How consumers connect with brands and buy products and services has ebbed and flowed over the years. Sure, retail has been on a downward trend, but Black Friday never fails to get hoards of shoppers into brick-and-mortar stores.
But there’s little doubt that we are firmly in the grip of the digital era, and a growing number of consumers are turning to eCommerce solutions. What does this mean for the commercial real estate landscape?
The Astronomical Growth of eCommerce
The mention of Black Friday always congers up images of frantic shoppers. But what about Cyber Monday or Prime Day? For more than a decade, consumers have increasingly pulled out their credit cards while still in their pajamas to spend hundreds of millions online – without the pushing and shoving or traffic jams.
eCommerce has become a way of life, and more businesses have pivoted to online sales in the face of the COVID-19 pandemic. By the end of 2020, eCommerce growth in the U.S. alone jumped a stunning 40.3% over the prior year to over $839 billion. By 2022, global eCommerce sales could soar to nearly $5.7 trillion.
How eCommerce Changes the Commercial Real Estate Landscape
There’s a misconception that the pivot away from physical stores will be the kiss of death for real estate values. But this isn’t the case at all. Ecommerce isn’t the end of physical buildings; it just means there is another “switch” to the type of space that these businesses need to run their operations.
For example, eCommerce requires an intense focus on logistics and fulfillment. Some experts have estimated a requirement of roughly 1.2 million square feet of distribution space for every $1 billion in sales. And the availability of this space might be challenging depending on the market.
Just because consumers are buying online, that doesn’t mean that every eCommerce business is being run from a kitchen table or basement. Many eCommerce businesses are sophisticated organizations or startups that want to project a professional image. And having dedicated office space for owners and support staff has become a priority for these businesses.
Need Help Fulfilling Your CRE Needs in Charleston?
eCommerce isn’t just growing relative to physical retail; it’s accelerating at a breakneck speed. If you’re involved in this industry, you understand that the need for administrative and other space to operate your business is just as urgent.
At Calwell Commercial Real Estate in Charleston, SC, our commercial realtors and property managers have over 80 years of combined experience helping clients achieve their goals. Contact us today to learn more about how we can help your eCommerce business in the coming year.