Most SoCal Residents Shopped Online During the Holidays
64% of Southern California residents shopped online this holiday season, 5% higher than the national average.
Most holiday shoppers in Southern California purchased items online this holiday season. A holiday shopping report from CBRE—which estimates that national holiday spending will top $37 billion for 2018—showed that 64% of Southern California shoppers purchased items online, 5% more than the national average.
“Though convenience has always been the key propellant for the success of online sales, what truly set 2018 apart from prior years was brick-and-mortar retailers truly embracing the omnichannel idea,” Dan Hunker, retail research analyst at CBRE, tells GlobeSt.com. “Aside from buy-online/pick-up-in-store (BOPS) options, the buy-online/ship-to-store (BOSS) option is a win-win for both retailers and consumers. Retailers can focus on stocking their shelves with essential items while the customer can bypass crowded checkout lines and shipping fees to complete their orders quickly.”
Mobile apps helped to fuel the increased activity as well this holiday season. “When you couple SoCal’s retail infrastructure with the ease of online ordering, it creates a true force to be reckoned with,” says Hunker. “Smart app streamlining has also made purchasing from a mobile device a preferred choice of shopping. During Black Friday, $2 billion was generated nationally from orders that came from a smart device. This trend is evident in our local market as well since a little more than 3.7 million adults have said they purchased an item online from their phone or similar smart device.”
The increase in online shopping activity has created a need from both logistics and reverse logistics centers in Southern California. “In 2018, e-commerce related activity accounted for more than 41% of total gross activity, over 33.5 million square feet, and more than 22 million square feet of positive net absorption,” Jamil Harkness, senior industrial analyst at CBRE, tells GlobeSt.com. “Logistics activity surged as retailers made big strides in online sales, heightening supply pressures to deliver on next-day/same-day delivery and returns. For example, four top companies in delivery, ecommerce and retail combined leases of more than 5 million square feet to facilitate the handling of return volumes. In addition, other 3PLs expanded their industrial footprint to handle supply chain demands related to deliveries and returns.”
With an increasing need for logistics space, supply chain issues are emerging. Stores are now investing in their own logistics centers and supply chains to fulfill shipping promises to customers. “Logistics and e-commerce related companies face supply chain issues as they work tirelessly to deliver on the promise of next-day/same-day delivery,” explains Harkness. “Investing in fulfillment centers and other supply chain technologies has helped many companies keep that promise, stay competitive with big ecommerce players and become better equipped to handle high volumes of orders and returns. Nordstrom, Walmart and Lowe’s spent a lot of money on store upgrades, technology and fulfillment centers to improve their supply chain, which is critical to the continued success of the Southern California region, a top market for most companies.”