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Sunday 24.09.2017 | Name days: Agris, Agrita

Internet shopping is driving an astonishing building boom

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Author: REUTERS/SCANPIX

Online shopping might feel just a short step removed from a Star Trek replicator — click a button and the thing you want (eventually) appears. But this virtualization of consumer commerce is, of course, an illusion: Everything you might order takes up physical space somewhere in the world, and stores need to find somewhere to put that stuff until you click.

Retailers online and offline will need a combined 25 million square meters in additional space over the next five years to store and handle the stuff they sell, according to a report from real estate research firm Jones Lang LaSalle. That’s nearly 6,200 acres, or more than seven Central Parks. And that’s just in Europe, Wired wrote.

The demand for space is being driven by the demand for stuff. In the U.K., online shopping already accounts for 12 percent of all shopping, according to the report. (The rate in the U.S. is about half that.) Germany and France aren’t far behind, though the report predicts the greatest growth will occur in central, eastern and southern Europe, where e-commerce currently makes up a smaller chunk of the retail economy.

In practice, retailers will have to build the many different kinds of structures they’ll need to literally deliver the goods, whether to their own stores or to your door. In particular, the report sees a growing demand for “mega e-fulfilment centres” in the style of the million-square-foot warehouses that anchor Amazon’s operations.

To accommodate the rising push for same-day delivery, the report says some retailers will likely start building more smaller warehouses closer to cities and stock them with a more limited inventory of commonly ordered goods.

More e-commerce also means more shipping, which will require more places for parcel carriers to handle packages, from their own giant distribution centers to local depots for loading neighborhood delivery trucks.

Aside from the need for the e-commerce variation on traditional logistics facilities, the rise of so-called “omnichannel” retail — industry jargon for the blurring of offline and online shopping — will lead to the spread of a new kind of retail infrastructure. In Europe especially, “click and collect” has become a common way to fill online orders. Instead of having your order shipped to your home or office, you have the package sent somewhere else convenient for picking up. Often that place is a brick-and-mortar store — Walmart offers this in the U.S. with its delivery lockers—a cross between a P.O. box and an ATM typically housed in convenience stores, shopping malls and other easily accessible public places.

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