Ecommerce will continue toshape the retail market for years. Currently, 12.4 % of totalretail sales come from ecommerce, but that number is expected togrow significantly in the next five years. By 2025, ecommerce willaccount for 25% of total retail sales. As it does, ecommerce willshape the retail market.

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"Consumers want things faster with more flexibility and lesshassle and there are no signs that the trend is likely to slow downbut rather the opposite," Scott Recknor, managingdirector and head of asset management at Black CreekGroup, tells GlobeSt.com. "For instance, Cyber Mondaysales this year were higher than ever before totaling $9 billion,up 19% from $7.9 billion last year. And, ecommerce is still in itsinfancy with the sector making up about 12% of total retail salesand is expected to grow to 25% by 2025."

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While online sales will gain market share, brick-and-mortar willcontinue to play an important role in the market. Retail andecommerce will continue to balance the retail market. "We areactually seeing ecommerce complementing retail with greateradoption of omnichannel distribution," says Recknor. "Businessesare changing how they operate, understanding the importance ofoffering the consumer more flexibility by either purchasing orreturning products either online or in-store. Warby Parker, Casper,Wayfair and Amazon have really done this well. I recently read thatcompetition among retailers has led to a 41% growth of BOPIS (buyonline, pickup in-store) services this year, which proves the pointthat shoppers are increasingly looked for convenience and timesaving."

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Industrial, however, will continue to be the darling of themarket has ecommerce sales grow. With more online shopping, demandand pricing for warehouse space will only surge even more."Ecommerce requires up to three times as much warehouse space onaverage than traditional brick-and-mortar retailers with theaverage consumer product like toothpaste being stored in four ormore distribution warehouses from point of manufacture to point ofretail consumption," says Recknor. "So as ecommerce continues togrow so will the demand for space as every $1 billion of onlinesales equates to roughly one million square feet net new demand forwarehouse space. Additionally, as consumers' expectationsaccelerate to same-day fulfillment—and even one-hour delivery—manyindustrial tenants are sourcing smaller distribution sites in moredensely populated locations. Not to mention the reverse logisticsaspect of ecommerce as retailers need facilities to process returnswhich adds to overall demand."

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These users aren't just looking for any ecommerce space, either.They are looking for last-mile delivery that is close to the enduser and with state-of-the-art features. "Online retailers areseeking to optimize last-mile delivery, which means they areconstantly looking for space that is closer to the end user, so weare seeing a variety of warehouse needs depending on what a tenantis delivering," says Recknor. "For example, Amazon ended its grounddelivery contract with FedEx earlier last year as part of a plan togrow its own logistics network in order to provide millions ofAmazon Prime customers with same- or next-day delivery. To achievethis time-sensitive goal, the company is increasing reliance onlast-mile distribution centers near population centers. Thislast-mile focus is driving Amazon and other retailers to seekadditional warehouse space near large cities to facilitate quickerand more efficient distribution to customers. It is estimated thatAmazon already has centers located within 20 miles of half thepopulation in the U.S."

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To take advantage of these trends, Recknor recommends investorsshould pay close attention to online retail sales activity."Investors should continue to monitor these trends and consider howthey may impact demand for different types of commercial realestate and the performance of their own portfolios," he says.

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Kelsi Maree Borland

Kelsi Maree Borland is a freelance journalist and magazine writer based in Los Angeles, California. For more than 5 years, she has extensively reported on the commercial real estate industry, covering major deals across all commercial asset classes, investment strategy and capital markets trends, market commentary, economic trends and new technologies disrupting and revolutionizing the industry. Her work appears daily on GlobeSt.com and regularly in Real Estate Forum Magazine. As a magazine writer, she covers lifestyle and travel trends. Her work has appeared in Angeleno, Los Angeles Magazine, Travel and Leisure and more.