When E-Commerce Players Go Bricks-and-Mortar

ATLANTA—E-commerce is fueled by efficiency. According to NAIOP's observations, customers demand next-day delivery, ability for in-store returns and access to shop on mobile. Retailers must respond with well-located fulfillment centers, scalable distribution channels and fast solutions. And sometimes that means e-commerce plays are trading clicks for bricks.

GlobeSt.com caught up with Thomas Bisacquino, NAIOP President and CEO, to get his insights on E.CON '15: The E-Commerce Conference. But he also offered some keen insights into what's changed year-over-year with regard to e-commerce's impact on commercial real estate in part one of this exclusive interview. Be sure to come back to this afternoon's Southeast edition for part two, where Bisacquino will offer more e-commerce insights you need to know.

GlobeSt.com Last year's E.CON focused on how e-commerce and today's on-demand consumer lifestyle is redefining industrial real estate. What's the focus this year?

Bisacquino: This year's E.CON is extending the conversation into deeper discussions of how both industrial and retail real estate are being fundamentally transformed as 24x7 fulfillment centers. Nearly 200 million US shoppers buy online, and with the demand of next-day delivery and the desire for an omnichannel retail experience, our industry is under tremendous pressure to deliver the right facilities in the right locations.

GlobeSt.com: Why is this conference so vital for industrial real estate players?

Bisacquino: Keeping up with the demand is challenging. Industrial demand is projected to outpace supply again this year, and e-commerce obviously is driving much of that growth.

Fundamentally, e-commerce is where retail and industrial meet. It presents a unique opportunity for developers, and coming to E.CON allows them to meet face-to-face with the retail and supply chain experts. It's an experience that is unmatched anywhere else—a meeting where these groups come together to think strategically, learn from one another and – most importantly—make the deals that keep us moving forward.

GlobeSt.com: What has changed year-over-year with regard to e-commerce's impact on real estate?

Bisacquino: Two shifts are happening: Retailer strategies are increasingly focused on aligning inventory, facilities, technology, transportation, and delivery services. That means “getting local” with inventory in local storage facilities or delivery lockers for faster shipping response times and lower shipping costs.

Second, e-tailers are dipping their toes into the traditional brick-and-mortar locations as they experience the benefits of exposing their brands to a whole new range of customers. So “click” retailers are turning to “bricks” as a type of showroom concept, allowing customers to touch merchandise and complete easy exchanges or returns. We're seeing these as pop-ups or kiosks inside an existing stores from retailers like Athleta, Baublebar and Etsy.