Warehouse Industry Sees Increased Demand Amidst E-commerce Surge
The rapid growth of e-commerce, accelerated by the COVID-19 pandemic, is driving a significant increase in the demand for warehouse space globally. MasterCard data shows e-commerce spending grew by 93% year-on-year.
The exponential growth of e-commerce, significantly boosted by the COVID-19 pandemic, is creating a substantial demand for warehouse space worldwide. This shift is marked by an anticipated increase in companies transitioning from brick-and-mortar operations to online sales channels.
According to MasterCard, e-commerce spending saw a 93% year-on-year increase. E-commerce operations require approximately three times the logistics space of traditional retail stores, as 100% of inventory is housed in warehouses. Furthermore, online retailers often maintain broader product selections, thus increasing storage needs.
In response to rising demand, logistics providers like DB Schenker have introduced services that screen and assess available storage space. Previously dedicated areas are being repurposed as temporary storage solutions for companies facing urgent capacity shortages. This flexibility is crucial for sectors like healthcare and food, which are experiencing heightened demand.
Evidence of this trend is seen in the UK, where e-commerce sales reached £2.1 billion in May 2020, up from £1.3 billion in May 2019. The online share of total retail spending jumped to 33.4% in May 2020 from 19% in 2019, illustrating a significant consumer shift towards online purchases.