How is E-commerce Changing Distribution Center Site Selection?

How is E-commerce Changing Distribution Center Site Selection?

As e-commerce sales march ahead of in-store sales, the major issue discussed at the Retail Industry Leaders Association’s (RILA) Retail Supply Chain Conference: Logistics 2013 was best practices for developing and executing an omni-channel distribution strategy. And real estate—particularly distribution centers (DCs)—is a significant part of the process. This article reviews the main questions asked during the conference.

Key findings

Retailers are evolving their multichannel strategy—from outsourcing fulfillment operations to third parties as a short-term solution to taking it “in-house” by building DCs that can handle both individual and store orders in the same facility.

One solution to facilitate same- and next-day delivery that is gaining traction among retail supply chain executives is locating fulfillment facilities closer to their customer base in order to meet service commitment goals such as aggressive delivery schedules.

The building criteria for a multichannel facility is limiting the search for big box space to only a few existing opportunities. It is also driving retailers towards customized build-to-suit developments that include: Larger mezzanine areas on multiple levels, more parking for more employees, access to rail, highways and air transportation, and both heating and cooling systems.

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