The Amazon Effect

It's easy to think Canadian retail is all doom and gloom (word that Sears Canada is on life support doesn't help), but new research shows a different story.

Avison Young CEO Mark Rose says we are seeing a shift, not a collapse; consumers are gravitating toward mobile purchasing and same-day or next-day delivery, causing a change in logistics, the supply chain, and distribution. (We're so close to never having to leave home. We may sell our door on eBay.) Real estate is shifting from retail to industrial. Snapped with Mark: AY’s Texas team at the HP Byron Nelson Championship in Dallas last week—Art Green, Greg Langston, and Rand Stephens.

AY's report covers industrial markets in 35 Canadian and US metropolitan regions. Of those, 26 saw vacancy rates tighten. Both build-to-suit and spec development is on the rise, compared with a year ago. And that isn’t truer than in Toronto, Canada’s largest and North America’s second-largest industrial market (856M SF). Toronto is the biggest development market in the nation, with 2M SF underway. Warehouses, distribution centres, and data centres are driving growth. Snapped is the Best Buy distribution centre in Brampton.

AY SVP Kevin Beaudry says we should postpone the funeral for bricks and mortar. Getting the goods “the last mile” to the customer and collecting return goods involves a lot of unpredictability (mostly in the form of dogs chasing the mailman). Bricks and mortar can be redefined into mini-fulfillment centres, able to support next-day shipping more cost effectively. "The retail supply chain will continue to see expansion by specialized 3PL firms and trend toward more but smaller-scale e-fulfillment and return facilities," he says. Kevin, second from left, is snapped at the SIOR awards.