Professional Retail Store Maintenance 2018 Trends Report - 23

FULFILLMENT CENTER FMS
MUST PROVIDE THE FOLLOWING
* A comfortable, safe work environment - in facilities that can
cover 1 million square feet.
* Floor space for more offices, cafeterias, lockers, meeting rooms,
break rooms and training.
* Parking and security for more personal vehicles.
* Easy access and egress for local delivery drivers who
use personal vehicles.
* Safe and efficient traffic flow for large trucks and often rail lines.

Based upon a study conducted by
PricewaterhouseCoopers (PwC) and
the International Warehouse Logistics
Association (IWLA), 97 new warehouse/
fulfillment centers, averaging 183,000
square feet each were added in 2015, up
from just 56 in 2014.
Fulfillment has seen the most growth
in revenue since 2013, followed by
packaging, sub-assembly and returns
processing/reverse logistics. Five-year
projections by IWLA and PwC show
an average 10 percent revenue growth
per year in the industry all driven by
e-commerce fulfillment.
Since 2015, Amazon has more than
doubled its number of fulfillment centers
to more than 80 employing more than
100,000. The latest opened in Thornton,
CO, encompassing 855,000 square feet
and employing more than 1,500. Robots
enable this center to process 50 percent
more packages than non-robotic centers.
The Commercial Real Estate
Development Association sees the
following trends developing:
* Industrial real estate is the new
retail - As all retailers streamline the
last-mile of delivery, they are looking for
fulfillment center locations closer to the
end consumer. Ultimately, retail stores
may also serve as fulfillment centers.
* Small warehouse design is being
influenced by larger facilities -
Smaller fulfillment centers now include
36-foot ceilings, 56-foot column
spacing and 70-foot speed bays.
* E-commerce companies adding
infill locations - E-commerce retailers
are moving into and refurbishing
functionally obsolete industrial buildings

to get closer to customers and avoid or
eliminate design and build times.
* Location is everything - Because
transportation, labor costs and
time-to-the-customer are critical, a
building in the wrong location, even
with lower rental rates, would be useless.
* Moving from "horse and buggy"
to "spaceship" era - Centers
are evolving at a rapid rate and
e-commerce companies want centers
that can accommodate autonomous
trucks, drone docks and microgrids that
enable warehouses to generate their
own power.
* Demand for refrigerated centers
is growing - Just-in-time grocery
delivery will ramp up, and demand for
fulfillment centers with refrigeration
capabilities will increase.
* Third-party logistics (3PL) industry
will grow exponentially - As more
retailers move into the online space,
the demand for 3PL services will
explode. To compete, retailers who do
not have established logistics programs
will have to pay someone to provide
the service.
* Designs are changing - The lastmile of delivery is crucial and close-in
centers will not be mere copies of
larger ones. They may be multi-story
inside urban centers, and designed for
massive throughput for small-vehicle
drive-through.
As rental rates and labor costs spike,
retailers are investing more in fulfillment
center technology to increase efficiency
and reduce or eliminate labor expenses.
Robotics and automation are the two
weapons retailers use to attack these costs.

In high-tech fulfillment centers, the
tedious work of stocking and "picking"
products from shelves is now done by
whirring robots that dart up and down
aisles selecting products with extreme
accuracy, while simultaneously tracking
inventory levels. Miles of conveyor belts
move products and boxes through the
warehouse until they are packed by
humans and loaded for shipments
by robots.
These tech changes impact building
design, size, location, traffic and product
flow, and facility maintenance. While
retail stores may only be open during
shopping hours, fulfillment centers
operate 24/7/365, with hundreds of
workers onsite.
While technology has replaced
many fulfillment jobs, these facilities
still employ thousands. The increase
in employees who work in fulfillment
centers presents additional challenges for
FMs.
As the number and size of fulfillment
centers increase, the need to manage
energy usage increases. This is being
driven by increased financial and
regulatory pressures. Just as cities and
states have passed regulations that force
retail stores to reduce energy usage, and
increase sustainability, the same entities
have and will enact regulations that
impact large distribution and fulfillment
centers.
Fulfillment centers will be the core
of future retail. As the industry evolves,
retail FMs will be called upon to manage
more of these centers and potentially
more in-depth maintenance on the hightech elements in the centers. l
www.prsm.com I 2018 TRENDS REPORT I 23


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Table of Contents for the Digital Edition of Professional Retail Store Maintenance 2018 Trends Report

What’s Driving Retail Trends – Retail Transitions From Ecommerce to Newcommerce
The Skills Gap Crisis
A New Era of Retail
Making the Mark
FM Tech Trends – Tapping Into Tomorrow Today
Direct to the Customer – Retailers Streamline Fulfillment
Contributors
Advertisers’ Index
Professional Retail Store Maintenance 2018 Trends Report - Intro
Professional Retail Store Maintenance 2018 Trends Report - cover1
Professional Retail Store Maintenance 2018 Trends Report - cover2
Professional Retail Store Maintenance 2018 Trends Report - 3
Professional Retail Store Maintenance 2018 Trends Report - 4
Professional Retail Store Maintenance 2018 Trends Report - 5
Professional Retail Store Maintenance 2018 Trends Report - 6
Professional Retail Store Maintenance 2018 Trends Report - What’s Driving Retail Trends – Retail Transitions From Ecommerce to Newcommerce
Professional Retail Store Maintenance 2018 Trends Report - The Skills Gap Crisis
Professional Retail Store Maintenance 2018 Trends Report - 9
Professional Retail Store Maintenance 2018 Trends Report - 10
Professional Retail Store Maintenance 2018 Trends Report - 11
Professional Retail Store Maintenance 2018 Trends Report - A New Era of Retail
Professional Retail Store Maintenance 2018 Trends Report - 13
Professional Retail Store Maintenance 2018 Trends Report - 14
Professional Retail Store Maintenance 2018 Trends Report - 15
Professional Retail Store Maintenance 2018 Trends Report - Making the Mark
Professional Retail Store Maintenance 2018 Trends Report - 17
Professional Retail Store Maintenance 2018 Trends Report - 18
Professional Retail Store Maintenance 2018 Trends Report - 19
Professional Retail Store Maintenance 2018 Trends Report - FM Tech Trends – Tapping Into Tomorrow Today
Professional Retail Store Maintenance 2018 Trends Report - 21
Professional Retail Store Maintenance 2018 Trends Report - Direct to the Customer – Retailers Streamline Fulfillment
Professional Retail Store Maintenance 2018 Trends Report - 23
Professional Retail Store Maintenance 2018 Trends Report - 24
Professional Retail Store Maintenance 2018 Trends Report - Contributors
Professional Retail Store Maintenance 2018 Trends Report - Advertisers’ Index
Professional Retail Store Maintenance 2018 Trends Report - cover3
Professional Retail Store Maintenance 2018 Trends Report - cover4
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