecycle of evolving real estate needs between retailers and retail property owners.
JLL's Retail, Industrial and Capital Markets business unit stakeholders will join forces to create the company's new Retail Task Force. The task force will strive to provide its clients with bespoke real estate solutions through an end-to-end approach that encompasses all of the company's expertise.
Through the task force, JLL will provide professional advisory services and solutions to retailers, users and investors, supply chain advisory, retail and e-commerce sales, urban logistics, retail redevelopment, capital market valuation system for portfolios, industrial diagnostics and a property system that tracks real estate demand and metrics examined.
"Before COVID, only the world's leading retailers really invested and focused on the last mile," said Kris Bjorson, director of e-commerce retail sales Americas at JLL. “Now that US consumers have helped e-commerce account for more than 20% of total retail sales – a three to five year leap – we see a tremendous opportunity to better serve all retailers. integrated as a team with all the specialist areas required today. "
"Retailing as an industry is in recovery mode. An up-to-date understanding of capital markets and asset valuation by institutional investors is required to maximize opportunities," said Naveen Jaggi, JLL's president of retail advisory in America. “Investors were already watching the rise in retail job vacancies before the pandemic, which has subsequently led to increased demand for domestic manufacturing. Dark stores or vacancies often provide an ideal opportunity for last mile transition from fulfillment centers, especially as competition for e-commerce deliveries continues to increase. "
JLL notes the lack of vacancies in the industry; The national vacancy rate is currently below 4%.
"Industrial rent growth remains positive and vacancy rates continue to hit historic lows that offer investors attractive, stable, long-term returns," said Craig Meyer, President Industrial at JLL Americas. “In some sectors, demand is growing faster than available inventory, especially in high-density urban environments. This makes conversions even cheaper in order to reduce the effects of the labor, construction and infrastructure costs associated with a complete conversion. "
The cold room is still in demand within the industrial sector.
JLL's task force plans to help customers cope with the existing complexities associated with refrigerated warehouse conversions that require additional planning due to strict refrigeration regulations.
With such complex issues, the JLL team will provide support tailored to customer needs and property restrictions assessment by developing a total cost-profit model. The team will aim to guide customers through common challenges such as zoning, agreements, terms, restrictions, taxes, truck traffic, hours of operation, and pollution.
Online grocery store for delivery and pickup in the US reached $ 7.2 billion in June; an increase of 9% over May according to survey data from the online grocery advisor Brick Meets Click. E-commerce leasing The second quarter totaled 55.9 million square feet year-to-date, and groceries and beverages rose to 11.4 million square feet due to the increased adoption of online groceries.
"There's no denying that conversions are a multi-faceted endeavor, and determining financial return is often one of the biggest problems in the planning process," said Chris Angelone, national director of retail capital markets at JLL. "By developing a total cost-profit model, our clients can have complete confidence in their spending, from valuing dark business assets to justifying rents and financing to getting out of pricing and beyond."