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Cyber Monday Sales Are Predicting Commercial Real Estate Trends

Written on Tuesday, 27 December 2016 5:12 am
Cyber Monday Sales Are Predicting Commercial Real Estate Trends 800 North Haven Ave., Suite 400, Ontario, California 91764




The results from Cyber Monday 2016 have been released and the figures are amazing. Cyber Monday broke all records known or online shopping. Sales exceeded $3.36 billion on this day alone. This was a 10.1 percent increase over the previous year, and higher than most analysts expected. Combined with the fact that Thanksgiving and Black Friday Internet sales jumped over 23 percent this year, the data shows that Internet sales are the way of the future.

Many retailers already know this and have been gearing up for the last few years for the increase in Internet sales. Internet giant Amazon has increased their commercial warehouse space and distribution centers by 30 percent in 2016 just in the United States. They are expanding rapidly throughout the country and the world. If you speak to an industrial broker in any major commercial area they will tell you that Amazon is impacting the commercial warehouse space industry.

A Glimpse At The Future

The Department of Commerce has released several reports since 2015 showing that the trend for online shopping is growing at a significant pace. Brick and mortar stores are struggling to keep people coming in because the convenience of the Internet is too enticing. Savvy retailers are latching on to this trend and quickly converting their sales structure to focus more on Internet sales and less on their stores.

In addition to this conversion to online selling, many major retailers have discovered that they can offer additional product lines by selling them online only. Product, especially larger sized items, can be easily stored in a distribution center until sold. This saves a considerable amount of money for the retailer who is used to making every inch count on a retail floor. Great pictures and product descriptions can increase their sales and profit margins because they no longer have to pay the price for retail square footage to display these items.

New venues are also being promoted by online retailers. Amazon and Wal-Mart are aggressively trying to make ordering groceries online a preferred shopping method. Wal-Mart has been offering large discounts for first-time users of this service to encourage ordering online and picking up at the store. Amazon has been test marketing an order online and delivery service for groceries in certain areas of the U.S. Both major retailers believe that by converting grocery purchases into online purchases could cause Internet shopping to double within just a few years.

Every industrial broker, especially those in areas where commercial warehouse properties are very predominant, should get prepared for this shift in retail sales. The commercial real estate market is going to change very quickly over the next few years and brokers must be prepared.




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