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E-Fit for the Future

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E-fit for the future

To date, warehouse take-up for online sales distribution has not represented a huge volume of floorspace. Of the 50m sq ft-plus of additional warehouse space (in units of over 50,000 sq ft) that has been taken up by retailers between 2001 and 2006, Gerald Eve estimates that less than 10% is being used specifically for online sales fulfilment. However, the report points out that online retailers’ warehousing needs are likely to grow briskly over the next four years on the back of a significant rise in the proportion of online sales (from 10% to 15% of all retail spending in 2011), the increasing importance of multi-channel marketing and far higher levels of broadband connectivity.

In order to forecast different levels of online spending across the UK, Gerald Eve has analysed household spending profiles county-by-county, and projects that the highest concentration of internet spending in 2011 will be in the North West, Midlands and South East. The size and location of customer catchments will be an important factor in retailers’ choice of sites for distribution facilities, together with good road connections, cost and flexibility of labour, and the number of distribution centres required.

Summing up, Leonard Sahling, first vice president of ProLogis Research Group, says: “The success of any retailer’s e-commerce strategy will depend on how effectively it delivers the right goods, on time, to customers. Retailers must think very carefully about the best way to configure their online distribution strategies and ensure that they make the right property choices to fit their – and their customers’ –

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