Skyscraper warehouses if online retail boom continues

These are predictions in the Colliers International European Retail and Logistics Insights report.

The firm says: "With spare space logistics space in European cities at all time low and growth in online shopping at an all time high, massive warehouse space has become a crucial part of supporting modern life."

The report says that multi-storey warehouses, deep-sea ports and fewer, bigger shops will make up the future of retail as millions more shoppers head online around the world.

Colliers also suggests drones may be grounded because of rising property costs and airspace regulations. The report has highlighted six key predictions for the years ahead.

High street face-lifts: While the very worst hit high streets will die off, many regional and sub-regional centres will be revamped with cafes and leisure outlets, parcel collection points and shared work-spaces filling vacant shops. High street across Europe weren’t hit as badly as those in Britain during the recession, largely because of Europe’s differing shopping habits and reduced oversupply of space. Just as major retailers are now content to be in just 50 locations rather than 200, new chains are filling vacant spots. They include brands like Doddle, where you can send and collect parcels and Byron, a posh burger chain promising to open 10 restaurants every year as it expands nationally.

Super-sized warehouses: Soaring land costs mean developers will find more floor space on a site by building upwards. Prime warehouse assets have enjoyed significant yield compression in recent years. Companies like Next, River Island and John Lewis already rent millions of square foot of storage space. Being able to store closer to people’s homes could streamline deliveries further and allow retailers to better use their supply chains and retail outlets as pick-up locations. In Japan, ProLogis Parc Narita III is a 661,000 sq ft (61,400-sq meters) giant industrial facility spread over seven floors. Europe could soon get its own skyscraper sheds.

Deep water ports: Container vessels hold more than 25 times as much cargo compared with 1970 and ports have had to evolve to make room. Global logistics and shipping industries have evolved to capture and facilitate growth in trade. This is why deep water ports are now a necessity. Their emergence across Europe has seen trade through the Mediterranean soar as new shipping routes have grown. The continent remains far more fragmented than Asia.

Digital urbanites unite and take over: Research shows that urban-based, digitally-literate consumers will dominate countries’ populations over the next two decades having a profound impact on how retail is shaped and delivered. While Europe itself will see comparatively modest growth, a surge across China and India will create huge opportunities for existing retailers who have the benefit of established infrastructure and brands which often attract emerging market consumers.

Drones could stay grounded: Despite the buzz around drone deliveries current airspace regulations could keep drones grounded. Instead, retailers could make better use of existing last mile delivery methods such as pedal bikes and Uber taxis. The practicality of flying DVD box sets to people in high rise buildings doesn’t stack up – unless office blocks place post collection shoots on their roofs. And then there’s the cost. While paid services like Amazon Prime offer free delivery, they often only do so on costlier products. Although time-conscious consumers want everything tomorrow, some may begin to wait a little longer for less urgent items if they realise just how much they can save. Plus, with increasing concern over the environment, bicycle couriers or electric cars could well become a totem for sustainably minded retailers.

Show rooming: “Show rooming” is jargon for when shoppers look but don’t buy, or snap a product up online instead. This has been one of the drivers or companies reducing retail space and shifting capacity to more cheaply priced warehouses, which can deliver straight to people’s homes. However, smarter retailers will use technology – such as augmented reality, 3D printing and biometrics – to turn more of a profit from the theatre of real world retail. Offering unique experiences, bespoke products and additional offers can help build balance sheets and brand value.