Myer 'fulfilment' hubs serve online shoppers
Department store giant Myer is to grow its online capabilities with the opening of its own distribution centre, in a trend that is set to gain traction in the retail sector.
Known as "fulfilment" centres, the warehouses are dedicated to the retailer to store and distribute goods bought and returned through the online business.
As online retail grows at a rapid pace, the drive to deliver orders to customers quicker will become a competitive advantage.
The move by the retailers to lease a warehouse directly will also intensify the competition in the industrial market, where a number of businesses and cargo firms are looking for property.
Although food retailers Woolworths, Coles, IGA/Metcash - among others - have had distribution centres for years, the trend has not been as prevalent in the apparel and dry goods sectors.
Myer opened its centre at Maidstone, Victoria, in August. It is managed by Cargo Services and is stocked with 15,000 Myer items frequently ordered online.
Myer's chief executive, Bernie Brookes, said the progressive opening of the online fulfilment warehouse would provide logistics support for its online store.
"Our online fulfilment distribution centre, which has been built to distribute our 15,000 best-selling online items, opened in October, significantly transforming our online fulfilment capability. It will underpin the online store's ability to meet projected volumes during the upcoming peak trading period," Mr Brookes said.
Myer general manager online, Richard Harrison, said the deal would support Myer's existing store fulfilment model and ensure Myer was well placed to provide improved online customer service moving into the Christmas period.
Michael Fenton, the head of industrial, Jones Lang LaSalle Australia, said the growth in online retailing and the need to get products to customers swiftly and efficiently, would encourage some retailers to set up networks of local depots.
Mr Fenton said with the strong take-up of e-commerce, "specialised" or "purpose-built" real estate would become more common. "We'll start to see an emergence of multiple logistics hubs closer to major population clusters, to meet delivery time expectations and changing consumer demand," he said.